Question: Is 4thWay Only Listing Providers It Approves Of?

A question from Mervyn, a user

I note that it appears [4thWay’s comparison tables] only contain items relating to P2P providers that have received your varied approvals, whereas it used to contain all providers, good or bad, approved or not. Is my comment above correct or have I missed the ‘key’ to being able to read your observations on all?

My response on behalf of 4thWay

Hi Mervyn, thanks for your question.

The platforms that appear in the comparison tables are still based on almost exactly the same rules since we opened in 2014. There has just been one change. The current rules are:

• Any provider can still go through our process to be listed.
• The providers still need to provide us with answers to a lot of questions, data and documentation, access to interview keep people, and need to complete our due-diligence/assessment process.
• The providers still need to be solvent, currently open to new lending, and accepting new loans in order to stay in the comparison table and for a full review to be maintained.
• Any provider is still shown regardless of quality. Poor providers still get candid, negative reviews from 4thWay.
• The providers still have to demonstrate that they are doing P2P lending using article 36H P2P agreements or that they are otherwise using legal means to ensure that the investment risk is basically the equivalent of lending directly to the end borrower and not lending to the platform in the middle or some other third party.
• The one thing that has changed is that – as of maybe three years ago – in order to get listed now, the provider has to commit to giving us a minimum level of data on at least a quarterly basis, as well as ongoing access for interviews. The reason for this change is that it’s a lot of work to do the initial due diligence, so if there’s no commitment on a provider’s part to help keep the entry up-to-date then it’s just been weeks of work that becomes largely obsolete 12 months later.

The list has always skewed heavily towards better providers and with the last change to our rules for being listed this has trended further in that direction.

One of the reasons why the tables are skewed towards better providers is that many weaker providers have already closed over the past ten years or so.

The other reason is that weaker providers drop out of our due diligence process quickly – if they begin it at all. It is clear to weaker providers that they’re taking a big risk if they want to try and come out looking good after they have opened up to 4thWay as much as we require.

We get quite a few initial calls from, or have initial meetings with, providers that we have our doubts about. They usually don’t want to then proceed with the assessment. We don’t try to put them off, because we’d like to review them and let 4thWay readers get the full details and our candid opinion.

But they’re usually not idiots: very few of the worst providers have been stupid enough to actually go right through our process.

Furthermore, many smaller, more unproven providers could never expect to have the most positive reviews from us, on account of having no record of note for us to say that their performance has been satisfactory. Often, they also are relatively inexperienced too, so they can’t even fall back on credentials.

These providers often choose not to go through our assessment process, because doing so takes a lot of time and resources on their part – which they often just don’t have – or because they want to wait till they can show more history to us and the 4thWay investor community.

I think that providers are also now more frequently taking the view that it’s important to get a 4thWay PLUS Rating in order to look good, so many of them go away knowing that they won’t yet receive it.

You can see a list of about 50 providers not in our comparison table in the FAQ “Why don’t you list LendInvest, easyMoney and some others?” There you are given the reason for each one being out of the comparison tables. It is never because we are excluding them.