RateSetter overhauls Rolling Market product

[locutus]

RS finds another way to make their product even worse than it already is.

http://www.p2pfinancenews.co.uk/2018/05/...t-product/

[Frank Spencer]

So I withdraw £1000 on 7 June, and then I withdraw £25 on (say) 15 June, but I can't reinvest my £1000 (or even £10K?) until 15+14=29 June 22 days after withdrawal... and I have to accept market rate, not set my own. (Not that I would at current rates).

OK. Suits me.

Ratesetter - byeee!

[dualinvestor]

So I withdraw £1000 on 7 June, and then I withdraw £25 on (say) 15 June, but I can't reinvest my £1000 (or even £10K?) until 15+14=29 June 22 days after withdrawal... and I have to accept market rate, not set my own. (Not that I would at current rates).

OK. Suits me.

Ratesetter - byeee!

Rates have been depressed for a while, the ISA effect (tens of millions according to the article) but the reasoning from RS is just corporate speech for we are screwing the lenders.

As you say byeee!

[swiss]

I've read that post 3 times. I still don't understand parts of it. Do they mean withdrawal from the loan pool or from the platform to a current account for example. Does it mean that if I get say 2.9% on the 10th of June then I?m stuck at that rate until I withdraw (or the underlying loan repays) even if that?s say two years later and ?average? rates rise in the mean time?

Edit. The website is a little clearer. Withdrawal is from the loan book. If you are unlucky at get a low rate on the start, you are basically in trouble.

I was reducing my RS exposure already but I?m thinking a full withdrawal on say the 4th of June then potentially reinvest as ?new ? money after the system changes. Or just move off platform. One to think on, but definitely not seeing this as an improvement.

[fireplan]

Will they change their name - after all if you cant set your own rate.... its not ratesetter

I have had money sat waiting to invest at 4.5% in the 1 year for some time now which hasnt gone anywhere. I think it may soon be heading out and into another platform.

Might register other half and throw £1K in for the £100 return and £50 referral fee but I suspect that RS is going to lose anything else of mine.

[TalkToMe]

I think in reality this is a belated acceptance by RS that their rolling market is not a rolling market at all. It is just 5 year loans that don't charge you a fee to exit.

So I don't really understand why they don't just make it all very simple.

Lend for up to 5 years

Option 1: 3% with no fee to exit

option 2: 5% with 1.5% fee to exit

Or maybe I am just missing the point of all this which is highly possible

[rgog]

Yep, like others I have already halved my investment in RS. Now I think it may be time to bid a not so fond adieu!

[dualinvestor]

This has one, small, advantage. The rate in the rolling market as I type is 2.5%. Therefore someone new to the platform will probably accept that figure at approximately 5pm on a Wednesday afternoon, whereas during the day it "matches" at some time were in excess of 3%. So if the higher rate is applied to all money lent, or re-lent, today it is slightly fairer.

However since the start of the year the rate has been as high as 4% plus and has fluctuated on a downward trend, IMO due to the arrival of the ISA, and the new tax year has continued that lower rate, if the "ISA" effect wares off and rates in general rise the change will result in old money being stuck at c.3% while new money gets, say, c,4%. Making it more like a fixed rate savings account than a rate you set for yourself.#

With a bit of searching and effort you can get 3% on a FSCS account, and it is likely to rise with the general trend in interest rates if common wisdom in the financial world is correct, why would anyone knowingly tie themselves in at the current, low, rates for up to 5 years?

[SueM]

You can do better with the AC access accounts, with a whole lot less spin, and worrying about PFs. I thimk RS gas completed their descent into the pit .. where is Westonkev to comment?

[dualinvestor]

You can do better with the AC access accounts, with a whole lot less spin, and worrying about PFs. I thimk RS gas completed their descent into the pit .. where is Westonkev to comment?

He's gone to The Money Platform, at least he was there but I'm not sure if he is still there, from comments by investors there that company has not exactly covered itself in glory.

[dualinvestor]

Will they change their name - after all if you cant set your own rate.... its not ratesetter

I have had money sat waiting to invest at 4.5% in the 1 year for some time now which hasnt gone anywhere. I think it may soon be heading out and into another platform.

Might register other half and throw £1K in for the £100 return and £50 referral fee but I suspect that RS is going to lose anything else of mine.

Zopa didn't bother, remember it stand for Zone of Potential Agreement, it hasn't been that for years.

[investibod]

I had been in draw down mode with ratesetter for some time. My last 2 loans repaid early last month,so I am now out of it. Hindsight is leading me to think that is a good thing.

[Frank Spencer]

Looking at recent posts the another forum, what I didn't realise (because I am in withdrawal mode at current low rates) is that the "rolling market" has completely abandoned its monthly guise, where we invested for (up to) a month and had all capital and interest returned according to lender instructions.
Now it is stated that reinvestment (at what ever market rate RS chooses) is compulsory rather than optional, unless capital is withdrawn by request and that can not be reinvested in that market for fourteen days.

What a stupid move.



Oooh! I like playing with these colours etc in the edit facility. Can we have full font control on standard reply posts please, rather the "Quick"?

[gareot]

Well I've only two rollers left and they'll finish before the new rules apply so hopefully I can remove them from the platform without any hassle.
Then it's bye bye rolling market.
"What a stupid move", Agreed.

[zappa]

Oooh! I like playing with these colours etc in the edit facility. Can we have full font control on standard reply posts please, rather the "Quick"?

There's a 'Reply' button at the far right of the Quick Reply bar - clicking that takes you to the 'full fat' edit feature and transports any text entered into the 'quick reply' box along with it.

Any good?

[img]

[dualinvestor]

That's why @zappa gets paid the big bucks, wait a minute he doesn't get paid anything

[Frank Spencer]

Doh!! :-/

Thank you @zappa . Working that out was way beyond my abilities.

[dualinvestor]

I am now out of the RS rolling market and will withdraw funds from the 5 year product as they come in, the return is simply worth the risk, 2.1% rolling and 4.3% 5 year admittedly over the weekend and "provision fund" protected but you can get the former FSCS protected and the changes can only depress rates further.

[Darabont]

for the benefit of the exiled RS users @dualinvestor @oldgrumpy et al

[quote source="/post/285198/thread" author="@ratesetter" timestamp="1535630417"]In a few days' time we will reintroduce the rate-setting function for capital reinvestments in the Rolling market. There have been some questions on this forum about what this will mean, so we wanted to post a recap of the key points from our update to investors at the start of August, which was included in the monthly statement email to all investors (a copy of the update can be found here: https://www.ratesetter.com/blog/article/...ing-market).



Money invested in the Rolling market is, and will continue to be, matched to a borrower for the full term of their loan contract. Each month, the borrower (or the Provision Fund) makes payments of capital and interest back to the investor. Capital repayments will continue to be automatically reinvested – this is definition of the Rolling market, that invested capital 'rolls' until you request to withdraw your investment. Interest payments may be reinvested or directed to the Holding Account.



From 5 September, you will be able to set your own rate on both reinvested capital and interest, or choose to automatically match at the prevailing Market Rate.



There are no changes for new money invested in the Rolling market: the option to take the Market Rate or set your own rate for new investments will continue as now.



The Fair Usage policy will continue to apply. This policy means that when an investor withdraws money from the Rolling market – which continues to be fee-free – they have to wait for 14 days before placing a new order on the Rolling market (an exception is made for funds withdrawn from the Rolling market in Everyday Accounts which are then transferred to the ISA Account. These funds may be invested again without interruption).



We introduced this policy because if an investor withdraws money from the Rolling market and immediately reinvests at a higher interest rate, it has a cost to RateSetter. Investors are matched to borrowers for the full term of the loan and we cannot change the borrower's APR, so if existing loans are re-matched to an investor at a higher rate, someone has to pay the difference. One alternative to prevent this manipulation is to introduce a reassignment fee that is based on the difference in rates between the existing and new contract, however we hope to keep the Rolling market fee-free the Fair Usage policy helps us to achieve that.



We have noticed that a small number of investors have been using the 'cancel order' option as a way to set their own rate on capital reinvesting in the Rolling market and this has also been flagged by forum participants. As, investments in the Rolling market 'roll' until you request to withdraw fee-free and, from 5 September onwards, you will be able to set you own rate on all money reinvested in the Rolling market, from 5 September you will no longer be able to cancel reinvestment orders in the Rolling market. You will be able to change your rate on reinvestment orders and to cancel orders on newly invested money.


Thank you.

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