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  • FIRST POST
    • daniel80
    • By daniel80 22nd Oct 15, 6:31 PM
    • 230Posts
    • 48Thanks
    daniel80
    London Capital and Finance
    • #1
    • 22nd Oct 15, 6:31 PM
    London Capital and Finance 22nd Oct 15 at 6:31 PM
    Anyone had any dealing with this company. My son has 25k to invest for only 2 years as it will be a house deposit. Iv`e told him to stay away from the stock market as 2 years is not long enough. As he is not overly keen with saving accounts cash isa`s etc due to low interest rates I said what about premium bonds a gamble on winning but stake is safe only loss would be inflation. When I googled investment ideas a link came up who were called specialist investment ideas with free advice. I put in my details..I received a call about half an hour later the guy recommended the above company which was based in Mayfair. he sounded very posh. He said London Capital and Finance were offering bonds paying 8% the money being lent to various companies to a maximum of 60% of their assist. He seems more of a salesman than an advisor and wants to phone back Monday. Brochure looks ok online but something does not seem right. Anyone dealt with these.

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    Last edited by Former MSE Andrea; 01-09-2016 at 2:14 PM.
Page 1
    • AlanP
    • By AlanP 22nd Oct 15, 6:39 PM
    • 1,557 Posts
    • 1,214 Thanks
    AlanP
    • #2
    • 22nd Oct 15, 6:39 PM
    • #2
    • 22nd Oct 15, 6:39 PM
    No and nothing that I have read in your post would tempt me to deal with them.

    Have you checked to see whether they are FSCS regulated?


    As for you son's £25k for 2 years has he / you looked at interest paying current accounts? Should be able to get 3.5 - 5% on that amount.

    JohnRo posted this link in a smiliar thread which will start you looking down that road http://www.bankaccountsavings.co.uk/
    Last edited by AlanP; 22-10-2015 at 6:42 PM.
    • george4064
    • By george4064 22nd Oct 15, 6:41 PM
    • 1,111 Posts
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    george4064
    • #3
    • 22nd Oct 15, 6:41 PM
    • #3
    • 22nd Oct 15, 6:41 PM
    Sounds dodgy to me.

    If your son needs the money for a house deposit in 2 years he should NOT invest the money. When investing you should take a long term view, at least 5 years but usually at least 10 years.

    For two years I would recommend keeping the money as cash in things such as; high interest accounts/savings accounts/NS&I savings etc.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
    Save £12k in 2018 - #004 £5,529/£12,000 (46%)
    • daniel80
    • By daniel80 22nd Oct 15, 6:53 PM
    • 230 Posts
    • 48 Thanks
    daniel80
    • #4
    • 22nd Oct 15, 6:53 PM
    • #4
    • 22nd Oct 15, 6:53 PM
    I had checked and they are not FSCS regulated?
    • george4064
    • By george4064 22nd Oct 15, 6:55 PM
    • 1,111 Posts
    • 1,129 Thanks
    george4064
    • #5
    • 22nd Oct 15, 6:55 PM
    • #5
    • 22nd Oct 15, 6:55 PM
    I had checked and they are not FSCS regulated?
    Originally posted by daniel80
    I got this from their website disclaimer, says it all really:

    The information on this site is for information purposes only and has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. London Capital and Finance offer Loan Notes for SME Lending, with fixed interest rates and asset backed for security. London Capital and Finance Limited does not offer financial advice, please contact an Independent Financial Advisor to discuss your requirements and ensure that this bond opportunity is suitable for your needs.

    From their FAQs page:

    Am I covered under the financial service compensation scheme?
    No, this product is an unregulated investment and is not covered under the FSCS, we suggest you always seek independent advice from a regulated adviser before investing.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
    Save £12k in 2018 - #004 £5,529/£12,000 (46%)
    • themanfromamarillo
    • By themanfromamarillo 24th Oct 15, 2:23 AM
    • 111 Posts
    • 49 Thanks
    themanfromamarillo
    • #6
    • 24th Oct 15, 2:23 AM
    • #6
    • 24th Oct 15, 2:23 AM
    In addition to the current account savings mentioned by a few people there will soon be the help to buy ISA. These will like pay ok interest rates and will be topped up with a 25% bonus for the purchase of a eligible house (<250k in most places or <400k in London, person can't have owned a house before).
    • kangoora
    • By kangoora 24th Oct 15, 10:58 PM
    • 664 Posts
    • 510 Thanks
    kangoora
    • #7
    • 24th Oct 15, 10:58 PM
    • #7
    • 24th Oct 15, 10:58 PM
    I got this from their website disclaimer, says it all really:

    The information on this site is for information purposes only and has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. London Capital and Finance offer Loan Notes for SME Lending, with fixed interest rates and asset backed for security. London Capital and Finance Limited does not offer financial advice, please contact an Independent Financial Advisor to discuss your requirements and ensure that this bond opportunity is suitable for your needs.

    From their FAQs page:

    Am I covered under the financial service compensation scheme?
    No, this product is an unregulated investment and is not covered under the FSCS, we suggest you always seek independent advice from a regulated adviser before investing.
    Originally posted by george4064
    Personally I would re-arrange these words 'Bargepole with touch don't a'
    • daniel80
    • By daniel80 27th Oct 15, 5:55 PM
    • 230 Posts
    • 48 Thanks
    daniel80
    • #8
    • 27th Oct 15, 5:55 PM
    • #8
    • 27th Oct 15, 5:55 PM
    Decided to go with the help to but isa. Seems the best and safest by far.
    • colsten
    • By colsten 27th Oct 15, 6:27 PM
    • 9,950 Posts
    • 9,024 Thanks
    colsten
    • #9
    • 27th Oct 15, 6:27 PM
    • #9
    • 27th Oct 15, 6:27 PM
    Decided to go with the help to but isa. Seems the best and safest by far.
    Originally posted by daniel80
    You cannot put £25K into the HTB ISA. The max you can put it, once it becomes available, will be £1,000 + £200 as an opening deposit, and then £200 a month thereafter. It will still be worth doing once it's available, but obviously it only takes a fraction of the £25K your son has.

    Interest paying current accounts, as well as high interest Regular Savings accounts are the way to go for most of the money.
    • daniel80
    • By daniel80 27th Oct 15, 9:46 PM
    • 230 Posts
    • 48 Thanks
    daniel80
    Yes I know that colsten but he and his partner will both do it for 2 years. He wants to set up a standing order for both of them.
    • colsten
    • By colsten 27th Oct 15, 9:59 PM
    • 9,950 Posts
    • 9,024 Thanks
    colsten
    One person can put £6,800 into an HTB ISA over 2 years.

    Two people can put £13,600 into an HTB ISA over 2 years.

    A far cry from the £25,000 you said your son wants to invest now. And where's the money whilst a part of it waits to be drip-fed into the HTB ISAs?
    • daniel80
    • By daniel80 28th Oct 15, 3:10 PM
    • 230 Posts
    • 48 Thanks
    daniel80
    But as I explained to him it is 100% safe, he should not be gambling with money needed for a deposit. 25K in highest paying interest account he can find and then set up s/o for help to buy isa.
    • bigfreddiel
    • By bigfreddiel 18th Dec 15, 8:10 PM
    • 4,224 Posts
    • 1,952 Thanks
    bigfreddiel
    What's a help to but ISA?

    Is it one where they say yes but, no but,......

    fj
    • etoilleviolette
    • By etoilleviolette 25th Jan 16, 1:02 PM
    • 2 Posts
    • 1 Thanks
    etoilleviolette
    If an offer looks to good to be true it probably is. I am so glad I read this page .
    • PropertyPlayer
    • By PropertyPlayer 8th Mar 16, 10:15 AM
    • 4 Posts
    • 2 Thanks
    PropertyPlayer
    Up-front apologies for a possibly controversial first post, but no offence intended.


    Re the HtB ISA amounts, the max in 2 years is (£1000 + 24 x £200) £5,800 - I guess you calculated the first year and doubled it, without allowing that the initial £1000 is a one-off; HtH
    With interest and termination bonus, that would turn into about £7.5k towards deposit - around a 15% return?


    re the OP, I'm not an expert but I don't see any evidence for the scathing responses, which also lack some accuracy:


    1. FSCS is the savings compensation scheme (which doesn't cover this or peer-to-peer - P2P - lending), not the regulator which is the FCA and according to the website DOES cover this scheme.


    2. There are several warnings relevant to investment being full-term and not guaranteed, which are always applicable in investment - rather than savings - scenarios; higher returns from higher risk.


    3. One of the specific conditions is that clients have no more than 10% of funds in this type of scheme, meaning a limit of £2.5k in the OP - which is below the minimum investment level accepted making this particular scheme a non-starter or the OP anyway!

    Please note I do not have any connection with LC&F, but has anyone any actual experience or knowledge of them? These bonds seem on a par with higher-rate P2P but much less effort, and I'm seriously considering it! TIA - Steve
    Last edited by PropertyPlayer; 08-03-2016 at 11:19 AM. Reason: clarity
    • jimjames
    • By jimjames 8th Mar 16, 12:14 PM
    • 13,169 Posts
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    jimjames
    re the OP, I'm not an expert but I don't see any evidence for the scathing responses, which also lack some accuracy:
    Originally posted by PropertyPlayer
    You may actually want to reconsider your views as it appears you are the one that isn't accurate in facts. I think most people here have a lot more experience and can see past the marketing spiel.

    The website seems very clear:

    - In the event that these borrowers default on the loans, investors are likely to lose some or all of their investment. Investment in the bonds of London Capital & Finance is therefore speculative and involves a degree of risk
    - Interest payments are not guaranteed if the borrower defaults
    - LC&F is registered with the FCA for consumer credit activities

    It is NOT registered for investments so these are non regulated investments where you can lose 100% of your money and also not get interest paid.

    It is not like a normal investment where you can assess the risk and make a decision and ARE protected by FSCS. Far better to invest in the stock market in a balanced fund where 100% loss is not possible unless the world is destroyed and are covered by FSCS/FCA regulation.


    Please note I do not have any connection with LC&F, but has anyone any actual experience or knowledge of them? These bonds seem on a par with higher-rate P2P but much less effort, and I'm seriously considering it! TIA - Steve
    Originally posted by PropertyPlayer
    I can't see how they are on a par with any investment that is either regulated or offers lower risk. Less effort for more return would suggest to me that you have a much higher likelihood of losing all your money.
    Last edited by jimjames; 08-03-2016 at 1:10 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • bowlhead99
    • By bowlhead99 8th Mar 16, 12:24 PM
    • 8,468 Posts
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    bowlhead99
    re the OP, I'm not an expert but I don't see any evidence for the scathing responses, which also lack some accuracy:


    1. FSCS is the savings compensation scheme (which doesn't cover this or peer-to-peer - P2P - lending), not the regulator which is the FCA and according to the website DOES cover this scheme.
    Originally posted by PropertyPlayer
    No, FSCS is the Financial Services Compensation Scheme. It is not specifically for savings (depositary accounts with £75k limit) but can also cover failure or fraud where you have a claim against a regulated investment business (eg broker, platform, advisor) who has wronged you; the limit is £50k instead of £75k for such cases.

    However, in respect of these loans, which would be made as unregulated investments, you have no recourse to FSMA, FOS or FSCS.

    The regulator (FCA) doesn't 'cover this scheme' in terms of giving you any kind of protection against things going wrong. He just gives a consumer credit licence to the company because from the perspective of the SME borrowers, the company is helping finding them some loan finance so presumably it needs one (depending on exactly what type of borrower it facilitates the loans for)


    2. There are several warnings relevant to investment being full-term and not guaranteed, which are always applicable in investment - rather than savings - scenarios; higher returns from higher risk.
    You are right of course, investment risk, counterparty risk etc are all relevant to all sorts of investments. The OP didn't want investment risk because her son needed the funds to buy a house in 2 years. So it was worth pointing out that this scheme could allow 100% loss of capital and was not at all comparable to lower interest bank accounts. This is not misinformation and didn't lack accuracy.

    3. One of the specific conditions is that clients have no more than 10% of funds in this type of scheme, meaning a limit of £2.5k in the OP - which is below the minimum investment level accepted making this particular scheme a non-starter or the OP anyway!
    We don't know the OP's full circumstances. To get the information they would indeed need to sign off (self certify) on one of the qualifying criteria that stops the promotions being promoted to all and sundry. Personally I could buy this without bothering about some 10% "restricted investor" limit as I would use one of the sophisticated investor or high income or high net worth criteria.
    Please note I do not have any connection with LC&F, but has anyone any actual experience or knowledge of them? These bonds seem on a par with higher-rate P2P but much less effort, and I'm seriously considering it! TIA - Steve
    I don't see how it is much less effort than higher rate p2p. Both require your providing personal details, a bunch of cash, and critically evaluating an investment opportunity.

    I have no direct experience with them either. The standard advice on this and similar threads for members of the public to not get involved with things they don't understand with money they can't afford to lose, and for them not to consider an unregulated investment opportunity to be comparable with traditional regulated opportunities, is fine, whether or not it comes across as "scathing". Better to be overcautious than over-aggressive.

    If you are more sophisticated and can afford the potential losses in pursuit of the potential gains, and have had professional advice about it, or are happy to go ahead without advice, then of course, go ahead.
    Last edited by bowlhead99; 08-03-2016 at 1:28 PM.
    • dunstonh
    • By dunstonh 8th Mar 16, 12:46 PM
    • 97,588 Posts
    • 65,705 Thanks
    dunstonh
    1. FSCS is the savings compensation scheme (which doesn't cover this or peer-to-peer - P2P - lending), not the regulator which is the FCA and according to the website DOES cover this scheme.
    The FCA is the regulator and does not cover anything. FSCS protection is important on retail products and a concern for people who would normally only deal with deposits.

    2. There are several warnings relevant to investment being full-term and not guaranteed, which are always applicable in investment - rather than savings - scenarios; higher returns from higher risk.
    However, regulated retail investments work to a higher standard and have greater consumer protection than unregulated investments. For example, a regulated retail investment gives you access to the FOS. An unregulated investment does not.

    Remember that the OP was looking at a 2 year timescale. Totally unsuited for this investment.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • PropertyPlayer
    • By PropertyPlayer 10th Mar 16, 3:45 AM
    • 4 Posts
    • 2 Thanks
    PropertyPlayer
    Thanks for the foregoing responses to my post, which provide significant clarification to the thread and indeed very interesting and useful further information, especially I would imagine to others like myself who are fed up with the dismal returns on traditional savings products and are seeking more lucrative alternatives.


    I fully understand the LC&F bond scheme was totally unsuitable for the OP for many reasons, but resurrected the thread because I was interested in any specific feedback having recently become aware of them.


    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.
    • bowlhead99
    • By bowlhead99 10th Mar 16, 6:07 AM
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    • 15,511 Thanks
    bowlhead99

    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.
    Originally posted by PropertyPlayer
    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.
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