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  1. #431
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    When you see loans sitting on the secondary market for longer than an hour or so, it is usually because the remaining term on the loan slips outside the tolerances for auto matching above, or the loan being sold has had some form of credit event. In those cases, the platform will be waiting for confirmation from the investor(s) who best match the loan (one way or the other).
    Thanks Tim. I am told that the wait, even on loans without any credit event, isn't hours - but can be days or even weeks. That doesn't sound an easy or simple exit. Still wondering ...

  2. #432
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    Quote Originally Posted by beacon View Post
    Thanks Tim. I am told that the wait, even on loans without any credit event, isn't hours - but can be days or even weeks. That doesn't sound an easy or simple exit. Still wondering ...
    Thanks for bringing this to my attention @beacon – to my knowledge we've not heard from any investor about this issue previously so we’re digging into this to see what might be causing delays with transfer requests.

    From my initial review, it looks like there could be a bottleneck in our processing when the investment up for transfer doesn’t meet the automatic transfer criteria outlined in the Secondary Market Rules - usually because the remaining term on the investment is below the term tolerances or the loan the investment relates to has had a credit event at some point.

    What happens in those scenario's is that investors are offered the investment one by one until someone accepts i.e. if first investor declines the offer, it is offered to the next investor in the queue and so on with each investor given 24 hours to accept or decline. It is that process that looks to be causing delays – so the team are working through some examples to see what we can do to speed the process up which may include adjusting the tolerances or perhaps offering the investment to a wider group in the first instance.

    It looks like the average transfer time this year is around 2 days - but there is certainly evidence that investments are taking a lot longer than that to shift when the scenarios above present.

    I will report back when we get to the bottom of the issue and have a resolution.

  3. #433
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    From my initial review, it looks like there could be a bottleneck in our processing when the investment up for transfer doesn’t meet the automatic transfer criteria outlined in the Secondary Market Rules - usually because the remaining term on the investment is below the term tolerances or the loan the investment relates to has had a credit event at some point.
    A credit event is really irrelevant to an investor because of the reserve fund. That is why they pay the 2% extra for every loan (good or bad), don't they?

    The remaining investment term is also really irrelevant to an investor (except for the higher interest rate higher term loans offer alongwith greater probability of greater longevity) because these loans can be repaid early without penalty irrespective of investment term anyway.

    So, if dozens of loans are sitting in your secondary market unsold for weeks (even months for the odd ones, I've heard) at 8%+ when investors are queuing to be filled at 6%, there are definitely serious bottlenecks in your system. Interestingly, this is when your webpage apologizes for investment delays on account of loan demand exceeding supply.

    I'm also told your secondary market is opaque to most of your investors at most times, because secondary market loans at rates higher than your bidding range are rarely visible to your investors. Perhaps sunlight will do the Squirrel loans some good.
    Last edited by beacon; 06-02-2020 at 04:21 AM.

  4. #434
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    Quote Originally Posted by beacon View Post
    A credit event is really irrelevant to an investor because of the reserve fund. That is why they pay the 2% extra for every loan (good or bad), don't they?

    The remaining investment term is also really irrelevant to an investor (except for the higher interest rate higher term loans offer alongwith greater probability of greater longevity) because these loans can be repaid early without penalty irrespective of investment term anyway.

    So, if dozens of loans are sitting in your secondary market unsold for weeks (even months for the odd ones, I've heard) at 8%+ when investors are queuing to be filled at 6%, there are definitely serious bottlenecks in your system. Interestingly, this is when your webpage apologizes for investment delays on account of loan demand exceeding supply.

    I'm also told your secondary market is opaque to most of your investors at most times, because secondary market loans at rates higher than your bidding range are rarely visible to your investors. Perhaps sunlight will do the Squirrel loans some good.
    Hi Beacon - you are correct regarding the relatively low relevance of the credit event disclosure given our reserve fund model, that disclosure is however a condition of our secondary market licence – so we can’t avoid doing that unfortunately.

    I also agree with your feedback regarding the remaining investment term - and we are currently looking into widening the remaining term thresholds for automatic matching.

    Regarding the small number of investments that are moving slowly through the secondary market process, we are working hard to scope the technical resolution that will help them move through quicker and should have something ready to go in the next few weeks. This particular change isn't going to solve our supply/demand issue though I am sorry and it won't get an investor bidding into a one-year interest-only loan at 6% get into a P&I term loan at 8%+.

    In the meantime, I would encourage investors to check their junk emails for Squirrel Money emails with the subject “We’ve found an investment that matches your criteria” – that is the notification we send out when an investment outside the automatic matching criteria is available to you - but you have to physically accept it before the platform will match you up. These emails often find their way into junk email folders and aren’t being seen and in some circumstances our system is re-sending them each day until they are – so we’re also looking at better ways to notify investors of this sort of thing and to stop the looping that seems to be occurring.

    I’m not entirely sure what you mean by opaque but, by design, investors generally won’t/shouldn't notice that they have been matched to a secondary market loan if the investment meets the automatic matching criteria outlined in our Secondary Market Rules document. Yes, on occasion they may benefit from the higher rates if the investment being offered for transfer is one from more than a couple of years ago, but that is just the luck of the draw. The Squirrel platform wasn’t designed so that those investments can be targeted per se, they just go to the best matched investor in the queue. To me, that seems the fairest approach don't you agree?

    Finally, I appreciate the feedback @beacon, it really can help improve the platform for all investors.

  5. #435
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    Quote Originally Posted by TB@squirrel.co.nz View Post
    Yes, on occasion they may benefit from the higher rates if the investment being offered for transfer is one from more than a couple of years ago, but that is just the luck of the draw. The Squirrel platform wasn’t designed so that those investments can be targeted per se, they just go to the best matched investor in the queue. To me, that seems the fairest approach don't you agree?
    How is your secondary market fair to loan vendors who have to sacrifice 1% interest as loan sale fee but still have to wait weeks or months to receive their funds back? Kind of waters down the benefit of a secondary market a lot, with investors not knowing when they'll be able to exit their investment (if at all!)

    Banks/finance cos. charge the 1% break/penalty fee too but their redemptions are instantaneous. Your model is different, but Squirrel pitches itself as better than these in the first place to justify its comparatively lower interest rates vs the NZ P2P sector, isn't it?

    I think if no acceptance confirmation emails were needed from the investor for making the initial investment in a loan (making your process automatic), then none should be needed for investing in the secondary market loans either (making this process automatic), since you do not disclose loan details at initial investment anyway and acknowledge that credit events and loan terms don't really disadvantage a secondary market loan buyer. In fact, everyone then gets a chance to benefit from an improved rate (rather than just the lucky guy who happened to check his junk mail folder in time). Now that would be fairer, don't you think?

    Anyway, good to see that you seem genuinely interested in listening to feedback and making some effort to improve your platform.

  6. #436
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    Quote Originally Posted by beacon View Post
    How is your secondary market fair to loan vendors who have to sacrifice 1% interest as loan sale fee but still have to wait weeks or months to receive their funds back? Kind of waters down the benefit of a secondary market a lot, with investors not knowing when they'll be able to exit their investment (if at all!)

    Banks/finance cos. charge the 1% break/penalty fee too but their redemptions are instantaneous. Your model is different, but Squirrel pitches itself as better than these in the first place to justify its comparatively lower interest rates vs the NZ P2P sector, isn't it?

    I think if no acceptance confirmation emails were needed from the investor for making the initial investment in a loan (making your process automatic), then none should be needed for investing in the secondary market loans either (making this process automatic), since you do not disclose loan details at initial investment anyway and acknowledge that credit events and loan terms don't really disadvantage a secondary market loan buyer. In fact, everyone then gets a chance to benefit from an improved rate (rather than just the lucky guy who happened to check his junk mail folder in time). Now that would be fairer, don't you think?

    Anyway, good to see that you seem genuinely interested in listening to feedback and making some effort to improve your platform.
    Thanks @beacon. Just to clarify, as I stated above, the confirmation email is only required if: 1) the loan has had a missed payment or the like at some point, or 2) the remaining term of the investment is outside of the automatic matching rules documented in the Secondary Market Rules. The first criteria is mandated by the FMA as part of our licence to operate the secondary market - so we have no discretion with that, the second forms part of the rules we thought appropriate when launching the secondary market - so we can and will be amending that one fairly soon to help improve the efficiency of the secondary market.

    The point you make about the 'lucky guy who happened to check his junk mail' isn't quite right - the 'lucky guy' as you put it is actually the best matched investor for that investment per the Secondary Market Rules - effectively the investor at the front of the queue - so yes I do think that is the fairest approach and I do not see that changing. EDITED - perhaps we could look at offering it to a larger group, say the top 10 investors in the queue - that would presumably speed up the transfer process.

    Finally, the investment propositions and platform functionality available in the market clearly varies between P2P providers and the various financial institutions about – and yes, the rates our investors have achieved may be lower than some others – but ultimately it comes down to investor risk appetite and what features of each platform they value.

    We’ll keep working on the resolution for the small number of investments travelling slowly through the secondary market – and I’ll let you all know when its resolved.

    All the best with your investing.
    Last edited by TB@squirrel.co.nz; 11-02-2020 at 12:13 PM. Reason: Additional thoughts

  7. #437
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    Any one recently Invested funds @ 7.5% ( 5 - 7 Year Loans )...... What is the current wait time like > From placing Funds to Order being Fulfilled??

    I see that there is currently over 450K waiting in the 7% Rate queue
    Last edited by Saamee; 14-02-2020 at 01:11 AM.

  8. #438
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    ~$7500 fulfilled roughly 3 weeks ago after about a month on offer. It was taken up in 2 lots.
    Last edited by BWH; 14-02-2020 at 04:35 AM.

  9. #439
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    Big changes coming based on the email I got today.

    Good to see Squirrel doubling down on 100% retail P2P considering the news re Harmoney.
    Last edited by unhuman; 19-02-2020 at 06:15 PM.

  10. #440
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    Hi @beacon - just thought I'd provide an update on the delays in the secondary market.

    We have investigated the causes of slow investment transfers and identified a bunch of improvements and some system fixes that we can implement to improve the efficiency of the secondary market. A number of these have already been moved into production and we have now cleared all investments offered for sale before today other than one small investment that has a credit event associated with it that has been out for transfer for a few weeks.

    In addition to the tweaks to software and the process, we have implemented more regular monitoring of any investments that might get ‘stuck’ in the process. The reasons for things getting stuck look to be quite complicated as they seem to require a number of seemingly unrelated factors that come together and collectively that contribute to bottlenecks – but the most likely reason we've seen looks to be an investor either not seeing the offer emails or not quite understanding what they are being offered. We have recently started contacting those investors via phone to explain the situation and walk them through it to some form of conclusion.

    Using email notifications has also clearly created issues with investors not seeing them if they go into a spam folder etc. To remedy that situation, we are looking at options around push notifications via our mobile apps which we think will greatly improve the efficiency of that notification process. That isn’t able to be implemented immediately though unfortunately.

    Finally, it became clear that our automatic matching rules resulted in too many unnecessary exceptions so we have scoped some widening of the acceptable tolerances (usually remaining term related) to more pragmatic levels and are planning to roll out those amendments in the next few weeks which will further improve the efficiency of the secondary market.

    It is fair to say that this has proven to be a bigger can of worms than I anticipated when we first started communicating – but it has been a valuable process and has greatly improved this aspect of our platform - so thanks for all your feedback!

    Tim
    Last edited by TB@squirrel.co.nz; 04-03-2020 at 03:43 PM.

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