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Bringing New Members Into the Fold


Make Sure They Know What’s Expected



Q.  Do you have a new club member application form I can have a copy of, or a link to one? Something with information, Social Security number — stuff that needs to be completed when a new member joins the club?

Mark Riehl
asked via the BetterInvesting’s Discussion List for Club Treasurers

A.  Before you get to the point where you have a potential club member complete an application, you need to ensure that this person has had an opportunity to make an informed decision about whether he or she wants to be considered for membership.
   
Think about it like this: Before you invest in any stock, you should research the company and know what it does, how it makes money, its prospects for growth and the investment potential of its stock. Based on your assessment, you’ll either choose to invest in the stock or pass on the opportunity. Similarly, potential club members should be able to clearly assess whether they want to be in your club.
   
The potential member can glean a lot of information from the club prospectus and partnership agreement. The club prospectus should cover: 

•  What an investment club is and how it works — for example, that the monthly contributions are used to buy shares/units in the club, similar to how a mutual funds works.
•  What to expect from club meetings — when and where meetings are held, how long they last and a sample agenda.
•  The investment experience required before joining.
•  The number of meetings that must be attended before consideration for membership.
•  The training required after joining the club and the time frame in which it must be completed.
•  The equipment, software and services needed for membership.
•  The monthly time commitment.
•  The monetary commitments.
   
You should be able to cover these topics in less than two pages. Your work now will help to prevent new members from joining only to leave or fail to participate because the expectations weren’t made clear.
   
As to the new member application itself, I have provided a sample form that your club can adopt; it accompanies this article. Next month we’ll cover the issues your club should handle with newly elected members to ensure they’ll be active members for the long run.




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