Managed Account Platform Section

How to open a trust account on the managed account platform

How to open a trust account on the managed account platform

A trust is a fiduciary arrangement in which a trustor appoints a trustee to manage assets for the benefit of a beneficiary. You can open a Schwab Managed Account Select®  (Select) Tooltip , Managed Account Access®  (Access) Tooltip , or Managed Account Marketplace®  (Marketplace) Tooltip account for eligible trust registrations.

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

You can open trust accounts for clients who are new to Select, Access, or Marketplace using the account open account digital workflow available through the Account Management tab.

Required

All accounts
Select or Access account specifics

 

Conditional

Opening a funding accountFirm's non-managed account master
Funding the account through an internal transferClient's Schwab account number
Trust is tax-exemptProof of exempt status, such as a tax declaration letter
Trustee is an entityA completed Supplemental Trust Account Application for Entity Trustees
Opening a business/non-personal trust
  • Board meeting minutes appointing the individual(s) who will be acting in the trustee capacity on the account on behalf of the board of trustees or, if minutes are not available, a letter of authorization containing the same information, signed by all board members (notarization not required)
  • Organization Account Agreement (Contact Managed Account Operations for a copy of this form)
Opening a trust account for two trusts as tenants in common

Obtain the following information from Managed Account Operations:

  • Supplemental Account Application for Trusts as Tenants in Common form
  • Reference ID number

Any authorized individual or control person is:

  • Affiliated with or employed by a stock exchange
  • A member firm of an exchange or FINRA
  • A municipal securities broker-dealer and Rule 3210 applies
FINRA Rule 3210 Consent Letter
Managed account uses an investment strategy trading options
  • Options authorization Tooltip using a completed Options Trading and Margin Application
  • On the Select or Access requirements and disclosure documents table, investment strategies using options will have an options note in the Additional Information section
Adding the account to an existing quarterly trade confirmation report subscriptionThe Schwab account number(s) in the existing subscription
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)
Electing to group Schwab accounts for fee calculation purposesAffected Schwab account numbers
Securities are used to fund the account and are missing cost basisA completed Cost Basis Edit Form

Required

All accounts
Marketplace account specificsThe money manager's master account (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

Opening a funding accountFirm's non-managed account master
Funding the account through a journal entryClient's Schwab account number
Trust is tax-exemptProof of exempt status, such as a tax declaration letter
Trustee is an entityA completed Supplemental Trust Account Application for Entity Trustees
Opening a business/non-personal trust
  • Board meeting minutes appointing the individual(s) who will be acting in the trustee capacity on the account on behalf of the board of trustees or, if minutes are not available, a letter of authorization containing the same information, signed by all board members (notarization not required)
  • Organization Account Agreement (Contact Managed Account Operations for a copy of this form)
Opening a trust account for two trusts as tenants in common

Obtain the following information from Managed Account Operations:

  • Supplemental Account Application for Trusts as Tenants in Common form
  • Reference ID number

Any authorized individual or control person is:

  • Affiliated with or employed by a stock exchange
  • A member firm of an exchange or FINRA
  • A municipal securities broker-dealer and Rule 3210 applies
FINRA Rule 3210 Consent Letter
Managed account uses an investment strategy trading options
  • Options authorization Tooltip using a completed Options Trading and Margin Application
  • On the Select or Access requirements and disclosure documents table, investment strategies using options will have an options note in the Additional Information section
Adding the account to an existing quarterly trade confirmation report subscriptionThe Schwab account number(s) in the existing subscription
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)
Marketplace accounts
  • Turnkey asset management provider (TAMP) and managed account master (if applicable)
  • Asset-based pricing Tooltip schedule name (if applicable)
The investment strategy does not trade options, but the money manager is approved to trade optionsAn approval letter from the money manager acknowledging that options are associated with the account

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

  1. Go to the Forms library on Schwab Advisor Center and select the forms below that apply to your managed account.
  2. Click Select and then open the form using your preferred submission method.

    Select or Access managed accounts
    • Managed Account Select/Access Account Application for Trusts
    • Options Trading and Margin Application (if the chosen investment strategy uses options)
    Marketplace accounts
    • Managed Account Marketplace Account Application for Trusts
    • 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 Account Application for Trusts  
    • 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 signatures:
    • For DocuSign eligible forms, see How to use DocuSign.
    • For forms not eligible for DocuSign, print the forms and obtain signatures from each account holder. Send the signed forms to 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 trust 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.
  • If forms were submitted using DocuSign, see the What's next? section of How to use DocuSign.
  • Schwab will notify you with an alert when the account is opened, usually within three business days after Schwab receives the request. 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 that 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.
  • Schwab sends a confirmation letter to the address of the trust and any trustees, notifying them of the new account. The trust address will be the mailing address of the primary trustee, as determined by your client.

If you have questions about opening a trust account on the managed account platform, contact Managed Account Operations at 877-595-6345 or via a Schwab Advisor Center service request.

Go to the Forms library on Schwab Advisor Center and select the forms below.

Form: Cost Basis Edit Form
Form: Limited Power of Attorney (Investment Advisor LPOA)
Form: Managed Account Asset Based Pricing Addendum to Account Applications and Agreements
Form: Managed Account Marketplace Account Application for Trusts
Form: Managed Account Marketplace TAMP Account Application for Trusts
Form: Managed Account Select/Access Account Application for Trusts
Form: Managed Account TAMP Asset-Based Pricing (ABP) Addendum
Form: Options Trading and Margin Application
Form: Supplemental Trust Account App for Entity Trustees
Form: Transfer of Account Form Instructions (TOA / Account Transfer)
Resource: Trust glossary

Can I open a fiduciary type of trust account at Schwab for my client?
No. Schwab Advisor Services™ no longer opens fiduciary trust accounts.

Why does Schwab require submission of the pages from the trust document? Will that show establishment of the trust?
Schwab uses the requested pages to verify the trust's name and existence. Unlike organizations whose existence can be verified through a variety of online resources, a trust can only be verified by reviewing specific pages of the actual trust document (or for domestic revocable trusts only, the entire Certification of Trust). Only those specific pages are required because Schwab does not need to know the terms of the trust document.

Why is Schwab asking for information on the grantor, source of funding, and purpose of account?
Schwab requests this information because of heightened regulatory scrutiny. Information on the grantor helps determine the source of funds. Often the grantor will also be a trustee, but in the event the grantor is deceased or someone other than a trustee, Schwab needs to collect the basic information on who created the trust.

Why do the trustee signatures need to be notarized for "other revocable" trust types when they are considered "revocable"?
Trustee signatures should be notarized for all trust account types, with the exception of a revocable trust, which lists the same person(s) as the grantor, trustee, and beneficiary. These accounts are treated similarly to an individual account because the same person (or persons) owns every aspect of the trust.

Will income be earned on any cash in the account that is not invested?
Yes. View the Cash Features Disclosure Statement for more information.

How can I submit the trust forms to Schwab?
The type of trust will determine which method you use to open the trust account:  

  • How to open a trust account using Digital Onboarding- for a revocable or irrevocable living trust.
  • How to open a trust account using paper forms—Use for any type of trust.
  • How to open a revocable living trust account using DocuSign—Use only for a revocable living trust when the current grantor(s), trustee(s), and beneficiaries are the same person(s).

Can any type of account be opened as a managed account?
No. Select and Access 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. Please 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.

How to add an additional managed account, or change or terminate a money manager
How to convert a non-managed account to the managed account platform
How to deposit checks
How to deposit securities
How to open a trust account
How to select investment strategies for managed accounts
How to set up a managed account master
How to use DocuSign®
Introduction to managed accounts
Introduction to the managed accounts communications library
Introduction to submitting client documents

TAMP services may vary depending on which TAMP provider 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, ETF, fixed income and fixed income ladder. Assets in equity investment strategies are charged according to the applicable fee schedule category (i.e., regular equity strategies, index-based strategies, or ThomasPartners Strategies). Diversified Portfolios, Master Limited Partnership ("MLP") strategies, options-based, and balanced strategies are charged according to the regular equity fee schedule. Corporate bond ladder, preferred stock and convertible bond strategies are charged according to the fixed income fee schedule. Schwab charges the combined assets of grouped managed accounts with equity strategies in the following order according to the applicable fee schedule category: (i) accounts with equity strategies (other than index-based strategies, if any); (ii) accounts with index-based strategies (if any); and (iii) accounts invested in the ThomasPartners Strategies. **ERISA accounts can only be grouped with other ERISA accounts of identical registration.

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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. With long options, investors may lose 100% of funds invested. Covered calls provide downside protection only to the extent of the premium received and limit upside potential to the strike price plus premium received.

Multiple-leg options strategies will involve multiple commissions. Spread trading must be done in a margin account.

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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.

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