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Stockbrokers for Investment Clubs Sep’25

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Comments

  • The person I spoke to at IBKR said that they didn't deal with investment clubs at all!
    Yes, that's what they told me too!! Gone with CFM. 
  • Our thanks to everyone re IBKR. It is most extraordinary isn’t it? We too are unwilling to provide our personal UTRs. Also Pilling is too expensive for us.
    All eyes on John Calvert. IBKR is our last chance.
  • jimjames
    jimjames Posts: 18,839 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 26 September at 8:32AM
    I think this is the end of the line for investment club accounts in the UK. 
    It might be for actually pooling money but any reason why it can't continue with members sharing tips and buying the shares themselves? Then means no issues for opening accounts as anyone can do so in their own name. I've been an investor for 30+ years but never part of a formal club so haven't understood the attraction of putting money into a pot and don't do Christmas clubs or the like either. It seems like an opportunity to reinvent and work differently in future to allow members to take advantage of their tax allowances and maybe have discussion about the tax strategies as well as the investments. You can still discuss the tips about what to buy and each replicating it. With brokers dealing for free there isn't any extra trading cost for investing £50 compared to £500 and all will be in your own ISA or SIPP.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • johncalvert
    johncalvert Posts: 14 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    Update.  We are making progress.  This morning I've been asked to fund the account to obtain an LEI.  They have also asked for a full list of members, (so far only got my details), and proof of ownership.  So, not over the finish line yet, but it's looking more hopeful.
  • phlebas192
    phlebas192 Posts: 93 Forumite
    Second Anniversary 10 Posts Name Dropper
    jimjames said:
    I think this is the end of the line for investment club accounts in the UK. 
    It might be for actually pooling money but any reason why it can't continue with members sharing tips and buying the shares themselves? Then means no issues for opening accounts as anyone can do so in their own name. I've been an investor for 30+ years but never part of a formal club so haven't understood the attraction of putting money into a pot and don't do Christmas clubs or the like either. It seems like an opportunity to reinvent and work differently in future to allow members to take advantage of their tax allowances and maybe have discussion about the tax strategies as well as the investments. You can still discuss the tips about what to buy and each replicating it. With brokers dealing for free there isn't any extra trading cost for investing £50 compared to £500 and all will be in your own ISA or SIPP.
    ICs became popular in the late 90s at a time when trading costs were quite high, especially for small amounts, so it did make sense to pool funds. Not so much now, as you say. 
    Being part of a group is still a benefit in that it helps promote discipline. If you are collectively agreeing on purchases and sales and the treasurer is the one making them then there's much less chance to panic or think "that's too risky for me" and not even purchase in the first place. For novice investors that's a real help. Even quite experienced ones can have a mental block when it comes to selling, especially at a loss. 
    Lastly, when you've been part of a group for 25+ years, especially if there's a stable core membership, then it is a wrench to have to say goodbye to it. Yes, we can - and hopefully will - continue as an informal group agreeing on transactions which we then conduct individually but I suspect that with no constitutional requirment for regular meetings, formal agenda etc that it will gradually peter out.
    That said, we have made the decision to call it a day. Financially it does make sense since operating an active strategy outside of a tax shelter is no longer remotely efficient. Members of an IC are taxed individually so can make full use of their own allowances, but these are so small now that it's easy to end up paying dividend tax and CGT with even quite modest profits.
  • Thanks to John Calvert 
    Thats good. I still worry about the UTR though. Will they ask for everybody’s eventually or was it just to get you into the process?

  • johncalvert
    johncalvert Posts: 14 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    Findthetruth.  I'm not sure what they will ask for eventually.  I've had to provide a list of all members, their names, holdings and percentage ownership of the club.  Not yet been asked for addresses, etc, but I guess that will happen next.  Also had to prove authority to open account, so I've provided minutes of AGM re-electing officers, and minutes of last week's meeting when we voted to open an account.  I await their decision, and will update next week.
  • Dorcots
    Dorcots Posts: 12 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    edited 27 September at 10:04AM
    There is an IBKR web page:
    https://www.interactivebrokers.eu/campus/podcasts/ibkr-podcasts/ibkr-unfolded-the-swiss-army-knife-of-investment-clubs/ (dated 2 September 2025) that promotes their support for investment clubs. Clearly they have a management strategy to host investment club accounts in the UK.
  • Dorcots
    Dorcots Posts: 12 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    edited 27 September at 11:51AM
    ......Got stuck on the UTR as registering with HMRC as an unincorporated association would have meant paying corporation tax.......
    If you read their Internal Manual page CG40650, HMRC state that "Investment clubs are not normally charged to Corporation Tax as they do not fall within the company tax provisions."
  • Dorcots
    Dorcots Posts: 12 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    edited 27 September at 11:51AM
    ...I've had to provide a list of all members, their names, holdings and percentage ownership of the club....  
    Talking to HMRC two weeks ago, I was lead to believe that, since 2013 and unless they specifically ask, HMRC do not require any information from investment clubs. See also their Internal Manual page CG20600. Also see CG40650.
    So why do IBKR need to ask for LEIs, UTRs and membership data? This seems to be a hangover from the pre-2013 era. Can IBKR be persuaded to change their form to not request this information for a UK investment club?
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