London Capital and Finance

PropertyPlayer wrote: »

It was good to see daniel80 chose the high-interest account max-ing 2 x HtB ISA - a(nother) success for this forum! Unfortunately I am not eligible for one, but have begun funding them for my children. I simply highlighted that this option could give a much higher return on the amount funded compared to the bond mentioned, whose minimum investment figure is close to a HtB ISA over 2 years.

You'd mentioned that putting 1000 starting amount and 200pm for 2 years would give ~7500 which is about 15% return. But clearly as the money is not going all in at the start, but is instead only being dripped in and most of it isn't deployed for the full two years, the return is much better than a 15% AER - it's more like 25% annualised on what's actually been invested.

Or perhaps you were ignoring the time value of not needing all the money up front and being able to do something else with it while drip feeding the ISA, and were just considering the 5800 being committed into the ISA on day one and received back after two years at 7500. That would be a compound rate of 13.7% annually.

So, it wasn't entirely obvious whether you were trying to overplay or underplay the potential returns from an HTB ISA vs the alternatives, especially when you then went on to say that the other people's comments lacked accuracy before giving your thoughts which also needed correction/clarification by others.

As you might imagine, a public forum like this often has people with no prior posting history jumping into threads on unregulated investment to say it looks attractive and that they are considering it and that they do not have any connection with the provider - honest guv - but the scathing criticism of them is unwarranted.

So, forgive us for being on our guard when someone is warned off an unsuitable investment product and some random newbie joins the thread to say 'hey don't criticise that, for all these reasons, I'm considering it'. We have heard it a million times before.

Giving you the benefit of the doubt - yes it makes sense for people disappointed with 'dismal returns on traditional savings products' to look for alternatives. Some of those alternatives require thinking outside the box (e.g. high interest current accounts) or qualification criteria (cash ISAs with government bonuses) but usually 'alternatives to traditional savings accounts' would imply some other product where your money is protected and you get an interest rate. Rather than something with a temptingly higher return offering 100% loss of capital potential.

Investments of all sorts can of course be alternatives to 'dismal returns on savings' if the money is not needed for a while and risk of loss can be mitigated by having your money suitably diversified. Most wouldn't see the prospective returns from one unregulated bond investment as being close to comparable on a risk/return basis to the return on best current/savings accounts in the market. Clearly more risk, more reward, but the difference with putting the minimum in this and using asset-backed p2p lending is that with asset-backed p2p it is much easier to spread your £x over multiple distinct opportunities rather than just letting these guys deploy your funds in whatever they like and hope they can afford to pay you out.

Obviously spreading the risk over more opportunities across a couple of p2p platforms is more effort, but I don't buy the idea that the return here is 'on a par with p2p with much less effort' because it is perhaps not really on a par if you have the concentration risk of it all being in one product from one unregulated provider. And with the major p2p sites there is plenty of discussion on independent consumer forums where people sit around all day discussing the merits of providers and offerings, while there are no forums set up to discuss LC&F.

So, I don't think you'll get specific unbiased feedback on LC&F here because they are just one provider's investment offering in a sea of tens of thousands and people here aren't really using them ; the threads like these which spring up from time to time are generally more concerned with helping naive savers avoid losing their money so are necessarily quite negative. There are loads and loads of threads where people put serious money into unregulated investments which promised better rates than the competition and turned out to be unwise - see for example 'los pandos vineyard' further down the front page.