Lending Changes to FC

There has been a shift in the investment community over the past couple of years towards robo-advisors.

Basically if you were an enthusiastic investor you'd probably have your money invested already so there is no point in trying to sell you a product. The untapped money is with people for who shares are "too complicated" or "too risky". The people selling these products are hunting for money to feed the market and not worried about its behaviour.

For me, FC are just doing the same thing. 

Essentially they stopped me from being able to be a stock picker and told me I can only buy their managed product

Like a few others on the thread, I stopped bidding on loans after the switch away from the auction model. I've been drawing funds down as they become available. All my loans are 14.8%+ (apart from the defaults and a certain London Property loan). Not being able to sell the loans quickly and at a hefty premium if I ever needed to is a bit annoying but not the end of the world.

FC doesn't care about me (and as long as I can withdraw funds that doesn't bother me). Now that they platform is established, it makes better business sense for them to target the larger pool of untapped money that doesn't want to (and now can't) ask questions than the smaller volume that do.

I started with FC as (without sounding like a P2P fanatic) I wanted to see my money work in the economy instead of being sequestered away - which IMHO is what has happened with QE which is why we've seen such high asset price inflation. For me, FC doesn't offer that anymore - it has just become a conduit for risk takers to pull money from the future from those who have saved it in the past. 

I find that a very scary prospect. When there is no one left to invest - and I hope that this isn't the case - we'll find out that lenders have been covering deficits instead of funding investment as there has been no one to do the DD. In that situation diversification doesn't help.

In short I think that it is a shame what FC is doing but I can understand why. I'm more concerned about what this means for the overall model where a few bad apples can spoil a whole barrel.

Oh, just noticed these gems in the terms and conditions.
'.........we've included new circumstances where a borrower may be defaulted, for example where they are abusive to FC employees'
Borrowers beware as you can be chucked out too
'.....we believe any action you undertake(.......) will have an adverse effect on the FC platform or FC's reputation'

You see, just as with Brexit and Trump, you've got to stick around to see how things pan out - call it a perverse form of schadenfreude where you get to share in the suffering.  Sorry FC, don't chuck me out until Short term London and Absolute Disaster have coughed up; make allowances, I'm just ******* ****** ***, a little disappointed.

Can't see FC giving a flying duck about this forum consisting as it does of an educated elite minority.

What do people think about buying up some e grade loans now at a good price, and then holding till they run down?

Probably fine as long as you are well diversified as there will be defaults (i would say min 50 loans).

Main thing about this that would worry me is if you decide to withdraw some of your money you don't know what FC will sell for you so you may well be left with a less diversified portfolio than you would like (unless they sell down in a clever way)

I suspect it is more like 95% will be =slightly= better off, 5% will be =quite a lot= worse off, and one (FC) will be a lot better off.
Likely that most of this forum's readers will be in the 5% though.

You would think that, given this is a compulsory process, the sale of part of a portfolio would be managed to maintain max diversity. With Autobid buying more than one part in a loan, max £100, they should plan to keep at least one part in as many loans as possible.