The Times quotes Charlotte Hill on the history and decline of Investment Clubs
min readInvestment Clubs are groups of investors that pool their money and knowledge to invest in the stock market. The number of members cannot exceed 20, and they usually pay a buy-in to join and then a monthly investment, which goes into a collective pot.
Clubs must have a constitution and rules and a secretary who is responsible for keeping records of members’ income and gains. Anything earned through the club will be treated as individual income, so it is taxed on that basis.
As reported by The Sunday Times, Investment Clubs started appearing in noticeable numbers in the UK in the late 1950s, with more than 2,000 created by the mid-1960s. However, the publication notes that they are currently on the decline and that many "are now scrambling to find a new home from within an ever-shrinking pool of platforms and brokers that will host them".
Charlotte Hill, Partner in our Financial Services Regulation & Funds team, gives her view on the decline in Investment Clubs in an interview with The Sunday Times:
I think that the decline is largely because of the rise of technology. Rather than getting a load of people together, setting up a cumbersome partnership and having to do returns and all the rest of it, you can now do it all on your phone without it costing much.
"I think for anybody wanting to invest, there’s not really much point in investing in anything else until you have used up your Isa and your tax-free savings allowances.
Read the full article in The Sunday Times here (subscription required).
