Introduction to householding

Introduction to householding

A household at Schwab is comprised of one or more related Tooltip clients residing at the same home address and their associated accounts. Schwab aggregates the asset balances and activities of household accounts to determine applicable benefits such as lower commission rates, and fee waivers.

Schwab automatically groups qualified accounts of individuals with the same last name at the same home address into a household. If a qualified account is not included in the household, Schwab can add the account to the household upon the client or advisor's request.

Benefits of combining households

Schwab makes it possible for clients to receive additional benefits by using the same household balance at the broker-dealer and at Schwab Bank®.

Benefits include, but are not limited to:

  • Electronic trade discounts*
  • Special fee waivers*

*Discounts and fee waivers may be applied for households meeting certain asset levels or trading activity minimums.

Household balance

Schwab determines account fees, household service fees, and commissions based on the household balance.

The household balance is a combined value of the accounts joined together with the same Household Group IDs (HH Group ID). However, accounts with an E in the Comm. Note field are not included in the household for pricing purposes. Common reasons for not including an account in a household include:

  • The account type may require additional information to be added to the qualified household.
  • The account may not meet eligibility requirements.

See Household business rules charts below for householding rules.

Effects on clients

As an advisor, you are responsible for explaining any effects of householding to the client. Important effects can include:

  • Trade commissions may decrease because of applicable trade counts for accounts in the household. However, if one of the clients leaves the household or reduces trade transactions in their account, it could result in increased commissions.
  • By requesting householding, each member of the household agrees that Schwab may use general information about the household's overall account balances and activities to provide or explain household calculations such as fees and services available to each member.
  • Only family members living at the same home or legal address may be granted benefits based on combined household assets.
Privacy

If a client does not own, govern, or have power of attorney on an account, Schwab cannot discuss account specifics with him or her. Schwab does not reveal the individual account balance of any account for which the client has no authority. However, Schwab can indicate the asset breakpoint the household has reached as it pertains to pricing, even if the client does not have authority on all the accounts.

In Schwab Alliance, households are not visible to other household members. Schwab requires a completed and signed Power of Attorney (Individual POA) form or a View Only Authorization form to grant access between household member accounts.

To make it possible for clients to use the same household balance at the broker-dealer and at Schwab Bank, we must comply with the more restrictive rules of the Office of the Comptroller of Currency. For this reason, Schwab does not grant exceptions to the householding rules. If your client does not meet the householding requirements, contact your service team to find an alternative means of providing benefits to clients who see themselves in a household relationship.

Business rules

Clients in the household
  • Clients with the same last name and address—Automatically householded together. Process runs nightly.
  • Dependent family members, spouses, and domestic partners at same address—May be added to the household upon verbal request of advisor or client. Contact your service team to submit a request.
  • If a client within a household moves and no longer shares a home/legal address with the other household members, that client is removed from the household. Client householding is reviewed and updated monthly to determine whether clients should remain in existing households.
Accounts in the householdSchwab Bank, Schwab Global Account™, and Schwab Private Client™ accounts are automatically added to the household for clients with brokerage accounts.

 

For information regarding which account types are included, optional, or ineligible for householding, refer to the following table:

Account type householding rules

Account typesIncludedOptionalIneligibleNotes
403(b)(7)  Send a signed Addition to Household Request Form to the service team.
529 College Savings Plan   
Annuities  Only for accounts where account holder is a person and not a corporation or trust.
Charities  Includes Schwab Charitable Fund™.
Company retirement accounts  
  • Individually held assets only; no pooled accounts.
  • Send a signed Addition to Household Request Form to the service team.
Conservatorship  Included in the household of the ward.
Corporation  
  • Must be solely owned by or established for the benefit of the individual or family.
  • Contact the service team to submit an internal household request with the name of agent or partner and a statement that the account is for the benefit of the individual or family.
Custodial (UGMA/UTMA)  Included in the household of the custodian until age of termination is reached.
CyberTrader   
Doing business as  
  • Must be solely owned by or established for the benefit of the individual or family.
  • Contact the service team to submit an internal household request with the name of agent or partner and a statement that the account is for the benefit of the individual or family.
Education savings   
Estate  Contact the service team to submit a household request with the name of the successor who is a member of the household.
Fiduciary trust  Send a signed Addition to Household Request Form to the service team.
Included in the household of the ward.
Guardianship  Included in the household of the ward.
Individual  Includes joint tenants with rights of survivorship, tenants in common, tenants by entirety, community property, community property with rights of survivorship.
Individual 401(k)  Send a signed Addition to Household Request Form to the service team.
Inherited IRA  
  • Excludes SIMPLE master and group plan accounts.
  • Contact service team to submit beneficial ownership information if the owner is a company or trust.
Investment clubs   
Joint  Includes joint tenants with rights of survivorship, tenants in common, tenants by entirety, community property, community property with rights of survivorship.
Limited liability company  
  • Must be solely owned by or established for the benefit of the individual or family.
  • Contact the service team to submit an internal household request with the name of agent or partner and a statement that the account is for the benefit of the individual or family.
Living and testamentary trusts  
  • Includes accounts in the current beneficiary’s household to benefit that beneficiary.
  • Contact the service team to submit a household request that includes name of trust beneficiary (or successor) who is a member of the household.
Living trust  Trusts that are established under the trustee’s Social Security number only.
Non-incorporated association  
  • Must be solely owned by or established for the benefit of the individual or family.
  • Contact the service team to submit an internal household request with the name of agent or partner and a statement that the account is for the benefit of the individual or family.
Partnership  
  • Must be solely owned by or established for the benefit of the individual or family.
  • Contact the service team to submit an internal household request with the name of agent or partner and a statement that the account is for the benefit of the individual or family.
Pension trust  
  • Individually held assets only; no pooled accounts.
  • Send a signed Addition to Household Request Form to the service team.
Pooled retirement plans   
QRP/Keogh  Send a signed Addition to Household Request Form to the service team.
Rollover IRA  Excluding SIMPLE master and group plan accounts.
Roth IRA   
SARSEP IRA  Excluding SIMPLE master and group plan accounts.
Schwab Personal Choice Retirement Account®   
SEP-IRA  Excluding SIMPLE master and group plan accounts.
SIMPLE IRA  Excluding SIMPLE master and group plan accounts.
Sole proprietorship   
Strategic trading   
Traditional IRA   

The following are available to assist you:

How to add a power of attorney to an account
How to grant View Only access to Schwab accounts
How to make general account changes
How to work with Schwab Advisor Center® security groups
Introduction to Schwab Alliance

For questions concerning pricing and householding, contact your sales team.

For pricing information related to householded accounts, see the Charles Schwab Pricing Guide.

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