After 26 years of socialising and stock-picking, the Jester Investors club, set up in 1999 by a group of enterprising female professionals, is set to liquidate its £90,000 portfolio.
But the reason behind the move is not a falling out over strategy, nor even panic about the global economy. Instead, as club chairman Victoria Provis explains, Interactive Investor, the DIY investment platform through which the West London group manages its portfolio, has said it no longer wants Jester Investors – or any other investment clubs – as clients.
These associations of colleagues, friends or neighbours are also not welcome at rival platforms such as AJ Bell and Hargreaves Lansdown, with more platforms expected to follow suit.
Interactive Investor has told the club that it would rather focus on its other investment products such as Isas and self-invested personal pensions (Sipps).
But the decision threatens to undermine Chancellor Rachel Reeves’ plan to encourage Britons to put more of their savings into shares, with an emphasis on buying British companies. It may also spell the end for investment clubs, which boomed in the 1990s but have dwindled in number in response to tax changes and as investing online has become easier.
The abrupt closure order came despite the collective wisdom of the Jester club having so far paid off for its members.
Shunned: These investment associations of colleagues, friends or neighbours are now not welcome at investment platforms
They had used their monthly contributions to the club’s pot of money to back top-performers such as Rolls-Royce and Nvidia. But Interactive Investor has put paid to the fun and profit-making.
Provis said: ‘In late August we received a horrible letter out of the blue from Interactive Investor. It said that, following a review, our club’s trading account would be closed on October 27.’
Provis, once a top headhunter who now has directorships at arts organisations, said the decision to wind up the club was taken with considerable regret.
Share picker: Victoria Provis
She added: ‘Over the years, the club’s membership has ranged from seven to 12 people, mostly women. We’re a mix of professionals and small business owners. Together we have had some wonderful discussions over which shares to buy, sell and hold.
‘Some of our choices turned out to be duds, but our final portfolio contains some gems.’
Provis said the club also served a valuable social purpose, adding: ‘We each took it in turn to host.
‘But we are also keen investors and have learnt so much. You take better decisions together.’
A spokesman for Interactive Investor acknowledged the role investment clubs play in people’s lives, adding: ‘We recognise – and very much advocate – that discussion, debate, and community can be one of the most rewarding parts of investing. We are actively offering other routes to support this through our online ii Community, a hugely popular way for investors to share ideas about any number of topics or investing strategies.’
Other clubs are finding themselves under threat as a result of anti-money laundering checks.
The shareholder advocacy group ShareSoc said other platforms were refusing to take on investment clubs as clients because of Politically Exposed Person (PEP) legislation. These are laws which state that financial companies must subject individuals in public office to greater scrutiny since they are seen to represent a higher risk of laundering money gained by bribery and corruption.
ShareSoc said one platform had ‘declined’ to take on investment clubs arguing each member had to be vetted under anti-money laundering and PEP rules every year.
While the process is automated for individual accounts, the platform said the checks would need to be done manually for club members and would result in ‘excessive costs and complications’.
The letter to Jester Investors, which has been seen by The Mail on Sunday, did not cite PEP as a reason behind the closure. Aberdeen, Interactive Investor’s parent, also said there was no link.
ShareSoc director Amit Vedhara noted that US firms such as Interactive Brokers still accept investment clubs as clients.
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