Managed Account Platform Section

How to maintain an account with a Schwab Personalized Indexing strategy

How to maintain a Schwab Personalized Indexing account

Schwab Personalized Indexing™ (SPI) allows advisors to build customized equity index-based portfolios that seek to track the benchmark pre-tax and outperform after tax by using industry leading tax-loss harvesting techniques.

For digitally-enabled account types, advisors can access the edit exclusion workflow in two different ways:

  1. Select the 'Edit SPI Exclusions' link in the upper right corner of the Account Summary page.
     
    SPI Dashboard


    OR

     
  2. Navigate directly to the Action Center to begin a digital workflow from the Account Management tab. 
     
    Update or fund an account

    From the digital maintenance workflow select the desired account, then 'Customize the SPI Investment Strategy'. This will direct advisors to the SPI customization module.
     
    Managed account settings


    Adjustments to existing individual securities, industries and sub-industries exclusions can be made as long as they remain below the maximum predictive tracking error (PTE) threshold of 1.75%. If the threshold is exceeded, an error message will appear until the PTE limit is reduced.
     
    Individual Managed Account Access

      
    Exclusion limit
Forms library


For account types not supported by digital tools, the edit exclusions link on the SPI Digital Experience will take the user to the Forms Library. Or the Forms Library can be directly accessed through the Account Management tab on the top navigation bar. From there, go to the Managed Account Select/Access Investment Restrictions Form. Note that these account types are limited to only three securities since they are submitted via forms. Industry and sub-industry elections are not available via forms enrollment.
 

Managed Account Select

The Schwab Personalized Indexing Digital Dashboard was created to provide clients transparency with regard to their performance and holdings summary. The dashboard view will allow advisors and their clients to differentiate the separately managed account offer from all other accounts viewed on SchwabAdvisorCenter.com and Schwab Alliance.

The SPI Dashboard is accessed by a link in the upper right corner of the Account Summary page in Schwab Advisor Center.
 

View SPI Dashboard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Modules on account value and estimated tax impact are available and are individualized to their account.

Account value: Provides net value of the account, including: the value of stocks and cash, dividends, deposits, withdrawals, fees.

Estimated Federal Tax Impact:

  • The hypothetical calculation displayed starts with unrealized gain/loss, then subtracts fees, estimated income tax liability using the highest federal tax rate, and capital gains tax liability on realized gains and losses. 
  • The Estimated Tax impact module provides a daily summary of the potential federal tax savings of the account.

The Schwab Personalized Indexing dashboard on Schwab Alliance will display the same modules available to advisors on SchwabAdvisorCenter.com.
 

Alliance Dashboard

If an advisor wishes to terminate a Schwab Personalized Indexing account, follow the instructions on Terminating Enrollment in Managed Accounts.

Note: When terminating from a Schwab Personalized Indexing strategy, tax reporting is suspended at that time. If the advisor chooses to reinstate their client’s account, the previous account history will not be included. The advisor should consult MAAO directly at 877-595-6345 or email SPI_Operations@schwab.com to provide awareness of a client's decision to reinstate the account.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice.

Neither the tax-loss harvesting strategy nor any discussion herein is intended as tax advice, and Charles Schwab Investment Management, Inc. does not represent that any particular tax consequences will be obtained. Tax-loss harvesting involves certain risks including unintended tax implications. Investors should consult with their tax advisors and refer to Internal Revenue Service ("IRS") website at www.irs.gov about the consequences of tax-loss harvesting.

Portfolio Management for Schwab Personalized Indexing is provided by Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a registered investment adviser and an affiliate of Schwab. Both Schwab Asset Management and Schwab are separate entities and subsidiaries of The Charles Schwab Corporation. Please refer to the Charles Schwab Investment Management, Inc. Disclosure Brochure for additional information.

Schwab Personalized Indexing strategies are available through Schwab's Managed Account Access® program ("Access"). Please read Schwab's Managed Account Services™ disclosure brochure for important information and disclosures relating to Access and Schwab's Managed Account Services.

There are risks associated with any investment approach, and each Schwab Personalized Indexing strategy and equity market segment has their own set of risks based on client strategy selection and further customization.

Environmental, social, and corporate governance (ESG) strategies implemented by mutual funds, exchange-traded funds (ETFs), and separately managed accounts are currently subject to inconsistent industry definitions and standards for the measurement and evaluation of ESG factors; therefore, such factors may differ significantly across strategies. As a result, it may be difficult to compare ESG investment products. Further, some issuers may present their investment products as employing an ESG strategy but may overstate or inconsistently apply ESG factors. An investment product’s ESG strategy may significantly influence its performance. Because securities may be included or excluded based on ESG factors rather than other investment methodologies, the product’s performance may differ from (may be either higher or lower than) the overall market or comparable products that do not have ESG strategies. Environmental ("E") factors can include climate change, pollution, waste, and how an issuer protects and/or conserves natural resources. Social ("S") factors can include how an issuer manages its relationships with individuals, such as its employees, shareholders, and customers as well as its community. Corporate governance ("G") factors can include how an issuer operates, such as its leadership composition, pay and incentive structures, internal controls, and the rights of equity and debt holders. Carefully review an investment product’s prospectus or disclosure brochure to learn more about how it incorporates ESG factors into its investment strategy.

Strategies that use screening to exclude certain investments may not be able to take advantage of the same opportunities or market trends as strategies that do not use screening. There can be no assurance that the strategies will achieve their desired outcomes. Each investing strategy brings with it its own set of unique risks and benefits.

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