Investment clubs

1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25   

15. Starting the processes

After the inaugural meeting the treasurer is in a position to get things going.

1. Opening the bank account

   The Treasurer should open a bank account with the bank agreed by the meeting. The club will need a savings account as well as a current account, unless you find an investor account that pays reasonable interest on values held in an otherwise normal current account.

   Some thought needs to be given to how the bank will accept instructions - will it accept verbal instructions, or emails, or only instructions in hard copy? - and whether this meets your requirements.

   The bank will supply you with a cheque mandate form. Fill it in with the names of those members who have authority to sign Club cheques, and send it to the bank. As a precaution, you might decide that cheques over a certain amount need to be signed by more than one member.

   Tell the bank the day of the month on which it should send the treasurer the monthly statement.

2. Opening an account with a broker

   The choice of broker will have been decided at the Inaugural meeting. The Treasurer should act on that decision and arrange for the broker to take subscription money straight from the club's bank account on an 'ad hoc' or regular basis.

   The broker will set a limit to the amount of unsettled transactions the club can have - that is, the value of shares that the Club can buy without having money in its client account to pay for them. The limit will be quite low to begin with, but once the Club has established a track record the broker may be willing to increase the limit if you ask.

3. Getting off to a good start

   If the broker you are dealing with sets a minimum commission, for example £20, consider waiting until the fund has reached a level where the amount you invest will go above the minimum commission. You don't want to buy £400 of shares and pay £20 commission (5%).

   The higher the joining fee, the quicker you will be able to buy your first share.

   Some members may be happy to invest on an annual basis rather than monthly. This also gives the fund a kick start.

   When you are ready to make the first buying transaction get the secretary to agree a meeting agenda with the chairman and send it out to members.

1. What is an investment club? 2. A simple explanation of how it works 3. Why join an investment club? 4. Deciding on your aims 5. Joining an existing club 6. Preparing to launch a new investment club 7. The draft constitution and rules 8. Drafting the investment strategy 9. Example of an investment strategy 10. Attracting members to your club 11. Preparing for the inaugural meeting 12. The inaugural meeting - appointment of officers 13. The inaugural meeting - key decisions 14. Things to do after the inaugural meeting 15. Starting the processes 16. Running the first meeting 17. Regular meetings - the key to success 18. The cash account 19. The capital account 20. The asset register 21. The annual general meeting 22. Tax 23. Performance measurement 24. Dealing with a member leaving 25. Conclusion

• ProShare Investment Clubs Looseleaf Manual
• The Motley Fool Guide to Investment Clubs
• The Company of Successful Investors