Assetz Capital

hungryhorse2

Has anyone had problems investing with Assetz Capital?  My wife has invested with them since 2017 because their interest rate is around 4% which is higher than high street banks and online savings companies.  She is considering putting more money into this particular investment and, before she does, we would like to know if there are any known drawbacks to investing with this Peer to Peer lending Company
Thank you

Thrugelmir

P2P is not comparable to ordinary savings accounts. The higher rate of interest on offer reflects the risk premium. As the capital lent is potentially at risk. 

moneysavinghero

Best paying standard savings account pays about 1%. So to get 4% returns you are taking on risk. Your money is not protected in Assetz Capital - potentially you could lose it all. Many peer-to-peer companies have gone bust already. Don't have any experience of AC myself so can't say how trusted they are.

You could try this forum to get a bit more knowledge about them from actual investors:
https://p2pindependentforum.com/board/28/assetz-capital

dunstonh

  She is considering putting more money into this particular investment and, before she does, we would like to know if there are any known drawbacks to investing with this Peer to Peer lending Company

You are comparing a risk free (in terms of investment risk) cash savings product with a 100% capital at risk niche investment option.

Albermarle

My wife has invested with them since 2017 because their interest rate is around 4% 

Since Covid struck , until quite recently , she would have been unable to withdraw money from the account ( if she had tried) as the accounts were frozen . So you can see this is not like a normal savings account.

Better news is that Assetz seems to have largely weathered the storm that put some other P2P companies under, and there can be an argument for putting more money with them due to the returns .

However you and your wife should be aware that there are some risks involved, and  investing in this type of company should only be a small part of your overall financial assets.

Ash_Pole

I've been in p2p since 2013 with mixed results. Some platforms have done well but too many others have gone bust. Assetz  has been one of the better ones and I've gradually wound it down over the last 18 months and got out with a reasonable return. 

p2p though does involve a lot of risk. In my opinion if you are investing into the sector spread your money across multiple platforms, hope to make a positive return but be prepared to lose money.

Aceace

As others have said, the main "drawback" with P2P platforms compared to savings accounts is that you are investing rather than saving, so your capital is at risk. Hopefully you were already aware of the distinction. The Assetz Capital Access Accounts (which I assume you have been using from your quoted 4% returns) are very much at the lower end of the P2P risk spectrum. Having earned about 3% above high rate savings accounts for 4 years, you will already be 12% plus compounding ahead, so you could afford to lose small amounts of capital now and still come out ahead.

There are 2 main risks with P2P; loan risk, and platform risk. With AC the loan risk is diversified over hundreds of loans, and is further backed up by provision funds (one per Access Account type), which gives considerable protection. Though it should be said that the provision funds have become somewhat depleted during Covid. AC are due to start adding new retail loans to the loan pools from next week, so hopefully they will be able to rebuild the provision funds. As for the platform risk, AC are one of the biggest, oldest, and fairly well respected platforms. IMO they did make some mistakes during Covid, and withdrawals were virtually stopped for the best part of a year, but they seem to be back on track again now. The only way that anyone has lost cash through their Access Accounts (so far) is if they offered a discount to access their cash during the covid lock-in period, and even then the maximum discounts were only a little over 10%, and most were far lower than that, so most will have been clawbacks of earned interest rather than capital losses. No-one who waited out the lock-in period lost any capital or interest in these accounts, though there was a very small platform charge introduced to keep the lights on during Covid. 

I like to diversify my P2P investments over multiple platforms to reduce the impact of any single platform failure. If you wanted to do this then I would suggest that Loanpad would be worth a look as something similar to AC's Access Accounts. The rates are similar and the loans are safer as they have a lower average LTV than AC. They don't have a capital provision fund, but they do have one to cover interest payments. Unlike AC, they didn't miss a beat during Covid. All withdrawal requests were honoured exactly on time, and they haven't been close to losing capital or interest on any loans so far. It's also a fire and forget type platform like the AC Access Accounts. 

With all P2P your capital is at risk and even if you don't lose capital the access terms aren't guaranteed. You are paid to take on these risks. The tricky bit is working out whether you're paid enough. I invest in both equity and the platform offerings of the above platforms, so no prizes for guessing my opinion.