Dozens App

2 Likes

:eyes:

I can’t help thinking that this is the gimmick that’s going to be their downfall. That’s why I didn’t invest.

4 Likes

the 5% p.a. fixed interest bonds are our first proprietary financial product, designed to bear practically no risk.

From their bond selling material https://www.dozens.com/our-5-bonds-everything-you-want-to-know/

image

6 Likes

It seems pretty much risk free to me.

They deposit the bond principal amount plus the interest in a separate account, so should Dozens go bust, the full amount of the bond money should be available.

It looks like they are treating it as a loss leader (much like Freetrade’s free referral shares) to bring more customers onto the platform and eventually cross sell other products.

2 Likes

I’ve not drilled into specifics for dozens, but I’ve seen a company issue fixed term bonds and manage it all from group entities. Loan notes from entity A are administered by entity B who sells to clients and pays coupon/matured money. Entity A passes money to entity C to provide retail loans out at much higher rate than they are paying for coupon through entity B, with a proportion invested in the market, mainly safer govvies to ensure they can pay back end clients if some of the entity C loans default and unable to pass back enough cash to entity A.
Usually you’ll see those kind of companies try to move towards a banking licence so that they can move clients to a fixed term deposit/notice period account then lend out more and have a bankers exemption with regards to certain client money protections… Which I won’t go into.

Offering 5% in current climate… Time to raise an eye brow. If they are loaning out money, then would hope that they aren’t too loose with their assessments on potential loans

3 Likes

Completely agree with you. I think people are making some judgement without understanding the details how this work.

2 Likes

Everyone has got unique selling point like FT is giving free share trade when HL is charging is £12 per trade…all.the starts up burning their shareholders money to attract new customer so if FT can offer free trading why can’t Dozens offer 5% bonds???

Didn’t say they were doing anything wrong… It has just caused a temporary minor facial tick which could be either positive or negative.

At least I didn’t say “We all know that things like mini bonds are safe as houses, unless you are a former TV presenter for Grand Designs”

1 Like

The question for an investor is whether 5% is a sufficient risk premium. This isn’t risk free and so an investor should be compensated for taking this additional risk.

Nationwide offer 5% without risk, which is different.

A bond product was marketed as virtually risk free at LCF when in fact it wasn’t. There was no FSCS protection and investors unknowingly lost -80%. This isn’t a direct comparison of course and there’s no reason to think Dozens is a bad actor. However, I do think Dozens understate the risks involved when marketing this product to savers or new investors.

3 Likes

Can you elaborate on how exactly they understate the “risks” in your view?

Worth noting, this no longer exists:

I believe they were advertising it as risk free during their last crowdfunding, as some kind of clever new way of getting more interest than banks offer (if I remember correctly)

I’m unsure whether this has changed recently, but it wasn’t long ago…

Is Dozens FCSC protected?
Are they FCA regulated?
Is there potential for capital loss?

I don’t think you fully understand the product.

It’s your money + 5%, put in a partner institution, dressed up as bonds because they don’t have a current account license and can’t offer interest.

Literally a marketing gimmick, hence why the issuances are so low.

4 Likes

So with all due respect, basically you’re commenting on risk without doing any diligent research, scrolling up in this thread nor even reading actual dozens marketing docs nor terms & conditions which would answer all those basic questions within mins. Baffling.

For the trust bonds there is protection, of a sort. But as Steve says, it’s a marketing gimmick to draw people in to use them for investing

1 Like

This was meant to be more of an open question (is 5% sufficient for this type of offering?) rather than something overly specific or hostile against Dozens

Happy to be convinced otherwise :slight_smile: but in my mind, however small someone may interpret the risks, there is a level of risk associated this type of product

1 Like

Sorry, I meant it was risky to be an investor in the company, not a customer. 5% that they have to fund as part of a marketing budget is not sustainable.

1 Like

I’m not here to convince as I’m not a shareholder, but as far as the risk-return spectrum goes, there are few red flags :triangular_flag_on_post: here for me to suggest that 5% isn’t commensurate reward for the practically low short term risk. This is effectively easy-access, fully 1-2-1 backed saving. There’s no FSCS protection aka deposit insurance because it isn’t a necessity to quell a bank run because dozens isn’t a bank and thus is unable to lend out your money (it’s ringfenced).

At worst, this is a marketing gimmick.

At best, this is a genuine attempt to reward consumers with inflation beating returns for saving rather than spending.

In between, it’s just a customer acquisition cost.

2 Likes

Are Dozens funding now?

Hi,
I made a small investment in Dozens during their last round in June this year. I’ve not heard any mention of a new funding round yet.

1 Like