Funding circle-do you use it?

TheTracker

Archi_Bald wrote: »

Thanks for that link. I shall refrain from putting any money into Mr. Lewis' company then.

You wouldn't be. FCA Client Money Rules mean that your money must be kept separate from Mr Lewis' company money.

Also, the FCA authorises members for the FSCS and so far it hasn't allowed P2P bodies. Though it is true P2P bodies have lobbied that they do not wish to be authorised members.

BTW as far as I understand it the FSCS covers P2P investors as long as the money is cash and held in a bank that is covered by the FSCS.
http://www.fscs.org.uk/news/2012/august/fscs-and-peer-to-peer-lending-sites/

Nevertheless, I think it a storm in teacup / red herring. Any P2P body with FSCS protection would turn into a body with challenger bank like returns. It is possible in future we may have P2P bodies that do and do not have such protection and it will be up to the consumer if they want to lend with or without the protection. But my opinion is that any body between two peers that needs to perform such mitigating actions to meet regulations to be an FSCS authorised body is largely indistinguishable from a bank and is not any more "P2P", that is avoiding middle men, any more than a bank would be.

The way out of this is exactly at Mr Lewis lobbies - the FSCS to move away from "one size fits all" protection. It's started to do this with temporary high balances. It could do this further with some common regulation across P2P provision funds, allowing P2P members to opt in or out. In the meantime P2P companies build provision funds that are well communicated and understood by punters and the FSCS loses connection with the end customer.

Disclosure: I didn't read the linked article as Citiwire refuses to show content to those with ad blockers, and I refuse to remove the adblocker from such sites.

Archi_Bald

TheTracker wrote: »

You wouldn't be. FCA Client Money Rules mean that your money must be kept separate from Mr Lewis' company money.

I don't care. Anyone who says my savings shouldn't be safe won't get any money from me. Same applies to their associates.

Rollinghome

TheTracker wrote: »

In the meantime P2P companies build provision funds that are well communicated and understood by punters and the FSCS loses connection with the end customer.

The P2P companies certainly communicate/publicise provision funds if they have them but it's somewhat less certain that they are fully understood.

From reading posts to the P2P forums it's clear that many investors are reasonably savvy but surprising how many others don't fully understand the terms they agree to. For example, that they could be locked into loans for far longer that originally agreed without any negotiation on the ongoing rate and that exiting a contract early could be far more costly than they are led to believe.

It also surprises that so many are willing to lend at less than they could get from far safer interest-paying current accounts. While much is made of cutting out the middleman, there is of course still a middleman of sorts but with the main difference being that if it all goes pear-shaped then your claim isn't again them but against the often unknown party your money was lent to.

Slightly concerning too that many appear to accept the puff that P2P lending is in some way on higher moral ground than conventional savings when it's unlikely that former investment bankers such as Mr Lewis, the private equity groups behind him, et al, are driven by any altruism.

agent69

Rollinghome wrote: »

For example, that they could be locked into loans for far longer that originally agreed without any negotiation on the ongoing rate and that exiting a contract early could be far more costly than they are led to believe.

Ah yes, our good friends at RS. Short term borrowing to fund long term lending. Lend in the one month market and get your cash back after 5 years (in exceptional circumstances).

It's all in the small(ish) print, but who has time to read that.

agent69

Futuristic wrote: »

Use to have a few k in it, surprisingly had some luck and a few loans repaid early with full interest and others sold for profit. I pretty much pulled all my p2p lending and put the funds into a S&S ISA now.

Oh - that could have been bad timing

agent69

Sam_J12 wrote: »

You should probably add an option "What is Funding Circle?". That is what I would vote for.

You're better off not knowing

Dan83

I've not got a funding circle account but, I do have £3000 invested in wellasly & co.

pip895

I'm interested in your survey but I share others concerns that the results will not really answer your question. I am pretty cautious about it but that won't come out from my answer to your survey.
Funding circle is my first foray into P2P - my thinking is that I'm not sure about the long term safety and if we head toward recession there could be big issues. Then there are the unknown unknowns which are always present with a new investment vehicle like this - I think only funding circle (of the big players) is giving sufficient returns to compensate for these risks - no way I would want to take a risk like this for only a percent or two more than I can get at the bank.

bigadaj

pip895 wrote: »

I'm interested in your survey but I share others concerns that the results will not really answer your question. I am pretty cautious about it but that won't come out from my answer to your survey.
Funding circle is my first foray into P2P - my thinking is that I'm not sure about the long term safety and if we head toward recession there could be big issues. Then there are the unknown unknowns which are always present with a new investment vehicle like this - I think only funding circle (of the big players) is giving sufficient returns to compensate for these risks - no way I would want to take a risk like this for only a percent or two more than I can get at the bank.

I'm not a fan, returns aren't great compared to other sites, I believe they have reasonable default rates but don't invest with them so have little detailed knowledge.

Have you been on the p2p independent forum, that should be your first move.

Eco_Miser

Prior to today, the last post was on 31 December 2015. The survey is well out of date.