and if you want out you can't sell, the secondary market is a dead duck because no one wanted it, according to the survey results.....
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and if you want out you can't sell, the secondary market is a dead duck because no one wanted it, according to the survey results.....
I will most likely still invest in harmoney after the fee change, their returns arent bad at all (even after the fees and write-offs).. I have had up to 60% of my entire portfolio in it already, and i think it would be better to just watch how things unfold before i decide to pull out entirely.
As long as my RAR stays roughly the same, give or take a few. I dont see why i shouldnt continue with them
Assuming real returns stayed similar, then sure. My calculator says otherwise. I see real returns under 10% within a year. Not worth the risk compared to other p2p platforms IMHO.
Unrelated question,
Why does it seem like where my RAR should be displayed i instead get
http://imgur.com/edit
Is it something to do with not enough capital returned yet?
If it goes below 10%, i may consider other alternatives.. Theres alot of investment vehicles that make that same amount, that doesn't necesarily involve p2p. I've been heavily invested in the other lending platforms too, but there seems to be hardly any action on them
Based on my return of 12.94% last financial year the new fee structure would have dropped my return to 10.7% based on the 20% commission or 11.45% based on 15% commission. Currently paying just over 5% of interest in fees. I have opted for a conservative spread with 20% in As and 40% in Bs - I might have to reconsider the spread and perhaps use other platforms for the lower risk investments - first time I have seriously considered the other P2P platforms since I have been pretty happy with Harmoney.
I'm with you Art. I haven't worked out the difference the fee hike will make to my investments but at a current cost of around 5% I can't see a hike to 20% on interest only is going to be in my favour. I have stopped reinvesting as of today and will maintain a wait and see approach.Quote:
first time I have seriously considered the other P2P platforms since I have been pretty happy with Harmoney.
Personally, I think Harmoney, until today, did a pretty good job. They've F****d up on this one big time and unless they can prove that this fee change isn't going to seriously affect our returns, I will be jumping ship.
It will vary with a different interest rate but one loan I reworked...
$250 @ 20.03% for 36 months. Old fee totalled $4.18. New fee at 15% is $12.70. 17.5% is $14.82 and 20% is 16.93. Roughly 3 times, 3.5 times and 4 times respectfully.
Repayment $250 and total interest $84.67.
Now take off RWT at your rate (remember it comes off of the gross, not the nett) and your actual return is....
For comparison
looks like Lending Club of USA still only charges 1% fees.. Makes you wonder, they've been around for far longer than HM and still have modest fees.
Tho in fairness, the delinquency rate in Lending Club is far greater
Brian Barefoot from LC USA is on The Harmoney Advisory Board
I've got two issues 1) the size of the fee increase, and 2) the way it has been represented. The former is up to me to do something about, and I will be approaching the alternative providers. Here's my views on the latter.
The Dec 15 interest rate increases were done as part of their move from a variable/risk-adjusted fee to a flat fee, with the intention that borrowers paid around the same amount overall.
The theoretical example on their website uses interest rates from before the change, links/compares them with current interest rates, with the implication that the current fee change is related. I think that is pretty clearly misleading or deceptive. The Fair Dealing section of the FMC Act deals with "misleading or deceptive conduct".
Harmoney, you may wish to change the example otherwise I will complain to the FMA on Monday.
In a private email a Harmoney Employee has told me that if they did not do this they would go bust.
Perhaps the expansion into Australia is not going so well, plus all the advertising etc.
"Whoop, whoop......warning, warning"Quote:
In a private email a Harmoney Employee has told me that if they did not do this they would go bust.
Are you certain that service charges will be deductible for all investors including for those who are "not in business"?
Harmoney states on their website (my emphasis): We expect that fees paid by Investors will be tax deductible. Each Investor’s circumstances are different, so we recommend that they seek independent tax advice
https://www.harmoney.co.nz/how-it-works/fee-changes-for-lenders
So they only "expect". There has been no guidance from IRD and apparently Harmoney is no longer seeking guidance on behalf of the various types of investors in this new category of financial investment.
In an item about p2p lending on mortgagerates,co,nz an IRD "spokesperson" is quoted: Generally, for the lender to be able to claim expenses relating to their lending, such as commissions and other fees, they would need to be in the business of lending. http://www.mortgagerates.co.nz/artic...ax-advice.html
So for an investor not "in business" it seems not to be clear cut, So definitely DYOR. Deductibility of service charges is set to have an even greater impact on after tax returns after these proposed hike in charges are due to take effect. The tax treatment of investors' p2p returns needs guidance from IRD imo.
I do not post email without the other persons permission. I would suggest sending your own email to investor diservices @ harmoney