How to Start an Investment Club in the UK (2025 Guide)

Step 1: Find your members

Most successful investment clubs have between 5 and 15 members. Too few and you don't have enough ideas or capital; too many and meetings become unwieldy and decisions slow down.

A good starting group shares:

• Similar commitment levels — will people actually turn up to monthly meetings and do research?
• Compatible risk tolerance — mixing someone who wants 100% in FTSE 100 dividend stocks with someone chasing small-cap growth will create friction
• Mutual trust — you're pooling real money with these people

Friends, family, and colleagues are the most common starting points. Some clubs form around shared professional interests (e.g., a group of engineers investing in tech).

Step 2: Agree the rules before you start

Before any money changes hands, write a Club Agreement (sometimes called a Partnership Agreement). This doesn't need to be a formal legal document, but it should cover:

• How much each member contributes monthly (a fixed amount is simplest)
• How investment decisions are made (majority vote? consensus?)
• What happens when a member wants to leave
• What happens when a member misses contributions
• Who is the treasurer (and what are their responsibilities)
• How profits and losses are split on dissolution

Proshare (the UK investment club body) offers model club agreements that cover all the standard clauses. Their resources at proshare.org are a good starting point.

Step 3: Open a brokerage account

An investment club is treated as a partnership by HMRC — not a company or trust. This means you'll need to open an account in the name of the partnership (or under the names of all members).

UK brokers that accept investment club accounts include:

• AJ Bell — widely used by clubs, good range of UK and international shares
• Hargreaves Lansdown — more expensive, but well-known
• Interactive Brokers — lower fees, more complex platform
• HSBC Global Investments — good for clubs with HSBC banking already

Most brokers will require a partnership mandate signed by all members and proof of identity for the named signatories.

Step 4: Set up a bank account

Keep the club's cash separate from personal accounts. A business current account in the club's name (or a multi-signatory personal account at some banks) keeps things clean.

Monthly contributions go into this account. The treasurer then transfers to the brokerage when the club decides to invest. Any dividends paid in cash will typically land at the broker and can be swept to the bank account periodically.

Step 5: Understand your HMRC obligations

Investment clubs are not required to register separately with HMRC or file a club tax return. Instead, each member is individually responsible for reporting their share of the club's income and gains on their own self-assessment tax return.

The treasurer's job is to produce the numbers each member needs:

• Each member's share of capital gains and losses from share sales
• Each member's share of dividend income received
• A Form 185 (Club Accounts) summarising all of the above for each member

These figures need to be with members before the self-assessment deadline (31 January for online returns). In practice, aim to have them ready by the end of April after the tax year closes.

Step 6: Set up your accounting

This is where many clubs underestimate the work involved. You need to track:

• Every transaction (buy, sell, dividend) with the exact date and price
• The Section 104 pool for every security
• Same-day and 30-day matching rules on every sale
• Each member's ownership percentage over time
• Capital Equalisation Adjustments when new members join
• NAV per unit at each monthly meeting

A spreadsheet can handle this for a small club in the early years. As the club grows and members join or leave, it becomes the treasurer's least favourite job.

Step 7: Hold your first meeting

The first meeting should cover: agreeing the club agreement (have everyone sign), assigning roles (treasurer, chairman, secretary), setting the monthly contribution amount, and making your first investment decision.

Don't spend the whole meeting on admin. Leave time to discuss your first potential investment — even if you don't buy anything yet. The energy of a new club is its biggest asset.