Stockbrokers for Investment Clubs Sep’25

johncalvert

Arthur_Pewty said:

We have today formed a limited company for our investment club.  Didn't take too long and cost just £50 at companies house.  Now need to register with HMRC for a UTR, get an LEI and apply to AJ Bell for a dealing account.  AJ Bell have confirmed they will support our application. Will report on progress.

How did you get on?  We are still in the process of thinking about a Limited Company.  Did you form a company limited by shares, or limited by guarantee?

lizardbroker

Morning all. If anybody is still on this thread I am looking at starting an 'investment club'. I emphasise 'looking at starting'. Whether or not I continue to pursue will depend on some further investigations such as the LEI process etc. And whether or not there is a worthwhile ROI where I includes non-financial resource requirements. At this point in time I my thinking is there is a question of scale, time frame, vision, values, etc. etc. It seems to me, based historic and recent experience, the primary risk with an investment club is factors such as lack of structure, no clear plan, no long term vision, lack of discipline, etc. Basically the same risk as there is to an individual retail investor only amplified when there is an absence of collective discipline etc. I'm interested in what experienced clubs might think re the above. In principle I don't see why an investment club should not work given it is, simply put, a fund managed by it's members. As long as the club adheres to successful fund management principles I can't see a problematic downside - with the usual caveat of all other things being equal. Furthermore, I can see a value in having a 'consortium' of investment clubs to share good practice, knowledge, experience, etc. etc. - caveat, in principle. I am aware of the risks of clubs and consortiums and so on. In my experience the risks seem to come from: a) lack of discipline and structure; weak leadership; authority being vested in administrative individuals/bodies rather than in the membership. Comments?

lizardbroker

why do IBKR need to ask for LEIs, UTRs and membership data

To protect themselves. The bureaucracy for any sort of investment platform etc. is phenomenal. The over-regulation is even worse. UK financial regulation regarding individual/retail investors is typically a knee jerk reaction to over-compensate for the lack of knowledge the regulators have in the first instance. That having been said there is a distinct lack of basic understanding of investment by the UK 'public' compared to, say, the US, China, and other nations/countries.

findthetruth

Further to my post on changing to Trading 212…
We had our first meeting this week. Each member put £1500 into their own individual a/c, ISA or not, and £50/m thereafter.
We decided we would initially have £200 per trade. When we had agreed on 4 shares, we all, simultaneously, placed the trades on our own devices, to be actioned when the markets opened the next day. This worked well.

The negatives are that, if members do not act at the same time, then their portfolios will diverge a lot over time, making future trades problematic. If anyone goes rogue, then there is no point in them being a member.
As treasurer, I no longer am going to calculate members’ Capital Gains, as they will be different from the model, and the ability of the system to easily increase or decrease share allocations, will make the maths tiresome anyway. For ISAs they are irrelevant.
It was fun, which is why we do it. It’s a club without any legal identity, with no formal membership or rules. We haven’t thought how to deal with new members yet.

poseidon1

findthetruth said:

Further to my post on changing to Trading 212…
We had our first meeting this week. Each member put £1500 into their own individual a/c, ISA or not, and £50/m thereafter.
We decided we would initially have £200 per trade. When we had agreed on 4 shares, we all, simultaneously, placed the trades on our own devices, to be actioned when the markets opened the next day. This worked well.

The negatives are that, if members do not act at the same time, then their portfolios will diverge a lot over time, making future trades problematic. If anyone goes rogue, then there is no point in them being a member.
As treasurer, I no longer am going to calculate members’ Capital Gains, as they will be different from the model, and the ability of the system to easily increase or decrease share allocations, will make the maths tiresome anyway. For ISAs they are irrelevant.
It was fun, which is why we do it. It’s a club without any legal identity, with no formal membership or rules. We haven’t thought how to deal with new members yet.

So no longer an investment club by any meaningful definition then?

findthetruth

To poseidon1
That is correct. But so far it feels the same. And it is fun so far. If any substantial online broker decides to do Investment Clubs again, we may still have our group intact, and we can come back.

ShareClubber

We have successfully opened an account with GHC. It took less than a week after we submitted the paperwork. We have completed our first trades by phone. All went very smoothly. So far so good! 😁

findthetruth

CFM advised a few days ago, that they have now introduced online trading.

For now, we will continue with our Trading 212 simulation.

Arthur_Pewty

Just stick to the idea of an Investment Club and avoid all distractions like Private Limited Companies and "informal" arrangements with all "members" buying a common portfolio etc.

None of these will work for the long term.

The first because it will be very difficult to find members to consistently do all the admin required.

The second because it will prove impossible to keep all members' portfolios the same beyond the first investment or two.

Just keep focused on finding a stockbroker who will deal with Investment Clubs [they are out there and we currently use two]

Get a hold of a copy of "The Manual" produced by Proshare and stick to its recommendations - we have been using it since 1998 and it works very well.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81962315#Comment_81962315

I find your post curious in that you apparently proposed and then subsequently set up a Private Limited Company per your post on 13 November 2025.

Are we to understand your club has had a rethink, abandoned the Limited Company and returned to club status after realising the considerable hassle and tax inefficiency inherent with a Limited Company structure?

For the enlightenment of others, who are the two stockbroker firms you now use for the club and how competitive are they with regard to dealing and custody fees?