Managed Account Platform Section

Introduction to managed accounts

Introduction to managed accounts

A managed account, also known as a separately managed account (SMA), is a portfolio of individual securities managed on a discretionary basis by a money manager or asset management firm with expertise in a specific asset class or investment style, such as large-cap growth, small-cap value, or fixed income. Schwab's managed account solutions allow you to assign portfolio management duties to money managers, giving you more time to build relationships with your clients.

Schwab offers three managed account solutions to help you fulfill your clients' asset allocation needs: Managed Account Select® (Select) Tooltip , Managed Account Access® (Access) Tooltip , and Managed Account Marketplace®  (Marketplace) Tooltip . Access includes Schwab Personalized Indexing™ strategies. Marketplace includes access to turnkey asset management providers (TAMPs) offering their service on the platform.

For initial steps to open a managed account, refer to our training guide.

Key features of Schwab managed accounts:

  • Direct ownership of portfolio's underlying securities
  • Transparency of trading activity and portfolio holdings
  • Ability to restrict investments Tooltip to specific industries and companies
  • Ability to harvest tax gains and/or losses
  • Access to broad range of money managers
  • Access to managed account research on Schwab Advisor Center®
  • Three solutions to fit needs and desired participation level

Key information for Schwab managed accounts:

  • To participate in Schwab’s managed account solutions, contact your sales representative. Before you can open managed accounts for your clients, you must first sign the Managed Accounts Addendum to the Investment Manager Service Agreement and complete the one-time process of setting up a managed account master.
  • Managed accounts are not eligible for debit features.
  • View detailed account information, including the platform name, money manager name, and investment strategy name, on the Profiles section on Schwab Advisor Center. Your clients see managed account information printed on their statements.
  • Your clients can choose to receive paper confirmations, immediate electronic confirmations, or a quarterly Trade Confirmation Report in the mail.
  • You determine your advisor fee and bill it separately from the money manager and Schwab fees.
  • You have access to Schwab’s managed account research page on Schwab Advisor Center, regardless of the managed account solution you choose.
  • Some money managers may wish to review your policies and procedures for determining client appropriateness before accepting your clients. Consult with your legal or compliance professionals regarding your obligations in this area.

Managed Account Select®
Select is the most comprehensive managed account program at Schwab. With the Select program, you have access to high-quality research and ongoing due diligence Tooltip of money managers and investment strategies provided by The Schwab Center for Financial Research (SCFR). SCFR's services for Select are based on the research methodology SCFR developed for mutual fund selection, its unique research on SMAs, and the expertise of its research team.

Select features and benefits for you and your clients include:

  • Single-contract structure
  • Low account minimums
  • Bundled fees
  • Research provided by SCFR
  • Operational due diligence provided by SCFR
  • Alerts about regulatory communications, investment strategy updates, and money manager updates
  • Total-portfolio solutions with Diversified Portfolios Tooltip

Some money managers may have higher minimums. For details, see Managed Account Select Overview.

Managed Account Access®
Access allows you to work with an array of money managers, conduct your own research, and quickly establish and maintain accounts using Schwab paperwork. Money managers and investment strategies in Access are not researched by Schwab.

Access features and benefits include:

  • Single-contract structure
  • Low account minimums
  • Bundled fees
  • Managed account tools and resources
  • Ongoing operational due diligence of non-affiliated strategies
  • Alerts about regulatory communications, investment strategy updates, and money manager updates
  • Money manager flexibility
  • Variety of investment strategies, including:
    • Standard equity and fixed income SMAs
    • Specialty SMAs
    • ThomasPartners Strategies
    • Exchange-traded fund (ETF)-based strategies
      • Globally diversified Windhaven Strategies
    • Schwab Personalized Indexing Strategies
      • Schwab Personalized Indexing Schwab 1000 Equity
      • Schwab Personalized Indexing S&P Small Cap 600
      • Schwab Personalized Indexing MSCI KLD 400 Social
      • Schwab Personalized Indexing MSCI EAFE International
    • Asset allocation/multi-strategy portfolios

Some money managers may have higher minimums. For details, see Managed Account Access Overview.

Managed Account Marketplace®
Marketplace provides access to hundreds of money managers and thousands of investment strategies. The Marketplace platform also allows advisors to work with a variety of TAMPs. You conduct research and due diligence on the money managers to select the best fit for your clients, and you negotiate money manager fees. See the Marketplace fee schedules section in this article for pricing and fee details.

Marketplace features and benefits include:

  • Dual-contract Tooltip  structure
  • Money manager flexibility
  • Investment strategies representing most investment styles
  • Access to Schwab’s brokerage and custody services

Researching money managers
A separate managed account research page provides a range of tools and resources. Use these resources to leverage Schwab’s research on Select money managers and investment strategies or to conduct your own due diligence on Access and Marketplace money managers and investment strategies that Schwab does not evaluate. Managed account research tools include:

 SelectAccessMarketplace
Money manager and investment strategy research conducted by SCFRYesNoNo
Money manager and investment strategy due diligence conducted by SCFRYesYesNo
Money manager contracts negotiated by SchwabYesYesNo
Fee structureSchwab and money manager fees are bundledSchwab and money manager fees are charged independently
Schwab's feeAsset-based fee, bundled with money manager fee at 0.7% or less. Refer to the detailed pricing table below.Contact your Advisor Services relationship manager
Money manager's feeIncluded in program feeDetermined by money manager
Money manager account minimums
  • $100,000 most equity investment strategies
  • $250,000 for most fixed income investment strategies
  • $150,000 to $650,000 for Diversified Portfolios in Select
Determined by money manager
Account group pricing Tooltip YesYesNo
Money managers willing to vote proxy and respond to issuer communicationYesYesNo
AlertsYesYesNo
News regarding program updatesYesYesNo
Digital account openYesYesYes

In addition to your advisory fee, the asset-based bundled fee of Select and Access includes Schwab's brokerage and custody services and each money manager’s services.*

Clients can group eligible Select and Access accounts of the same asset type and fee schedule to reach fee breakpoints. Schwab calculates account group fees Tooltip  in Select and Access by totaling the value of client assets within the following categories: Equity, Index-based, and ThomasPartners; ETF-based; Schwab Personalized Indexing; Fixed Income and Corporate Bond Ladder; and Municipal Bond Ladder.

TierTier
Chargeable
Assets
Equity
Tier
Annual
Rate
Index-
Based
Tier
Annual
Rate
Thomas
Partners
Tier
Annual
Rate
ETF-
Based
Tier
Annual
Rate
Schwab Personalized
Indexing Tier
Annual Rate
Fixed Income and
Corporate Bond
Ladder Tier
Annual Rate
Municipal
Bond
Ladder
Tier
1First $250,0000.70%0.65%0.65%0.70%0.25%0.45%0.35%
2Next $250,000 (over $250,000)0.70%0.65%0.65%0.70%0.25%0.45%0.35%
3Next $500,000 (over $500,000)0.60%0.60%0.50%0.60%0.20%0.40%0.30%
4Next $1 million (over $1M up to $2M)0.60%0.55%0.50%0.50%0.20%0.40%0.30%
5Next $3 million (over $2M up to $5M)0.50%0.50%0.45%0.50%0.15%0.35%0.25%
6Assets over
$5 million
0.50%0.45%0.45%0.50%0.15%0.35%0.25%

*See the Schwab Managed Account Services™ Disclosure Package for full details concerning fees and fee calculations.

Digital onboarding capabilities provide advisors with a streamlined workflow to securely open, set up, and fund multiple managed accounts for a household via a single email from you to your client. Managed Account Select and Access accounts, including Schwab Personalized Indexing accounts, can be combined into one envelope and multiple Managed Account Marketplace accounts may be combined into one envelope.

The Digital Onboarding process is available to all managed accounts. The following eligible account types and registrations are available for Digital Onboarding.

  • Schwab One (Brokerage): Individual, Joint Tenant, Tenants in Common, Community Property, Custodial, Designated Beneficiary (Individual and Joint)
  • Trust:  Living Trust (Revokable and Irrevocable)
  • IRA: Contributory, Roth Contributory, Rollover, Inherited (Individual)

Marketplace offers two pricing models: transaction-based and asset-based. Schwab fees include brokerage and custody services, which are separate from the fee you negotiate with each money manager you choose to work with, and your advisory fee. Consult with your Schwab relationship manager to determine which fee structure or combination of fee structures to use.
 
Transaction-based pricing
Transaction-based pricing on Marketplace accounts is similar to the transaction-based pricing on non-managed accounts. For pricing information, see the Charles Schwab Institutional Pricing Guide or contact your relationship manager. Trades with other broker-dealers may have separate fees or commissions.

Asset-based pricing
With asset-based pricing, each money manager’s investment strategy is assigned an asset-based schedule. Contact your relationship manager for details.

How can I confirm that a money manager or an investment strategy I would like to use is available through Schwab's managed account solutions?
Schwab offers three main resources to determine if a money manager or investment strategy is available for Schwab’s managed accounts. For money managers and investment strategies in all three managed account solutions, you can view the Money Managers tab. This list is updated daily.

Schwab offers two additional resources for Select and Access. For the most current list of Select and Access money managers and investment strategies, you can view the Managed Account Select Overview tab or the Managed Account Access Overview tab. Both tabs are updated daily. For a printable list, you can download the Select and Access Strategies list which is updated quarterly.

Can I use a money manager or investment strategy that is not available at Schwab?
If you would like to work with a money manager or use an investment strategy not currently available through Access or Marketplace, contact your sales representative. This option is not available through the Managed Account Select® program.

Are there additional fees to my clients, other than the standard Select and Access asset-based pricing bundled fee?
Potentially. To view information about trades executed through Broker-Dealers other than Schwab in Select and Access, see Information about Trades Executed through Broker-Dealers other than Schwab in the Managed Account Select and Managed Account Access Programs.

Can any type of account be opened as a managed account?
No. Managed accounts at Schwab cannot be opened for estate accounts, including guardianships and conservatorships. A Schwab Personal Choice Retirement Account® is eligible for Marketplace only. Also note that due to the Security and Exchange Commission's "pay to play" rule, a non-federal government entity Tooltip is eligible for Marketplace but not for Select or Access. Account features may be limited for certain types of managed accounts. If you have questions about eligible registration types and features for managed accounts, contact Managed Account Operations at 877-595-6345 or via a Schwab Advisor Center service request.

Can I download my clients' managed accounts to my portfolio management system?
Yes. Once the new managed account master is added into the Schwab Data Delivery® tool, you will be able to download data. If you encounter any problems, contact Advisor Platform Support at 800-647-5465.

Do I have additional regulatory requirements if I use a money manager?
Yes. You should be familiar with your obligations under the Investment Advisers Act of 1940 and Rule 3a-4 under the Investment Company Act of 1940 when using managed accounts. In the Managed Accounts Addendum to the Investment Manager Service Agreement with Schwab, you agree to meet applicable regulatory requirements. Consult with your legal or compliance professionals regarding your obligations in this area.

How to select investment strategies for managed accounts
How to set up a managed account master
Introduction to turnkey asset management providers through Schwab
Introduction to the managed accounts communications library

For questions about opening or maintaining managed accounts, contact Managed Account Operations at 877-595-6345 from 9:00 a.m. to 5:00 p.m. ET or via a Schwab Advisor Center service request.

If you have specific questions about Schwab Personalized Indexing, contact the Schwab Asset Management RIA Sales Desk at 877-824-5615.

For information on the selection and evaluation of Money Managers, see the Schwab Managed Account ServicesTM Disclosure Brochure Package and refer to the section titled Portfolio Manager Selection and Evaluation.

Additional information regarding fees associated with trades executed through Broker-Dealers other than Schwab in Select and Access.

Download a brochure about Schwab’s managed account solutions.

Managed Account Select® (Select) and Managed Account Access® (Access) Fees: Fee includes money manager services and Schwab brokerage and custody services. Your advisory fee is independent of this fee. In addition, certain special service fees (such as wire transfer), charges for transactions executed by other broker-dealers, and dealer markups and markdowns on fixed income securities are not included. Schwab may also make dealer profits on fixed income transactions executed by Schwab on a principal basis. Please click here to view important information about the frequency and the cost of trades executed through broker-dealers other than Schwab.

TAMP services may vary depending on which TAMP you choose. Schwab does not recommend or endorse any particular TAMP. Schwab is not affiliated with any of the TAMPs available in Marketplace. Schwab makes no representation or warranty about any TAMP or its suitability for your clients. Schwab does not guarantee the accuracy of the information about the services provided by any particular TAMP. 

Schwab calculates Account Grouping fees in Select and Access by totaling the value of client assets in their managed accounts within the following investment strategy categories: Equity, Index-Based, and ThomasPartners; ETF-Based; Schwab Personalized Indexing; Fixed Income and Corporate Bond Ladder; and Municipal Bond Ladder. Diversified Portfolios, Master Limited Partnership ("MLP") strategies, options-based, and balanced strategies are charged according to the regular Equity fee schedule. Preferred stock and convertible bond strategies are charged according to the Fixed Income fee schedule. ERISA accounts can only be grouped with other ERISA accounts of identical registration. For more details on Account Groups and program fee calculations, see the Schwab Managed Account Services Disclosure Brochure.

Marketplace accounts with asset-based pricing pay a minimum monthly service fee of $62.50. Asset-based fees do not include costs for trades executed away from Schwab, exchange and regulatory fees, transfer taxes, odd lot differentials, mutual fund short-term redemption fees, margin interest, electronic funds or wire transfer fees, and any other similar costs or charges.

Transaction-based pricing on Marketplace accounts is similar to the transaction-based pricing on non-managed accounts. For trade commission pricing, contact your relationship manager. Trades with other broker-dealers may have separate fees or commissions.

Pricing information in the Charles Schwab Institutional Pricing Guide supersedes this sheet or any prior pricing details and notices you may have received. Charles Schwab reserves the right to change or waive fees at its discretion.

Charles Schwab Investment Management, Inc. (CSIM), dba Schwab Asset Management, is a registered investment advisor and affiliate of Charles Schwab & Co., Inc. (Schwab). Portfolio Management for Windhaven Strategies, ThomasPartners Strategies, and Schwab Personalized Indexing strategies is provided by CSIM dba Schwab Asset Managment™, a registered investment adviser and an affiliate of Charles Schwab & Co., Inc. ("Schwab"). Both Schwab Asset Management and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation. Please refer to CSIM's disclosure brochure and Schwab’s disclosure brochure for important information and disclosures relating to Access and Schwab's Managed Account Services.

Schwab and Parametric Portfolio Associates LLC (“Parametric”) are separate and unaffiliated companies. 

Schwab does not provide advice or recommendations regarding managed accounts, MMs, or securities to investment advisors or their clients.

Please read the Schwab Managed Account Services™ Disclosure Package for important information and disclosures regarding the Managed Account Select® ("Select") and Managed Account Access® ("Access") programs. In addition, please read the participating money manager's ("MM's") disclosure brochure, including any supplements for important information and disclosures. Investments in managed accounts should be considered in view of a larger, more diversified investment portfolio. Services may vary, depending on which MM you choose, and are subject to an MM's acceptance of the account. 

The Select and Access programs are sponsored by Charles Schwab & Co., Inc. ("Schwab"). The MMs in Select are not affiliated with Schwab. The Schwab Center for Financial Research (“SCFR”) is a division of Schwab. In Select, SCFR conducts an operational evaluation of MMs, monitors the MM's performance periodically, and provides research. In Access, SCFR conducts operational evaluations of unaffiliated MMs. Schwab does not provide advice or recommendations regarding managed accounts, MMs, or securities to investment advisors or their clients. Independent investment advisors are not owned by, affiliated with, or supervised by Schwab. Independent investment advisors, except Charles Schwab Investment Management, Inc., are not owned by, affiliated with or supervised by Schwab.

The Managed Account Marketplace® ("Marketplace") platform is not a program sponsored by Schwab. Marketplace is an open architecture platform that gives investment advisors and their clients' access to separate account managers and turnkey asset management providers (TAMPs). Participating MMs and TAMPs need to establish a contract and have system compatibility with Schwab in order to be in Marketplace. The MMs, TAMPs, and their investment strategies available in Marketplace are not evaluated by Schwab.

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