Features & Services Section

Introduction to Sub-custody Services

Introduction to Sub-custody Services

Schwab Advisor Services Sub-Custody Services provides back-office support, including custody, trading, and transaction services, to trust professionals—such as banks and trust companies which are primary custodians for their trust clients.

  • Fiduciary control is retained by the bank/trust company.
  • Automated account-to-account transaction settlement and reconciliation.
  • Access to a broad array of investments for clients.
  • Interface with the Web Trading platformPortfolio Rebalancer, and investment research on Schwab Advisor Center®.
  • Automated data transmission compatible with several trust accounting systems.
  • Access to data critical for recordkeeping efficiency.
  • Schwab acts as sub-custodian while the bank or trust company remains primary custodian.
  • Schwab respects the bank's/trust company's relationship with its clients and does not interact with them directly.
  • Sub-Custody Services are provided by Schwab Advisor Services.
  • There are specific services Schwab does not provide in Sub-Custody.
Account registration

Schwab brokerage accounts are registered in the name of the bank or trust company as a corporation, with the bank/trust company’s name, address, and tax identification number.

The underlying trust accounts are added by the bank/trust company as an "FBO" line in the registrations using the format of their choice (e.g., client/trust name, account number).

Account-to-account service
  • The account-to-account structure creates a one-to-one relationship between the account on the bank or trust company trust accounting system and Schwab’s broker-dealer system.
  • The Schwab brokerage accounts are registered to the bank/trust company "FBO" its clients. The bank/trust company usually inputs its trust client’s or account’s name, account number, or both in the "FBO" line of the brokerage account registration and uses that information to match accounts on both systems are recorded.
  • The broker-dealer settles transactions at the sub-account level.
Data feedEnhanced data delivery mirrors Schwab holdings at a sub-account level with compatible systems.
Fees
  • Schwab’s Advisor Services pricing applies.
  • There are no special or additional fees for custody/sub-custody.
  • Schwab Advisor Services does not charge for data feeds to your trust accounting system.
  • Additional charges from your trust accounting system vendor may apply. Consult your vendor for details.
Your clientSchwab serves only the bank/trust company. Schwab does not directly serve or have a relationship with your clients.
Alternative investmentsSchwab reviews assets considered alternative investments (AIs) to ensure the asset is acceptable for custody at Schwab.

What kind of data will Schwab Advisor Services be sending to trust accounting systems?
Schwab will be sending data that includes trust-specific information such as:

  • Cash balances
  • Detailed transaction information
  • Positions

Will Schwab Advisor Services service the accounts sub-custodied at Schwab?
Yes. Schwab Advisor Services will provide servicing support to the primary custodian of the accounts.

Does Schwab custody alternative investments?
Yes. Schwab Advisor Services currently custodies alternative investments for independent financial service institutions. See Introduction to Schwab Alternative Investment Custody Services for more information.

Does Schwab custody foreign securities?
No. However, Schwab Advisor Services works with all major custodians to ensure international securities are traded, settled, and processed in an efficient and cost-effective manner.

Does Schwab Sub-Custody facilitate securities lending?
No. Schwab Advisor Services does not allow securities lending/margin in Sub-Custody accounts.

How to enroll in and make adjustments to Personal Trust Reporting Services
Introduction to Administrative Trustee Services
Introduction to investment research
Introduction to Personal Trust Reporting Services
Introduction to Portfolio Rebalancer
Introduction to Schwab Alternative Investment Custody Services
Introduction to the Web Trading platform

See the Trust Glossary for a definition of the trust terms used in this article.

Contact your relationship manager for more information.