Every time we make a change in our club, the broker needs
signatures from all members. As we have 30 members living
all over the area, it is not easy at all to fulfull this
requirement. Is there a simple way to handle this problem?
The only time we hear from some members is when we receive
their check. If we have to mail a form from person to
person, it is likely to get lost sitting on someone's desk.
Any help you can offer would be greatly appreciated. Thanks
in advance.

Deidre Ross for
Investment Opportunities Unlimited Club

Deidre Ross wrote:
> Every time we make a change in our club, the broker needs
> signatures from all members. As we have 30 members living
> all over the area, it is not easy at all to fulfull this
> requirement. Is there a simple way to handle this problem?
> The only time we hear from some members is when we receive
> their check. If we have to mail a form from person to
> person, it is likely to get lost sitting on someone's desk.
> Any help you can offer would be greatly appreciated. Thanks
> in advance.
>
> Deidre Ross for
> Investment Opportunities Unlimited Club
Have you guys ever looked at "foliofn.com". $149.00/year
brokerage set fee and virtually unlimited stock trades for a
full year. Really neat.
Sounds like you need to simply your organization. Why not
have a small investment committee to handle your
broker-stuff? Or maybe just change brokers..... here again
Foliofn.
All internet based. We love it.
Larry Kenimer
GISMO (Good Investors Stock Market Organization since
2/2001).

Sounds like you have too many members, and some who don't
attend meetings. They mail their check?? Time to clean
house. You only want active members.

Who says your broker has to know how many partners are in
your club? Sign a separate agreement using only officers and
present them with that. Since only two or three members
should be eligible to execute trades, requiring signatures
of all members should not be necessary. In fact, I think
NAIC ran an article about this topic within the past couple
years. Can't remember all the details, though.

Bob
Lunch Money Investment Club

Deidre Ross wrote:
> Every time we make a change in our club, the broker needs
> signatures from all members. As we have 30 members living
> all over the area, it is not easy at all to fulfull this
> requirement. Is there a simple way to handle this problem?
> The only time we hear from some members is when we receive
> their check. If we have to mail a form from person to
> person, it is likely to get lost sitting on someone's desk.
> Any help you can offer would be greatly appreciated. Thanks
> in advance.
>
> Deidre Ross for
> Investment Opportunities Unlimited Club

Deidre,

I absolutely agree with Bob. First, you need to clean house. You do that
by proposing changes to your bylaws that require members to attend at least
75% of all meetings or face automatic withdrawal. Also add a participation
clause. Once these changes have been voted and accepted, send a letter to
that effect to ALL members in the club. You will surely have fallout, but
what a great time to clean up your portfolio!

Remember that it's not the AMOUNT of money you have in your portfolio, but
the return you make off of what you currently have! You can always transfer
stocks to those who leave, and minimize the club's capital gains.

Next, you need to get everyone participating at every meeting. A
requirement to show up won't keep them there for long if the meetings aren't
interesting. Assign a steering committee to devise a plan for the next 6
monthly meetings! Rotate eduation topics, nake sure there is a new stock
presented, play games with small door prizes, bring food! The clubs that
survive make their meetings SO interesting that people come out of fear they
will miss something!!

I have always said I'd rather be in a club with 5-6 hard working members,
than in a club of 20 where only 5-6 do all the work! DUMP the people who
are not willing to work!

Finally, while I won't lead you to go against your agreement with your
broker, I agree with Bob, here. Our original partnership agreement has the
original founders. We have a separate page for everyone else. Each page
has room for 20 names and socials. As people leave, we draw a line through
their name and the date of the meeting at which their resignation was
accepted. Then we add others on at the bottom. We have NEVER sent the
state, the bank, or the broker updated copies of anything! The only time
that may become a requirement is when a new treasurer takes over that wasn't
on the original agreement. Even then, my broker never noticed!

Get tough! Get your club cleaned up! And you'll be very happy you did.

Lynn Ostrem, President
garbagecop@foxinternet.net
Crow River Investment Club
www.bivio.com/crowriver

Here is the text from BI magazine, October 2001, regarding
signatures:

Dear Editor:

Several months ago, our club tried to transfer stock from
our GE dividend reinvestment account to some departing
members. It has become so involved that we decided to close
out all of our reinvestment accounts and put everything with
our broker.

We must send copies of our partnership agreement (five pages
long) to each company plus the medallion stamp from the bank
for each one, plus the person sending must sign herself as
“partner” and must be the same person who receives the
quarterly statements. Of course, one would never know these
requirements unless you called the transfer agents and asked
for specific instructions. Even then we received conflicting
answers. We have also found that our yearly audits become
unduly lengthy when verifying all of the charges made on
many of these accounts. Percentage wise, we are paying more
commission on a small reinvestment in some stocks, like
McDonald's, than we would be paying our online broker for a
purchase.

Our club has been going strong for 14 years, and until
recently we liked the convenience of dividend reinvestment
plans. Now, however, I would warn any investment club to
beware of them. Our three departing members have been
waiting six months for that GE stock, and it may be a couple
more months if someone at their agency decides that we
haven't jumped through enough hoops yet.
Mari Harrer
via e-mail

We are sorry you experienced so much difficulty, but there’s
a good chance it could have been avoided. Years ago NAIC
worked with the Securities Transfer Association to establish
a rule that frees most clubs from having such difficulties
in selling or transferring securities. Rule 3.0610 permits
clubs operating as partnerships to transfer securities
directly into and out of the club’s name with the signature
of only one partner. Normally there is no need for any
supporting papers, which should hold true for DRIP transfers
just as much as securities purchased through brokerage
firms. According to NAIC’s Official Guide (page 172),
endorsement of the security certificates or transfer form
should read, “ABC Investment Club, a partnership, Jane Any
Member, partner.”

Clubs that invest through DRIPs might check with their plan
sponsors or transfer agents ahead of time to make sure such
unnecessary complications can be avoided.

Good luck.

Bob