Winnipeg Free Press - PRINT EDITION

Investing in friends

Financial share clubs fill niche for investors who want to talk money without a sales pitch

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Every month, about a dozen seniors get together to discuss their aches and pains -- but they don't chat about their physical health during these two-hour sessions.

They talk about the trials and tribulations of managing their finances.

The Financial Management Share Club meets at Creative Retirement Manitoba on Sherbrook Street on the third Friday of every month.

They basically pick each others' brains on just about everything to do with personal finance -- from buying and selling stocks and bonds to estate planning to efficiently unwinding their RRSPs.

Fred Chernoff is chair of the group and official spokesman (the others didn't want to give their names for attribution). He says the club is a safe venue for members to discuss openly their concerns about money -- something that is sorely needed in the buy-and-sell world of the financial industry.

"The group is specifically designed for like-minded seniors to help one another by sharing experiences, information and mainly on investing -- with no strings attached to anyone," says Chernoff, 84, a retired corporate trainer. "Here, we freely share our understanding of the stock market, successes, failures and personal thoughts as we see the economic picture in Canada."

No one tells others how or where to invest money, and nobody is pitching a financial product.

It's simply a frank peer-to-peer chat about personal finance that can be difficult to find anywhere else, Chernoff says.

And what goes on in the group stays in the group.

Besides confidentiality, the share club has just three requirements: Each member must pay a $15 annual fee, own a brokerage account and be a senior.

It also doesn't hurt to have a curious mind about finance -- and a sense of humour. Almost every meeting involves a lot of good-hearted laughter and camaraderie, Chernoff says.

But the main goal is learning from each other, not from industry pros.

"Experts are a dime a dozen," Chernoff says. "We want the group to learn and we get ideas from one another, and then we go home and learn some more."

Unfortunately, if you were thinking of joining, the club has been full for some time, but nothing is stopping industrious individuals from starting their own club.

As a matter of fact, that's how most share clubs start, says Dale Ennis, founder and editor-in-chief of Canadian MoneySaver magazine.

And he should know. For the last 20 years, the magazine has listed share clubs looking for members -- someone posts a message advertising a club has openings.

Demand is generally high for these types of social/financial clubs, though Ennis says it's hard to say how many share clubs exist in Canada.

The magazine has listed countless clubs over the last two decades.

"The only clubs we list are those still seeking members," Ennis says. Once they have enough members, they stop advertising with the magazine, he says.

They are popular because they fill a niche in the investment landscape, Ennis says. In fact, any opportunity for like-minded individuals to discuss personal finance seems to be popular these days, he says.

"We have found over the years when we do surveys, people rate No. 1 the discussion groups where you can talk with like-minded individuals in a low-key, no-pressure atmosphere," he says.

Share clubs aren't to be confused with investment clubs, which are specifically aimed at enhancing stock-market returns, Ennis says.

"With investment clubs, there are some legal and accounting regulations that need to be in place," he says. "We decided to make ours educational groups, and that's why we use the term share club."

But it's not just average folks who long for frank discussions about money amongst their peers.

The format is also popular with high-net-worth investors.

One of the best known share clubs actually caters to the ultra-wealthy. Called The Investment Group for Enhanced Returns for the 21st Century, or TIGER 21 for short, this U.S.-based group was founded in 1999 and has nearly 200 members, each with at least $10 million in investable assets.

A Canadian version -- TIGER 21 Canada -- started groups in Vancouver, Toronto and Calgary in the past few weeks, and another group is scheduled to start in fall in Montreal.

The Canadian founder, Thane Stenner, says TIGER 21 has proven successful in the United States in meeting many of the same needs the Winnipeg seniors' group has been filling for its members. Speaking plainly and honestly about your finances with peers is a rare opportunity at any level of wealth.

"A lot of times, quite successful people have a high level of isolation because it's not easy to talk to friends or family members about some of the challenges and complexities that wealth brings," says Stenner, who is also director of wealth management for Richardson GMP.

"This is a safe-harbour environment where they can come and table those issues."

TIGER 21, however, has two distinct differences from most other share clubs. Membership in TIGER 21 is US$30,000 a year, and members must meet a wealth test of at least $10 million in investable assets.

"Virtually 90 per cent of TIGER members are wealth creators or business owners," Stenner says. "It's not really meant for inheritors unless the inheritor has done something entrepreneurial with some of the money."

The pricey annual fee does have its benefits. For one, members get access to the world's leading experts in finance, such as the chief economists from U.S. investment banks or top hedge-fund managers.

But perhaps the most unique aspect of TIGER 21 is "portfolio defence." Once every session, a member bares it all -- financially -- for other members to critique.

"They 'care-frontationally' challenge each member on what they're doing and why they're doing it," Stenner says.

Here in Winnipeg, the seniors' group isn't quite that intense. They don't drill too deeply into each others' financial affairs.

Still, the broad concept is essentially the same, Chernoff says.

It's one part classroom, and one part support group -- because managing one's finances alone can be a burdensome task for portfolios of all shapes and sizes.

"Seniors sharing with seniors makes even the smallest load a little lighter."

giganticsmile@gmail.com

Republished from the Winnipeg Free Press print edition July 16, 2011 B9

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