Saturday, 16 May 2020

TruePillars Platform Changes


To get started back into the swing of writing after a bit of break from writing (my investing has been continuing as normal) I thought I would take this opportunity to share some new developments happening on the TruePillars platform. At the end of October, the PDS was updated to reflect some new changes to the Platform. I recommend everyone have a read of the PDS (for latest PDS there is a link at the bottom of the home page) to ensure you are familiar with what you are investing in, how it works and what risks you are taking on.
Some of the key highlights and changes on platform for me are
  • Changes to the security ratings on new loans
  • Auto bid now also purchases loans on the secondary market
  • Part interest received when you sell loan units
  • New TruePillars Select loans
  • New loan status definitions in the investments tab of your portfolio

Changes to the security ratings on new loans
This change is adding a different element to the rating of a loan. Previously the rating was only on the quality of credit worthiness of the loan (ability to continually pay or having a strong income verse expenses of the business). The new security rating adds some additional guidance of the assets that support the loan application. This security used in the unfortunate event of default of the business where it can be sold off to recover the capital to investors. The security is rated on a score of A to E.  Loans with an A rated security are better equipped to recoup investor capital than those rated E. It should be noted that Loans issued prior to the addition of this security rating category have been automatically rated an E regardless of the potential security of older loans. 
This is a great change and allows for investors to make more informed choices when deciding to invest in a loan. 

Changes to Auto Bid
Auto bid was used to automatically place bids into new loans on your behalf based on your criteria. I’ve been using this feature for a while to make my investing easier.  This has now been extended to the secondary marketplace where the autobid will purchase loans on the secondary market which meet your loan criteria.
While this is good to help people automate their portfolios, there are a few features I would like to see changed / added.  The first is if you have purchased secondary market loans manually (my portfolio has quite a few), the autobid does not recognize you already have investments in the loan and will purchase it again if they become available.  These means that my strategy to keep loans at set investment values has been put out of kilter. The system also does not recognize if you have sold out of a loan as it automatically repurchased a couple I had sold out of (one of which is now on my defaulted list).  
In addition to changing the above I would like to see an option to choose whether autobid purchased from the secondary market or not.  Given the current climate with COVID-19 TruePillars has disabled autobid for the moment.  You can still manually purchase new and secondary market loans with my current straight only to purchase new. 

TruePillars Select Loans
In December last year TruePillars started offering the purchase of Select Loans as the result of the purchase of an existing loan book from another bank.  This was on the back of strong Investor demand for loans that was outstripping new loans becoming available on the platform. These loans were issued by another bank meaning the loans are part way through repayments.  There is a great video explaining the Select loans here
You can easily identify the Select loans in the Market place as loan icons contain a watermarked “S” in the top right corner.  

New Loan Status definitions
As part of continually improving the communication to investors and help draw the distinction between loans two new categories have been added.  The list of definitions that can now be applied to loans you are invested in are as follows:
  • Active
  • Attempting Collection
  • Overdue
  • Credit monitoring (New)
  • Deferral agreed (New)
  • Defaulted
 The new categories allows investors better visibility at a glance which loans are overdue and which loans have been proactive and worked with Truepillars to come to an agreement on deferred payments.  This change is even more relevant in the current climate of COVID and helps us quickly view those businesses currently experiencing some hardship.  Detailed descriptions of the different loan statuses can be found on the Investor FAQs under the question What does Loan Status Mean?

TruePillars is continuing to evolve and grow.  While I would prefer to see a few tweaks to some of the new functions, I’m happy to see the site refining their product offering to make it easier and better for investors. 

1 comment:

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