P2P - Wellesley & Co

rebecca1

I have 40k to invest, used up all my ISA/NISA allowance and I was considering the P2P market..
As there is no FSCS protection with P2P lending, I was trying to choose wisely to minimise my risk...

These people lend the money against property which they say can be sold and your money clawed back if someone defaults on their loan. They have been operational since November 2013 - and have not had any defaults (early days I know) - anyone had any dealings? Or good advice about P2P ?


Thanks
Rebecca

Your_Hero

There is so much hype around P2P, and I believe putting a little bit of money there for a small flutter might be worthwhile but nothing serious.

With £40,000 you are probably better off with the traditional investments. You say you've used up your NISA allowances, why don't you consider investing it in your pension or standalone OEICS/UTs and then shelter them next year within your NISA?

This of course depends on what you intend to you with your money, and the risk you're prepared to accept but I presume you are happy with some risk and tying it up for a while since you are looking into P2P.

jimjames

A company operating for less than 12 months sounds like a huge risk to me.

How do you know they haven't taken more money than the value of the properties so even if they did have to sell you wouldn't get the money back? Or how do you know the properties even exist?

If you're prepared to take those kinds of risks why wouldn't you use shares or funds which are regulated - or have you already got other investments and want to gamble this money?

rebecca1

JimJames -


I have got other investments not shares or funds though as they make me quite nervous! My highest paid investment is 3% ISA but I wanted to see if I could get a higher rate of interest without too much risk - maybe that is not possible!


Rebecca

jimjames

It sounds like you don't have any investments at all then? All in cash accounts?

If that really is the case and you think you are too nervous for shares/funds then in my view this kind of scheme is more risky than a balanced fund and has no FSCS protection unlike a fund.

Your_Hero

rebecca1 wrote: »

JimJames -

I have got other investments not shares or funds though as they make me quite nervous! My highest paid investment is 3% ISA but I wanted to see if I could get a higher rate of interest without too much risk - maybe that is not possible!
Rebecca

That's a very odd situation. You are nervous about shares and funds but you are quiet happy to loan your money to individuals who may never repay you, and you have no protection if it all goes wrong. Interesting.


I suggest that the reason you are nervous about shares and funds is because it's on the media all the time when things go down. P2P is a new concept and it hasn't caught on yet when people lose thousands of pounds, eventually you will come to realise that it is risky and probably make you more nervous.

mikb

And now, maybe you'd like to hear from some people that are already dealing with Wellesley ...

http://p2pindependentforum.com/board/60/wellesley

If you are looking at P2P, in general, there's lots of other helpful posts there too for just about all the others.

agent69

If you are looking for details of whats available then check out the independent P2P forum.

If you are looking for lower risk you can get 6.2% for a 5 year loan at Ratesetter (with a provision fund), If you want a higher rate you have to take a higher risk.

Don't forget that tax comes off before losses, so that high default rates can wipe out earnings for a high rate tax payer.

jamesd

Wellesley looks to have one of the better models for P2P but with £40,000 you should really be diversifying across four P2P firms.

However, given your lack of experience with other investments I suggest that you dedicate at least £10,000 to more traditional fund investing so that you can gain experience with how that goes, including seeing both the ups and downs.

At the moment I'm concerned that you are seriously harming your long term financial future by avoiding the investments that are the core part of doing well.

agent69

http://www.thisismoney.co.uk/money/saving/article-2688695/Ratesetter-lend-save-provider-WORLD-risk-rated-they.html

jamesd

The fundamental premise of that story is wrong. The FE risk score is not a true risk score. It's just a measure of how much the value varies up and down over time. That's not where the risk of P2P lending lies. It's in defaults and a range of possible failures to comply with the law or other problems at the P2P firm. All P2P vendors could expect a 1 score on volatility measures.