Closing club
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What if we all made our own General Partnerships (individual investment clubs)? Sort of asked tongue in cheek, but why not? Would be much cheaper. Jersey Stu On Tue, Aug 12, 2025 at 1:47â¯PM ira smilovitz via bivio.com <user*2883400001@bivio.com> wrote: > > Schwab is on their own island here. First, we are an LLC investment club that transitioned to Schwab from TDAmeritrade. When they told us we couldn't execute in-kind transfers nor could we transfer cash, we moved to Fidelity. > > Second, the idea of opening an individual account for each member of the LLC makes no sense unless Schwab is now saying that you can make transfers from the (LLC) club to the members. > > As others have noted, forming an LLC brings additional costs as most, if not all, states require annual payments to maintain legal status. > > Ira Smilovitz > > > > On Tue, Aug 12, 2025 at 9:33â¯AM Administrator Account via bivio.com <user*40471900001@bivio.com> wrote: >> >> We have been told by Schwab that their operational rules >> will not allow an in-kind transfer from a general >> partnership. Based on some research we also expect that that >> same policy is about to be enforced by Fidelity. >> Schwab has indicated the solution is for the club to change >> from a General Partnership to an LLC, opening an individual >> account for each member. Nobody has had any specific >> information of why this is happening but as a retired broker >> I expect FINRA has their hands in this one for some >> regulatory reason. Our club has approved a move from a >> general partnership to an LLC to prepare for the eventuality >> that members who wish to leave will want an in-kind >> distribution versus cash. The definition of a partnership is âtwo or more peopleâ Sent from my iPhone > On Aug 12, 2025, at 3:55â¯PM, Stuart Weissman via bivio.com <user*15236200001@bivio.com> wrote: > > What if we all made our own General Partnerships (individual > investment clubs)? Sort of asked tongue in cheek, but why not? Would > be much cheaper. > > Jersey Stu > >> On Tue, Aug 12, 2025 at 1:47â¯PM ira smilovitz via bivio.com >> <user*2883400001@bivio.com> wrote: >> >> Schwab is on their own island here. First, we are an LLC investment club that transitioned to Schwab from TDAmeritrade. When they told us we couldn't execute in-kind transfers nor could we transfer cash, we moved to Fidelity. >> >> Second, the idea of opening an individual account for each member of the LLC makes no sense unless Schwab is now saying that you can make transfers from the (LLC) club to the members. >> >> As others have noted, forming an LLC brings additional costs as most, if not all, states require annual payments to maintain legal status. >> >> Ira Smilovitz >> >> >> >>> On Tue, Aug 12, 2025 at 9:33â¯AM Administrator Account via bivio.com <user*40471900001@bivio.com> wrote: >>> >>> We have been told by Schwab that their operational rules >>> will not allow an in-kind transfer from a general >>> partnership. Based on some research we also expect that that >>> same policy is about to be enforced by Fidelity. >>> Schwab has indicated the solution is for the club to change >>> from a General Partnership to an LLC, opening an individual >>> account for each member. Nobody has had any specific >>> information of why this is happening but as a retired broker >>> I expect FINRA has their hands in this one for some >>> regulatory reason. Our club has approved a move from a >>> general partnership to an LLC to prepare for the eventuality >>> that members who wish to leave will want an in-kind >>> distribution versus cash. Just stopped by Fidelity to ask about this situation; nobody in the local office knew anything about affecting Partnerships. The definition of a partnership is "two or more people" Dan Cohn 404 862 5640 The message posted by "Administrator Account 08/12/2025" has concerning information for clubs using Schwab and Fidelity. At first glance this appears to be someone associated with Bivio, but I am not sure that is the case. May I respectfully ask who "Administrator Account" is and what club they are associated with? Carla Hanson, MDI Investment Club, Janesville WI Davenport Investors Guild Rick E Oelerich, Treasurer The message you posted by "Administrator Account 08/12/2025" There is no confirmation just the basic idea that if back room oops at Charles Schwab is doing this, and we are down to only a handful of brokerage companies that will accept Investment Clubs as a retired broker with 25 years of experience this has the look of FINRA regulations all over it For some reason Investment Clubs have become the unwanted stepchild of the brokerage industry. Rick E Oelerich, Treasurer Thank you, Rick, for providing your club info. Rick, I think there's a faulty assumption in your analysis. There aren't "a handful" of brokers that will accept investment club clients, there are a handful of brokers that work with AccountSync that accept investment clubs as clients. It takes a significant amount of effort by the bivio technicians and the brokerage back office to establish AccountSync linkage with a brokerage so it only makes economic sense to approach the brokers that are most used by bivio clubs. Right now that means we have a self-reinforcing loop - there are few brokers who work well with bivio so most clubs have moved to them. Therefore, there aren't enough clubs using a different broker to justify the work. If more AccountSync brokers impose restrictions, that might change. Ira
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