I find all of this discussion about withdrawal fees based on
a % distressing.
I understand why clubs imposed a fee for a short-time
member. But, I find a withdrawal fee for a long-time member
unconscionable. I would agree that it is stealing the
member's money, except that it is in the signed agreement.
That said, what member truly understands the impact of the
fee when they are new to investment clubs and eager to begin
this adventure?

Why would a club penalize a long-term member who has
faithfully attended meetings, made regular contributions as
required, prepared their fair share of stock studies, and
perhaps even held officer positions?

Why should the remaining members benefit financially due to
the withdrawal of a member? Perhaps that member is no longer
able to participate for reasons beyond their control -- be
it work or family demands, or health or economic reasons?

Has anyone thought about how the withdrawal of a long-term
member benefits a shorter-term member for no logical reason?
Or how the last member benefits more than any other?

Would any of us knowingly and voluntarily invest in a mutual
fund which required us to forfeit 5% of our money when we
chose to withdraw?

Obviously, I am passionate about this subject and would
encourage any club who still has this fee as a part of their
partnership agreement reconsider it as soon as possible.

Linda Glein

Linda, thank you for expressing so well my own objections to withdrawal fees.

Leo, thank you for articulating so well thoughts on fees.

I wanted to add a few thoughts.

Lack of fees, either late or initiation, are a best practice I believe all clubs should adopt. However, let me share my two clubs' info for how to implement these best practices.

Model Club. As a new club formed in 2008, Model Investment Club of Northern Virginia used a template from BI, and had in the partnership agreement, withdrawal fees which decreased to 0%, based on 6/12/18/24 months as an means to inform/incentivize new members not to enter and exit and cause "churn". To my knowledge, whenever members departed, the fee was not deducted. MICNOVA revised its bylaws and operating procedures in 2013/2014 to remove these fees. As a model club, and for fairness, MICNOVA removed them.

Streetbeaters Club. Founded in 1995, this club had an initiation fee and late fees when I joined in 2008. (It was also using desktop accounting and always transferring cash instead of stock for withdrawals.). It was a process to move the club from Desktop to bivio, as well as to evolve from providing cash to departing members. We do have a $5 late fee for monthly contributions, but since we all autodebit, not an issue. We have a $75 initiation fee. I believe the thinking on that is that club members felt there should be an equality of cost for the equipment purchase. (We purchased a laptop and projector for the club's use.). My personal belief is that a club should be educational in nature, and collegial (but professional) in people interactions, and fees detract from that. I also think that a membership to BI, initial club contribution and monthly Debit are enough of an upfront investment, that adding an initiation fee is a disincentive to joining. I believe this club will evolve away from fees eventually. (I will use this discussion as an agenda item.). As an aside, this club uses ETrade which has given our club a Debit card, which we use twice a year, paying for registered/return/receipt for the federal return and the annual bivio fee. We don't really have other expenses (except the projector, laptop and an extension cord described above). The club keeps no petty cash.

Be Well. Irina Sent from my iPad

> On Mar 5, 2017, at 10:31 PM, Linda Glein <linda.glein@gmail.com> wrote:
>
> I find all of this discussion about withdrawal fees based on
> a % distressing.
> I understand why clubs imposed a fee for a short-time
> member. But, I find a withdrawal fee for a long-time member
> unconscionable. I would agree that it is stealing the
> member's money, except that it is in the signed agreement.
> That said, what member truly understands the impact of the
> fee when they are new to investment clubs and eager to begin
> this adventure?
>
> Why would a club penalize a long-term member who has
> faithfully attended meetings, made regular contributions as
> required, prepared their fair share of stock studies, and
> perhaps even held officer positions?
>
> Why should the remaining members benefit financially due to
> the withdrawal of a member? Perhaps that member is no longer
> able to participate for reasons beyond their control -- be
> it work or family demands, or health or economic reasons?
>
> Has anyone thought about how the withdrawal of a long-term
> member benefits a shorter-term member for no logical reason?
> Or how the last member benefits more than any other?
>
> Would any of us knowingly and voluntarily invest in a mutual
> fund which required us to forfeit 5% of our money when we
> chose to withdraw?
>
> Obviously, I am passionate about this subject and would
> encourage any club who still has this fee as a part of their
> partnership agreement reconsider it as soon as possible.
>
> Linda Glein