Loanpad P2P - Reviews, experiences, info or updates, post them here. I'm having a dabble.

where_are_we

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

Sea_Shell

where_are_we said:

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

My initial question was around avoiding the need to potentially have to send them proof of the rest of my investment portfolio.

Also, as a couple we treat our investments as one pot, regardless of whose name they're held in, so there is a chance I may slightly exceed my individual 10%, if we decided to invest, say, a decent PB win.

Money we wouldn't otherwise have had IYSWIM.

masonic

Sea_Shell said:

where_are_we said:

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

My initial question was around avoiding the need to potentially have to send them proof of the rest of my investment portfolio.

Also, as a couple we treat our investments as one pot, regardless of whose name they're held in, so there is a chance I may slightly exceed my individual 10%, if we decided to invest, say, a decent PB win.

Money I wouldn't otherwise have had IYSWIM.

You won't have to prove it, that's what the "Self Certified" part means. Nor will you need to prove you are complying with the Restricted investor declaration. This is part box ticking exercise and part apportioning of blame, should you be minded to raise a complaint related to the consequences of your investment decisions at any stage. It will be entirely your fault if you don't comply with the declaration, or make a false declaration, or try to claim you didn't understand what you were doing. This is how the FCA attempts to regulate financial services, between long spells asleep at the wheel.

Sea_Shell

masonic said:

Sea_Shell said:

where_are_we said:

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

My initial question was around avoiding the need to potentially have to send them proof of the rest of my investment portfolio.

Also, as a couple we treat our investments as one pot, regardless of whose name they're held in, so there is a chance I may slightly exceed my individual 10%, if we decided to invest, say, a decent PB win.

Money I wouldn't otherwise have had IYSWIM.

You won't have to prove it, that's what the "Self Certified" part means. Nor will you need to prove you are complying with the Restricted investor declaration. This is part box ticking exercise and part apportioning of blame, should you be minded to raise a complaint related to the consequences of your investment decisions at any stage. It will be entirely your fault if you don't comply with the declaration, or make a false declaration, or try to claim you didn't understand what you were doing. This is how the FCA attempts to regulate financial services, between long spells asleep at the wheel.

So what do they mean by...

"As a result, as time progresses, we may require evidence that your investment in Loanpad only constitutes less than 10% of your investable assets."

???

Aceace

Sea_Shell said:

where_are_we said:

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

My initial question was around avoiding the need to potentially have to send them proof of the rest of my investment portfolio.

Also, as a couple we treat our investments as one pot, regardless of whose name they're held in, so there is a chance I may slightly exceed my individual 10%, if we decided to invest, say, a decent PB win.

Money we wouldn't otherwise have had IYSWIM.

I'm aware of many people who have declared themselves "Restricted" across a large number of platforms. None of them has ever been asked for proof.

I would imagine that the only time you would ever be asked is if you tried to claim compensation from the FCA because you thought they were at fault for not adequately regulating a platform that you lost money on. The FCA are aware of their many failures to adequately regulate the scam platforms that have failed and are under considerable pressure to compensate. IMO, they are just trying to put an extra barrier to any potential future compensation claims.

That's not to say that there aren't risks to one's capital when in investing with Loanpad, there are. Just as there are in all investments. E.g. if property prices fell by more than 50% within 18 months, you would likely lose some capital. Platform or lending partner failure are also risks. Personally, I feel that those risks are sufficiently unlikely that I'm happy go invest. I've already received a 14.3% return on investment with them which gives me a further cushion.

Is not really that I think the 10% max for unsophisticated investors is a bad idea, it's that it's so out of whack with not having similar criteria for other "investment" types. And the definition of sophisticated is clearly ludicrous. 

masonic

Sea_Shell said:

masonic said:

Sea_Shell said:

where_are_we said:

I, too, received the Loanpad email giving me the option of changing from "Restricted" to "Self Certificated Sophisticated". I have decided to remain "Restricted" even though I have had more than one P2P investment (all IFISA`s) benefiting from an introductory bonus eg Ratesetter. I am a "Hands off" investor with nowhere near 10% of investable assets, and would not consider myself to be sophisticated even though I do not qualify for their definition of "Restricted" because I have had more than one P2P.

My initial question was around avoiding the need to potentially have to send them proof of the rest of my investment portfolio.

Also, as a couple we treat our investments as one pot, regardless of whose name they're held in, so there is a chance I may slightly exceed my individual 10%, if we decided to invest, say, a decent PB win.

Money I wouldn't otherwise have had IYSWIM.

You won't have to prove it, that's what the "Self Certified" part means. Nor will you need to prove you are complying with the Restricted investor declaration. This is part box ticking exercise and part apportioning of blame, should you be minded to raise a complaint related to the consequences of your investment decisions at any stage. It will be entirely your fault if you don't comply with the declaration, or make a false declaration, or try to claim you didn't understand what you were doing. This is how the FCA attempts to regulate financial services, between long spells asleep at the wheel.

So what do they mean by...

"As a result, as time progresses, we may require evidence that your investment in Loanpad only constitutes less than 10% of your investable assets."

???

That's a new one on me. Done these declarations on many platforms in the past and there is nothing in the regulations that either require or permit the firm to demand evidence of other investments. You can look up the regulations at https://www.handbook.fca.org.uk/handbook/COBS/4/7.html

COBS 4.7.7 covers P2P agreements and 4.7.10 specifically the Restricted investor statement.

I would suggest they are either covering themselves for a scenario in which the FCA changes the rules (frankly it would not be workable for them to do so), or they are trying to push investors out of Restricted status for some other purpose. It would be ridiculous for any firm selling investments to think that they could make it a condition of business for customers to fully disclose their assets prior to making an investment with them.

Sea_Shell

Thanks @masonic and @Aceace

I'll leave it as "restricted" for now.     However, interesting that their definition states...

Restricted Investor statement

I make this statement so that I can receive promotional communications relating to P2P agreements or P2P portfolios as a restricted investor. I declare that I qualify as a restricted investor because:

1. In the twelve months preceding the date below, I have not invested more than 10% of my net assets in P2P agreements or P2P portfolios; and
2. I undertake that in the twelve months following the date below, I will not invest more than 10% of my net assets in P2P agreements or P2P portfolios.

Two things stand out to me, which I've bolded.   Firstly, it seems to be about "marketing" so could they push their (others'*) product(s) more onto a "sophisticated" investor?    Secondly, the bits about 12 months.   This reads to me that my investments can be 10% of my net assets in any 12 month period.    So, I could invest 100% over 10 years!!!    Have I read this right?



* Seems to be born out by the statement for "sophisticated" being...

Self-Certified Sophisticated Investor statement

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of P2P agreements or P2P portfolios. I understand that this means:

1. I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in P2P agreements or P2P portfolios;
2. The investments to which the promotions will relate may expose me to a significant risk of losing all of the property invested.

So that cements my reasons NOT to change.    I don't want to be marketed to for riskier products!!!

Aceace

Sea_Shell said:

Thanks @masonic and @Aceace

I'll leave it as "restricted" for now.     However, interesting that their definition states...

Restricted Investor statement

I make this statement so that I can receive promotional communications relating to P2P agreements or P2P portfolios as a restricted investor. I declare that I qualify as a restricted investor because:

1. In the twelve months preceding the date below, I have not invested more than 10% of my net assets in P2P agreements or P2P portfolios; and
2. I undertake that in the twelve months following the date below, I will not invest more than 10% of my net assets in P2P agreements or P2P portfolios.

Two things stand out to me, which I've bolded.   Firstly, it seems to be about "marketing" so could they push their (others'*) product(s) more onto a "sophisticated" investor?    Secondly, the bits about 12 months.   This reads to me that my investments can be 10% of my net assets in any 12 month period.    So, I could invest 100% over 10 years!!!    Have I read this right?



* Seems to be born out by the statement for "sophisticated" being...

Self-Certified Sophisticated Investor statement

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of P2P agreements or P2P portfolios. I understand that this means:

1. I can receive promotional communications made by a person who is authorised by the Financial Conduct Authority which relate to investment activity in P2P agreements or P2P portfolios;
2. The investments to which the promotions will relate may expose me to a significant risk of losing all of the property invested.

So that cements my reasons NOT to change.    I don't want to be marketed to for riskier products!!!

Yes, I think you are spot on again.

I doubt that the 10% per year is what they intended, but it's difficult to argue that that is exactly what it says. 

Aceace

It looks like the only Loanpad loan that was drawing on the ICF has now been repaid. 

Malthusian

Aceace said:

The Sophisticated Investor criteria aren't there to protect investors, they're an attempt to cover the FCA's ar*e if things go wrong due to their poor attempts at regulation. It's best to only invest based on your own DD on the loans and the platforms, with emphasis on the platforms.

Not a single Loanpad investor has hired their own firm of corporate finance professionals at their own expense to verify Loanpad's various claims about the security of their loans. If I am wrong, name them, but the cost would eliminate the 4%pa returns on offer. By "due diligence" we are talking about the pseudo-diligence of reading Loanpad's website.

The purpose of the sophisticated investor criteria is to severely limit the section of society to which you are allowed to advertise high-risk loans to a single micro-cap company. Unfortunately, the "restricted investor" loophole fatally undermines it as discussed above. Anyone can be a restricted investor and because anyone can be a restricted investor anyone can immediately become a sophisticated investor (COBS 4.12.8 criterion b).

The "restricted investor" loophole exists because the P2P lobby said "hang on, these rules mean we won't be able to advertise to punters" and instead of having the balls to say "no duh Sherlock, that's the point" the FCA folded. It has never been able to properly regulate P2P because it can't treat it as what it is (high risk individual loans) without admitting what a half-buttocked job it has done since the sector took off in the late 2000s.

The FCA are effectively saying that is OK to put your life savings in tesla shares, or risk it all on black at the casino, but it's too risky to put 11% in Loanpad.

The FCA has produced numerous breast-beating reports and statements about how bad it is that amateur investors can put all their life savings in Tesla if they choose, especially over the last few years thanks to lockdown and the rise of the likes of eToro. But there is nothing they can really do about it.

The difference in this context between Tesla shares and loans to Loanpad is that Tesla doesn't directly encourage retail investors to buy their shares via twee affiliate marketing, faux-cashback offers (paying investors with their own money), ads on the Underground and whatever else Loanpad uses to advertise. If someone puts all their money into Tesla it is entirely of their own impulse.

Casinos are regulated by the Gambling Commission and not the FCA's problem. For all the faults of the Gambling Commission and the ASA, any casino that advertised roulette as low risk would be swiftly slapped down.