Wellesley & Co Review – My Updated Lender Review

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Wellesley & Co review

Wellesley & Co Review

** Wellesley & Co review updated February 15th, 2019**

Wellesley & Co is a company once considered by many as one of the premier peer to peer investment choices. Unfortunately, they reduced interest rate returns and ceased offering a peer to peer product, so I no longer consider Wellesley as a viable investment choice.Read on for my Wellesley & Co review.

My current rate of return: 0% (I no longer invest here)
Est. Annual Returns:Up to 5.2% Mini Bonds / Up to 4.75% Property Bond
Recent Return Rate Trend:
My Risk Rating *:
Launched:November 2013
Early Exit:
Autoinvest:✓ on Mini-Bond only
Provision Fund:
✓ (Ending Q3 2017)
ISA Available:
X
Loan Types:Mini-Bonds / Property Bond / No peer to peer
Loan Security:Mini and Property Bonds are unsecured
Lender Fees:£50 early sale fee on Property Bonds
Min Investment:£100 Mini Bonds, £1,000 Property Bond
Avg. Lender Portfolio Size:Unknown
Time to Become Invested:Unknown
Time Needed Managing:
Low
Lending Agreements With:Wellesley & Co.
FCA Regulation:Interim
Cashback Offer:
None
Sign Up:Sign Up

* This opinion risk grade factors in types of loans offered, interest rates, platform history, default numbers and my own investing experience.

Wellesley & Co Review: What You Need To Know

Thumbs Up
  • None that I can identify
Thumbs Down
  • Company Financial Health?
  • No peer to peer lending products, only bonds
  • Mini-Bonds are an investment into Wellesley & Co the company. If the company fails, you will likely lose your money
  • Mini-bonds cannot be traded or sold
  • Property-bond will be tradable and value can fall
  • Risk not worth returns. Too many better options.

Wellesley & Co used to be one of my favourite peer to peer companies but now only offers mini-bonds which are essentially an investment into Wellesley & Co rather than into peer security back peer to peer loans. I’ve never been a fan of investing in company bonds so I’ve steered clear of investing into Wellesley & Co. Read more below for my exclusive Wellesley & Co peer to peer lending review.

Wellesley & Co Review: My experiences so far….

I originally began investing in Wellesley & Co’s peer to peer loans in 2014 and highly recommended it. Wellesley & Co was my second hop into the peer to peer waters as they offered a relatively safe way great way to get started in peer to peer lending. Wellesley & Co also provided easy investing options backed by a provision fund and security backed lending, plus an early exit strategy should it be needed.

In early 2016, Wellesley & Co announced they were reducing interest rates and changing loan terms, so I withdrew all funds and have not been back since.

What Is A Wellesley & Co?

Wellesley & Co is an alternative investment company that offers investors’ either Mini Bonds or Property Bonds. In May of 2017, Wellesley announced they would pause additional investments into peer to peer lending until Q3 of 2017 while they attempt to comply with the FCA regulators. Now it seems as if Wellesley has given up on offering peer to peer lending loans.

When Did Wellesley & Co Launch?

November 2013

How Do I Sign Up?

Sign up here. Currently, there are no cashback offers.

What’s The Signup Process Like?

Not bad but they do require official documents and they run the usual i.d. checks.

Who Can Open An Account?

Wellesley & Co states overseas residents can open accounts but it is country dependent. Contact them for more information. People residing in America may have issues opening an account. You have to be a UK resident to invest in Bond products.

What’s The Minimum Deposit / Investment?

Deposit Bank Transfer: £100
Mini-Bond Minimum Investment: £100
Property Bond Minimum Investment: £1000

Is Wellesley & Co Regulated? 

Yes, by the UK Government’s Financial Conduct Authority registration #655503 under full permissions. FCA regulation is nothing like the FSCS (Financial Services Compensation Scheme), which covers consumers when they deposit money in banks. The FCA does have the ability to pursue criminal action against companies it finds are in violation of its standards, but it’s not a government entity and its funded by the very companies it regulates.

Wellesley & Co Financial Health

Wellesley made an after-tax profit of £96,524 for the tax year ending December 31st, 2017. Company accounts can be reviewed here.

Does Wellesley & Co Offer an Innovative Finance ISA?

No but the Property Bond can be held inside an ISA wrapper.

How Much Interest Does Wellesley & Co Pay Lenders and What Are the Different Investment Products?
Mini-Bonds: Up to 6% p.a.

 Wellesley & Co returns

Mini-bonds range from one to five years and pay out Net interest using a 20% tax rate.

Mini-Bonds are an investment into Wellesley & Co to help aid its expansion and probably help fund losses. These bonds are unsecured so if Wellesley ceases trading, you could lose your capital.

Property Bond: Up to 7% p.a.

The Property Bond doesn’t have a release date but it will be listed on the Irish Stock Exchange and be tradeable like a share. Each bond share will cost £1,000.

The risks here are apparent. Your original investment could be worth less when you come to sell if the bond price falls on the stock market. Also if Wellesley goes out of business, while the bond holds Wellesley’s property loans as security, the bond price could fall dramatically.

I don’t see the attraction of the Property Bond. I personally think the risks are too high. You can read the Property Bond prospectus here.

Peer To Peer Lending

All new peer to peer lending investments have been paused. This is due to Wellesley needing to comply with FCA regulation. I don’t think Wellesley will offer future peer to peer lending products, only bonds.

What Are the Loan Default Rates? 

You can see current loan book statistics here.

What Are the Fees? 

Inside the Property Bond prospectus, it mentions a Variable Service Fee but there aren’t any details of what this fee will be. I would imagine there will be some sort of annual management fees included in each bond.

How Long Are The Investment Terms?

One to five years depending on the product you choose.

What Are The Main Risks?

Company Failure: This is a risk with every peer to peer company. If the business model fails, investors could lose all of their investment even though older peer to peer loans are backed by property.

Economic downturn: Since Wellesley & Co has only been around since 2013, it hasn’t experienced a severe economic dump or property crash. If one happened, the risk is that properties aren’t worth what they were valued at and in the event of a quick default sale, could bring less money than was owed on the loan note.

Is There A Provision Fund?

No

Am I Lending To Wellesley & Co the Or To Borrowers?

All investors money is invested into Wellesley & Co’s bonds rather than into traditional p2p direct lender to borrower agreements. Money invested into Wellesley’s bonds will be lent out to property developers but investors won’t determine how the money is lent.

What Happens If Wellesley Ceases Trading?

While Wellesley has a trustee in place which would assume the responsibility of managing the loan book to attempt repayment of existing loans. The issue with bonds is while they invest in secured loans, the bonds themselves are unsecured.

THUMBS UP FOR WELLESLEY & CO:

Secondary Market / Early Access

From my own research, I can’t see any advantages in investing through Wellesley as I’m not a fan of corporate or mini-bonds.

THUMBS DOWN FOR WELLESLEY & CO:
Company Financial Health?

After posting after-tax losses of £456,000 in 2016, Wellesley managed to post a small profit of £96,000 in 2017. I’ve read previous financial reports from Wellesley and they haven’t been positive but at least the compay is headed in the right direction.

Mini-Bonds Are Risky / Agreements Are With Wellesley, Not Borrowers

To be covered, it’s always in a lender’s best interest to have loan agreements directly with borrowers. If you invest into Wellesley, you are investing in Wellesley the company and their bonds. This is risky because if the company fails, your capital is at risk.

Mini-Bonds Cannot Be Traded Or Sold

If you invest in Wellesley’s Mini-Bonds and you want to exit, you might be trapped until your investment matures. Wellesley states that investors can request an early exit but no guarantees are made.

Property-Bond Will Be Tradable And Value Can Fall

Since the Property-Bond will be listed and tradeable on the Irish Stock Exchange, it’s value can rise and fall just like a stock. This means that your bond value could be less than what you paid for it.

Low Return Rates For Risk Involved

I’m not a fan of bonds in general and I don’t think Wellesley’s highest paying five-year bond rate is worth the risk. Wellesley doesn’t publish its loan book anymore but when they did, I saw borrower loans paying 13% annually.


My Strategy

I withdrew from Wellesley & Co early 2016 when I no longer thought the risk was worth the lower interest ratereturns they were offering to lenders’.

The Wellesley & Co Review Conclusion

Wellesley used to be one of the favoured alternative finance companies but things took a  turn when they purposely lowered their returns to deter new investors and then suspended further peer to peer lending investments.

The Mini and Property Bonds offered are direct investments into Wellesley & Co rather than into peer to peer loans. The bonds were introduced to raise capital. There are far better alternatives in the peer to peer world that I believe are less risky. Consider Assetz Capital, Ratesetter, Landbay and Lending Works as alternatives.


Sign up here. Currently, there are no cashback offers.

Wellesley & Co review disclaimers: I’m not paid to write this Wellesley & Co review nor am I employed by or any of the companies I write about. In most case, I have invested or continue to invest my own money through these companies. The sign up links on this Wellesley & Co review and in other articles on this website are often referral links. When you sign up for an account through my website, I receive a referral fee directly from the companies, at no cost to you. Your support enables me to continue to operate the Financial Thing website. You can read more about my referral links here.

This Wellesley & Co review is for information purposes only and should not be regarded as investment advice. Opinions expressed in this Wellesley & Co review are current opinions and based on my own personal experiences. Peer to peer lending contains risk so never invest more than you can afford to lose.