Premium Bond Syndicate Agreement

andybrock

Does anybody have a written agreement in place for a premium bond syndicate?
Looking to put something into writing and could do with some advice to what it should contain.

Thanks.:beer:

dawyldthing

Joining money together with anyone else usually ends up in heartache. Wouldn't it be better for you all to hold them in your own names and if you win have an unwritten rule it will be shared out or there abouts?

andybrock

Unfortunately this isn't an option and one person will be managing the bonds.

innovate

You cannot hold a Premium Bond account as a syndicate. It must be the account of an individual.

Why would you want a syndicate, out of interest?

andybrock

I fully understand the regulations regarding Premium Bonds-ie can only be held by an individual
Many people who form a premium bond syndicate have one person managing the fund and a written agreement in place.
This is what I am looking for.

innovate

What is there to manage with Premium Bonds? I have 30,000 of them and they don't need any more management than a plain savings account. Would you also have syndicates for savings accounts?

andybrock

Its about making a declaration of trust (i.e. the creation of a bare trust) confirming your common understanding that each syndicate member enjoys an equal beneficial ownership of the bonds, and an equal entitlement to any prizes.

Otherwise the person who manages the fund can just pocket the money.

G_M

By 'managing the premium bonds' the OP clearly means being the nominated person in whose name they are held.

So far as NSI are concerned, PBs cannot be held by a syndicate (unlike the National Lottery I believe).

But that does not mean a group of people cannot make an agreement that any prizes from a defined number of bonds will be shared equally.

If trust is not an issue, a clear statement listing the bonds, and the people, and signed by all, should suffice.

If each person in the group held, say £1000 worth of bonds, then the trust would be mutual (rather than relying on one person to collect the money and invest it all in his name on the group's behalf).

Alternatively you could get a solicitor to draw up a Deed to make it more formal.

andybrock

Thanks GM.
Confirmed exactly what I thought.
Just wondered whether there was anything out there available.

Sampong

Forming a syndicate to increase your holding won't increase your expected return. Each premium bond has an equeal chance of winning, so "your" bonds have as much chance of winning as anyone else in the "syndicate".

Of course with a larger holding (because of the syndicate) it increases the chances if a win more often, but this is offset by the fact that you have to divide the prizes between all members.

In fact, by forming a syndicate, you increase your risk of problems, for example if there is a problem with the agreement and the winning member decides to keep the funds. Technically speaking, that has the potential to reduce your expected return from the investment.

You can't leverage this investment.

andybrock

Sampong wrote: »

Forming a syndicate to increase your holding won't increase your expected return. Each premium bond has an equeal chance of winning, so "your" bonds have as much chance of winning as anyone else in the "syndicate".

Of course with a larger holding (because of the syndicate) it increases the chances if a win more often, but this is offset by the fact that you have to divide the prizes between all members.

In fact, by forming a syndicate, you increase your risk of problems, for example if there is a problem with the agreement and the winning member decides to keep the funds. Technically speaking, that has the potential to reduce your expected return from the investment.

You can't leverage this investment.

That's why a suitable agreement is necessary.;)