withdrawal fee

Deannie Rule on

What is the average fee charged a member who withdraws?

I believe our club may hold the record, at 15%. I was not
around for the chartering of this club and don't know how
they hit upon that fee but i recently visited with a woman
from another club that has a 3% withdrawal fee.

Our withdrawing members have been our most lucrative
investments!

could be why most of us are planning on our investment club
balances being applied to our funeral expenses.

deannie

iras1 on

The BI model Partnership Agreement calls for 3%, but many clubs nowadays only charge the actual cost to process the withdrawal. The 3% guideline dates back to the days before discount brokers when it could cost several hundred dollars to sell or transfer shares.

I'm amazed you can get anyone to join with a 15% withdrawal fee.

Ira Smilovitz

Join me at InvestEd 2010

Investor Education at Its Best^TM
Baltimore, MD August 6 - 8, 2010
http://www.investor-education2010.org/

In a message dated 02/22/10 10:24:38 Eastern Standard Time, mcrule@bivio.com writes:

What is the average fee charged a member who withdraws?

I believe our club may hold the record, at 15%. I was not
around for the chartering of this club and don't know how
they hit upon that fee but i recently visited with a woman
from another club that has a 3% withdrawal fee.

Our withdrawing members have been our most lucrative
investments!

could be why most of us are planning on our investment club
balances being applied to our funeral expenses.

Rip West on

I agree with Ira's analysis of the withdrawal fee. 3% may have been appropriate years ago, when brokers' commissions were much larger, but I can find no justification for such a charge in today's world. 15% is out of the question. I agree that it is your best money maker. I see no need for a withdrawal fee if clubs would adhere to the rule of paying off members with appreciated stocks.

Rip West
Saint Paul, MN

Arthur Klages on

For what it's worth, our club has been around for a long time

Years ago, when brokers charged 2%-3% commission, our withdrawal fee was 1
1/2%

After on-line brokerage began, we reduced the charge to 1/2%, where is
stands today.

Arthur Klages, Treas.
Senior Investment Club LLC
Greensboro NC

-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Deannie
Rule
Sent: Monday, February 22, 2010 10:24 AM
To: club_cafe@bivio.com
Subject: club_cafe: withdrawal fee

What is the average fee charged a member who withdraws?

I believe our club may hold the record, at 15%. I was not
around for the chartering of this club and don't know how
they hit upon that fee but i recently visited with a woman
from another club that has a 3% withdrawal fee.

Our withdrawing members have been our most lucrative
investments!

could be why most of us are planning on our investment club
balances being applied to our funeral expenses.

deannie

Lynn Ostrem on

The Crow River club has no fee, but if we have to sell a stock or two to payoff a member, they are charged the broker fee, which for us is $6.95 per trade. Peanuts.

The bad thing about withdrawal fees being a percentage is, over time members are penalized as their capital account grows. It should be the other way.

I'd like to suggest something for Deanne's club. Going from 15% to nothing could cause a mass exodus as it may be what's holding a lot of members there. In her situation, it might be smarter to propose an amendment to the bylaws where the % withdrawal is reduced by 2% or 3% per year until it's gone. Something to think about.

Lynn Ostrem

Leo Cardillo on

We have no withdrawal fee for "normal" circumstances, including death.

We simply return to the member what his share is worth at the requested
withdrawal date and in accordance with our Articles of Agreement.

Our club has been in business for more than 50 years. Twenty members, about
$330,000 in assets, and the average member stays more than twenty years,
often until he passes.

15%! That is a great return on your club's money! Seems AWFULLY high to me.

Best Regards,

Leo

-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Deannie
Rule
Sent: Monday, February 22, 2010 10:24 AM
To: club_cafe@bivio.com
Subject: club_cafe: withdrawal fee

What is the average fee charged a member who withdraws?

I believe our club may hold the record, at 15%. I was not around for the
chartering of this club and don't know how they hit upon that fee but i
recently visited with a woman from another club that has a 3% withdrawal
fee.

Our withdrawing members have been our most lucrative investments!

could be why most of us are planning on our investment club balances being
applied to our funeral expenses.

deannie

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