Managed Account Platform Section

How to open a Roth IRA on the managed account platform

How to open a Roth IRA on the managed account platform

A Roth individual retirement account (IRA) is a retirement savings option for clients looking for potentially greater tax savings than a traditional IRA. Eligible Roth IRAs may be opened on the Schwab Managed Account Select® ( Select Tooltip ), Managed Account Access® ( Access Tooltip ), or Managed Account Marketplace® ( Marketplace Tooltip ) platforms.

If your client already has an existing managed account on file and would like to open additional managed accounts with identical registration, refer to How to add an additional managed account, or change or terminate a money manager article.

You can open Roth IRAs for clients who are new to Select, Access, or Marketplace using eAuthorization for Digital Onboarding.

To open a Roth IRA on the managed account platform, you will need:

Required

All accounts
  • Your firm name, contact information, and managed account master
  • The name of the money manager firm and investment strategy
  • Account holder's name, home address, identification number Tooltip , birth date, telephone numbers, citizenship status, employment status, and occupation; and the employer's name, business address Tooltip , and business phone number
  • Beneficiary's name, relationship, Social Security number or taxpayer identification number, birth date, and consent of spouse, if applicable
  • Funding Tooltip for the account (meeting required account minimums) through a journal entry, a transfer of assets (using eligible securities), or a check deposit
  • Adobe® Reader® or Adobe Acrobat® 7.0 or higher (download the latest version on the Adobe website)
In addition to the required information above, the following platform-specific information is required:
Select or Access accounts
Marketplace accounts
  • Money manager's managed account master (obtained from the money manager) if using forms. If using eAuthorization for Digital Onboarding, this is not needed as it is built into the digital workflow.

 

Conditional

All accounts
  • If opening a funding account: your firm's non-managed account master
  • If funding the account through a journal entry: the client's Schwab account number
  • If any authorized individual or control person is affiliated with or employed by a stock exchange; a member firm of an exchange or FINRA; or a municipal securities broker-dealer and Rule 3210 applies: a FINRA Rule 3210 Consent Letter
  • If the managed account uses an investment strategy trading options: options authorization Tooltip using a completed Options Trading and Margin Application. Investment strategies using options will have an options note listed within Additional Information, located under the Operational section of the individual Strategy Details page.
  • If adding the Schwab account to an existing quarterly trade confirmation report subscription: the Schwab account number(s) in the existing subscription
  • If account holder chooses a per stirpes or per capita beneficiary designation: a completed Beneficiary Designation Form (IRA Change Beneficiary/IRA Update Beneficiary
  • If using DocuSign to submit forms:
    • For existing Schwab clients: a complete Schwab Advisor Center® profile with the account holder's current email address and mobile phone number
    • For new-to-Schwab clients: the email address and a mobile phone number
  • All clients must use either Alliance Authentication (only available when starting the envelope within Schwab Advisor Center), or, both text message (SMS) authentication and Knowledge Based Authentication (KBA) for DocuSign (available in both Schwab Advisor Center and the DocuSign Console)
In addition to the conditional information above, the following platform-specific information is required if certain conditions are met:
Select or Access accounts
  • If electing to group Schwab accounts for fee calculation purposes: the affected Schwab account numbers
  • If securities are used to fund the account and are missing cost basis: a completed Cost Basis Edit Form
Marketplace accounts
  • Turnkey asset management provider (TAMP) and managed account master
  • Asset-based pricing Tooltip schedule name (if applicable
  • If the investment strategy does not trade options, but the money manager is approved to trade options: an approval letter from the money manager acknowledging options are associated with the account. Note, the managed account master and any sub link accounts will also need to be approved for options trading.

To open a managed account using eAuthorization: 

  1. Go to the Account Management tab and choose the Open and fund an account button under the Digital workflows header.
  2. You will see a screen listing all the account types that can be completed with the digital onboarding workflow. Click Open and Fund an account.
  3. Select the client(s) you are opening the account for so they can be added to the digital envelope. You can also add a new-to Schwab client. Once the client(s) has been added, proceed to the next step.
  4. Select or confirm the master account. You will have to choose your Select, Access, or Marketplace master for the managed account options to populate. 
    Note: Eligible authorizations tied to the selected FA master (such as options trading, wrap fee billing) will automatically be available for the digital envelope. If you do not see Managed Account options as a selection after choosing a master account, your firm has not signed the necessary agreements. See How to set up a managed account master.
    • For Marketplace: Click Yes, from Managed Account Marketplace® under Will you be assigning a money manager for separately managed accounts. Add the money manager and investment strategy, then choose from the available account types. Check the checkbox to link BT or SL master accounts, then click View/Edit to select the accounts that should have access. 
    • For Select/Access: Select the appropriate program (Select or Access) under Which managed account program will you use? Add the money manager and investment strategy, then choose from the available account types.
  5. Assign the primary and additional account holder roles, adding more account holders as needed. Choose the additional features you want to add to the account. You will make these selections for each account to be included in the digital envelope. 
  6. If you are opening only one account in the digital envelope, you will proceed to the account features and preferences step. If you want to add more accounts to the envelope, click the Add another account link. 
    • For each account in the envelope, you will repeat the previous steps of selecting the master account, account type, account holder roles, and features and funding options. 
  7.  Next you will complete the required information and select features for each account you have added including trading and disbursement authorizations, management fees, and other important information about the account. 
    Note: For Select and Access accounts, management fees and issuer communications will default and cannot be amended.
  8. On the next screen, you will review the managed account details and if you are using a trading master account choose whether advisor authorization to add, change, or remove a money manager should be added to the account. Non-trading masters will not get this option. 
  9. On the review screen, validate all the account information and click continue. 
  10. Add any advisor documents for client signature and/or review and proceed to the next step.
  11. Finalize and review the envelope. Select whether you would like to receive status notifications and if you’d like to review the envelope before submitting to Schwab. Once reviewed, send to client. 
  12. You will receive a confirmation screen. Choose whether to open another account, return to Account Management or go to the manage Schwab envelopes page. 
  13.  For next steps see the What can my client expect? and What’s Next section of How to use digital onboarding for eAuthorization.

eAuthorization is the preferred and fastest method for account opening. To open a managed account using forms, see information below.

  1. Go to the Forms library on Schwab Advisor Center.
  2. Click select then open the form using the preferred submission method.

    Select or Access managed accounts
    • Managed Account Select/Access IRA Application
    • Options Trading and Margin Application (if the chosen investment strategy uses options)
    Marketplace managed accounts
    • Managed Account Marketplace IRA Application
    • Asset Based Pricing Addendum to Account Applications and Agreements (if applicable)
    • Options Trading and Margin Application (if the chosen investment strategy uses options)
    Marketplace managed accounts using TAMPs
    • Managed Account Marketplace TAMP IRA Application
    • TAMP Asset-Based Pricing (ABP) Addendum (if applicable)
    • Options Trading and Margin Application (if the chosen investment strategy uses options)
  3. Complete the forms and obtain client signatures:
    • For DocuSign eligible forms, see How to use DocuSign.
    • For forms not eligible for DocuSign, print and obtain signatures from each account holder. Send the signed forms to the Schwab Managed Account Operations via a Schwab Advisor Center service request, fax, or mail.
East CoastWest Coast
Fax: 877-828-1176Fax: 877-815-3479
Regular mail:
Charles Schwab & Co., Inc.
Attn: Managed Account Operations
P.O. Box 2380
Omaha, NE 68103
Regular mail:
Charles Schwab & Co., Inc.
Attn: Managed Account Operations
P.O. Box 982603
El Paso, TX 79998-2603
Overnight mail:
Charles Schwab & Co., Inc.
Attn: Managed Account Operations 
200 S 108th Ave
Omaha, NE 68154
Overnight mail:
Charles Schwab & Co., Inc.
Attn: Managed Account Operations
1945 Northwestern Drive
El Paso, TX 79912-1108

Once you have submitted your Roth IRA account request:

  • If the account was opened using eAuthorization for Digital Onboarding, see the What can my client expect? and What’s next section of How to use digital onboarding for eAuthorization.
  • Schwab will notify you with an alert when the account is opened, usually within three business days after Schwab receives the forms. Schwab may contact you for additional documentation or information after completing an initial review. Forms with missing information, signatures, or dates can result in processing delays.
  • Your firm receives an alert when the account is opened and restricted. The restricted account can be funded; however, Schwab's recommendation is to wait until after the initial account has completed the customer verification process Tooltip so funds are available to the client.
  • Select and Access accounts must be funded to meet the money manager's account minimum; if this has not been met, then the money manager will not be added to the account.
  • If you have been granted Add, Change, or Terminate a Manager Authorization by the account holder, and you would like to delay the designation of a money manager, you have 180 days from the date the form is signed to provide Schwab with the designated money manager's information. If you provide Schwab with the necessary information within that time period, Schwab will open the account and provide the designated money manager(s) authorizations for the account, as outlined in the account agreement.
  • The account holder should consult with their tax advisor if they have any questions about taxability or filing.
  • If the forms were submitted using DocuSign, see the What's next? section of How to use DocuSign.
  • If you have questions about opening a Roth IRA on the managed account platform, contact the Managed Account Operations at 877-595-6345 or via a Schwab Advisor Center service request.
To select a form, go to the Forms library on Schwab Advisor Center.
Form: Cost Basis Edit Form
Form: Managed Account Asset Based Pricing Addendum to Account Applications and Agreements
Form: Managed Account Marketplace IRA Application
Form: Managed Account Marketplace TAMP IRA Application
Form: Managed Account Select/Access IRA Application
Form: Managed Account TAMP Asset-Based Pricing (ABP) Addendum 
Form: Power of Attorney (Individual POA)
Resource: Money Managers tab
Resource: Managed Account Access Overview tab
Resource: Managed Account Select Overview tab
Resource: Managed Account Select® and Managed Account Access® Strategies
Resource: Managed Account Solutions Brochure

Is there a minimum amount required to open a Roth IRA in a managed account?
Yes. Unlike Roth IRAs opened in a brokerage account, managed accounts have required minimums for opening the account. You can find the required account minimums for Select on the Managed Account Select Overview tab and for Access accounts on the Managed Account Access Overview tab on Schwab Advisor Center.

For Marketplace accounts, contact the money manager directly to determine if an account minimum is required.

Are Roth IRA contributions in a managed account tax-deductible?
In this regard, a contribution to a managed account IRA is not different from an IRA in a regular brokerage account. Whether the account holder's contribution is tax-deductible depends on their income level.

When is the deadline to fund a Roth IRA and apply contributions to a specific tax year?
For tax deadlines, the account holder should consult with their tax advisor.

Can my client do a partial conversion from a traditional to a Roth IRA?
Yes, partial conversions are permitted.

Can my client contribute to a Roth IRA and a traditional IRA in the same year?
Yes. However, the total contribution cannot exceed the annual contribution limit (including catch-up contributions). If your client is ineligible to make the full contribution to the Roth due to the client's modified adjusted gross income, the remaining amount can be contributed to the traditional IRA.

Can I open a managed account Roth IRA on behalf of a minor?
Yes. Refer to the How to open a custodial IRA page for more information on opening an IRA for the benefit of a minor and then talk to a member of the Managed Account Operations.

What if a money manager has not been designated on a managed account within 180 days?
The account holder will be required to submit a new form to open the account.

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. 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 the Managed Account Operations at 877-595-6345 or via a Schwab Advisor Center service request.

How to convert a non-managed account to the managed account platform
How to deposit securities
How to open a Roth IRA
How to open a traditional IRA on the managed account platform
How to select investment strategies for managed accounts
How to setup a managed account master
How to use DocuSign®
Introduction to managed accounts
Introduction to Roth IRAs

Services available on the turnkey asset management platform (TAMP) may vary depending on which provider you choose. Charles Schwab & Co., Inc. ("Schwab") does not recommend or endorse any particular provider. Schwab is not affiliated with any of the providers available in Managed Account Marketplace® ("Marketplace"). Schwab makes no representation or warranty about any provider or its suitability for your clients. Schwab does not guarantee the accuracy of the information about the services offered by any particular provider.

The Schwab Center for Financial Research ("SCFR") is a division of Charles Schwab & Co., Inc. ("Schwab") that evaluates money managers (MMs) in Schwab's Managed Account Select ("Select") program. The Select program is sponsored by Schwab. Schwab does not provide advice or recommendations regarding managed account strategies or MMs to investment advisors or their clients.

Schwab does not provide legal, tax, or compliance advice. Consult professionals in these fields to address your specific circumstance.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the options disclosure document titled Characteristics and Risks of Standardized Options before considering any option transaction. 

DocuSign and the DocuSign logo are trademarks or registered trademarks of DocuSign, Inc. in the United States and/or other countries.

Adobe Reader and Adobe Acrobat are registered trademarks or trademarks of Adobe in the United States and/or other countries.

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 MMs 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.

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.

(1123-3YRH)