[John Calvert]

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.

[John Calvert]

Can I throw something else in here. We have now sold all our stocks and moved them into our associated bank account. We will make a decision next week as to whether to wind up, go with one of the stockbrokers mentioned on this forum……or form a limited company.
Has anyone else thought about this approach? Family Investment companies are well established, and apparently you can also form Friendship Investment companies. It is easy and inexpensive to set up a company. Once set up the administration is similar to that for an investment club, but the company bears responsibility for income tax and capital gains tax. There will be some extra administration as annual returns will have to be completed, etc, which I don’t think will be too onerous, having completed many in the past. The other extra administration required would be, that as monthly subscriptions come in, and new shares are issued, companies house records need to be updated. AJ Bell does accept Limited Company Dealing Accounts, with the same charges as for individual accounts, so cost effective.
Your thoughts and comments would be much appreciated.

[John Calvert]

Well, it’s over with Interactive Brokers for us. I received an email from them this morning stating “We require investment clubs to have a legal personality, an UTR and LEI. If you don’t have a legal personality, the applicant is going to be rejected.”
This was closely followed by a rejection email.
I guess this is because an Investment Club is a loose association of friends/investors who each take responsibility for their own tax affairs, so does not comply.
So we now have to find another broker, or call it a day. Just a shame it took them three weeks to arrive at this decision.

[John Calvert]

A brief update. I’m still not able to tell you we have been accepted by Interactive Brokers.

Position is I have answered all the questions put to me to satisfy the new business team. Having satisfied them the application has been sent for approval, which takes 3-4 days I’m told. So, expecting an answer, one way or the other Monday or Tuesday.

[John Calvert]

Thought we were there, but no. Today’s question: “Please provide details on the membership process including how new prospecting members become aware of the investment club and the specific criteria needed to be accepted as a member.” We will keep trying.

[John Calvert]

Morning everyone. I’ve been hanging back, hoping I’d be able to tell you we had succeeded in opening an account with IBKR, but we are still not quite there yet. Problem is they are busy, so they ask a question, we reply, then it can be two days before that’s looked at, then another question, etc. so it takes time. Do persevere.
So, right now we have answered all their questions, ticked all the boxes, provided all the information, and got the green light on Friday that we could fund the account, though the application is still awaiting final approval, so I’m hopeful.
We had to provide constitution, proof of authority to open an account, photo ID of officers, full list of members with percentage held by each and complete a W8-BEN.
Nothing happens over the week-end so I’m hoping to get final approval Monday or Tuesday, when I’ll report back either way.

[John Calvert]

CEO Gerry Perez of IBKR has confirmed that they will accept Investment Clubs.
https://www.interactivebrokers.eu/campus/podcasts/ibkr-podcasts/ibkr-unfolded-the-swiss-army-knife-of-investment-clubs/
As for our Account Application, I’m still struggling. Having thought I was there they have now come back and said there was an error on my original application, (without telling me what it was), and questioning proof of ownership. So, I’ll get back to them to find out what I need to do, and post here in due course.
Anyone else succeeded in opening an account with IBKR yet?

[John Calvert]

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.

[John Calvert]

Our Investment Club is going through the process of applying for an account with Interactive Brokers (IBKR). I have to say it is quite tortuous, and I wouldn’t have been able to do it without help from Interactive Brokers sales staff. As for an LEI, I stated we didn’t have one, and the application offers that Interactive Brokers will apply on our behalf. Watch this space. So, we have reached the stage where our application for an account is in, and now waiting approval. No doubt there will be more questions along the way, but I will keep you informed of progress.

[John Calvert]

Richard,
Well done. Looks like you may have provided us all with a solution. An LEI is not difficult to obtain (Costs £45 per year if you buy 3 years), as long as an investment club qualifies to have one.
If you decide to go ahead do please keep us all updated, so we can follow, if it works out.
Best wishes,
John Calvert

[John Calvert]

Morning Mark,

Thank you for your efforts. Our club doesn’t have an LEI, but you have set me thinking.

We created a trust some years ago and transferred cash from our other investments into it, then opened an account in the trust’s name with a stockbroker ( iDealing in our case). We did have to obtain an LEI, but the account worked exactly the same as a private one.

I’m just wondering if we could convert the Investment Club into a Discretionary Trust, for example, or a Limited Company, and open either a trust account or a company account.

Any thoughts, anyone?

John

PS When I tried Interactive Brokers I got a NO for investment club accounts, but I could try again, or maybe Rich is already on it.

[John Calvert]

Thanks Richard & Sandy. Sorry If I got the FCA entry wrong. I must not have searched the name correctly.

[John Calvert]

Sandy,
I’ve had a look at CFM and would not be happy to use them. They are tiny, literally a one man band with a turnover last year of only £635,000, and not registered with the Financial Conduct Authority. Look the up on the FCA website and Companies House. Personally I’m hoping that AJ Bell might come to our rescue.
John

[John Calvert]

Had the same email from AJ Bell this morning. So, everyone, please do contact them, as the more that do, the better the chance AJ Bell will take us on.

[John Calvert]

Also had a no from Halifax, Redmayne Bentley and Fidelity. Anything you can do, Mark, would be much appreciated.

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