New Business on Schwab
You’ll need a temporary Master Code for Schwab. This is different from any existing codes you may have from PCRA, and TAMP related masters, or even the one you probably recently received as part of the migration from TDA to Schwab. Schwab is requiring a new master because they want to isolate the business in transition from TDA as cleanly as possible to assist the process. They are allocating new codes in blocks and you’ll be contacted when we have a code for your use. After the September conversion you’ll be able to move any new accounts created now on Schwab to the main master code attached to your TDA accounts (post conversion). Keep in mind that you already have access to Schwab Advisor Center and all of the learning tools now.
Why do business early and how much should go there vs TDA between now and conversion?
- To learn the system
- To keep some clients from having to learn two websites
- You have business to write later in August (see below)
Why you may not want to do all your new business at Schwab before the transition:
- You really depend on iRebal and account setup in iRebal won’t be available in Schwab Advisor Center until conversion
- You already know all the TDA paperwork and want to stay as efficient as possible for as long as possible
The big reason we are giving you this opportunity is because both opening and servicing new accounts after mid-August is going to be difficult or impossible. There are some important dates to consider. Look at the Important Dates section of the Transition Planning Guide, pages 83-84 in particular:
- It won’t be possible to get account updates processed at TDA after Friday 8/18. Even money transfers received after 8/25 are not guaranteed to succeed.
- August 18th is also the last day to open new accounts at TDA, and that means TDA has finished the processing and opened the account by that date. So realistically we won’t be able to add new business to TDA after August 15th or thereabouts.
You can attempt to pre-load your summer business or put some clients off until after conversion if you’d like. We’d actually like as few accounts as possible that will require reassignment later but we certainly don’t want to impair your ability to bring in business either.
Digital Onboarding Tool Vs DocuSign
The Digital Onboarding Tool is a step up from the forms wizard in VeoOne but does not appear to be a DocuSign replacement for new business, particularly where the account being opening is a new relationship. It will be more useful for clients opening additional accounts or for forms that modify existing accounts. The digital onboarding tool does not allow for the inclusion of all HBW firm documents in such a way that they can be returned with signature (AIF or Risk Tolerance for example). It also doesn't allow for any modification to HBW docs by the client during the process. The system does not piggy-back on DocuSign but is more of a click to accept format.
DocuSign will be much like our TDA experience. Although they will now take both Schwab forms and HBW forms in the same envelope they discourage the practice and would prefer if we send two envelopes to each client for the most efficient processing time.
Schwab Alliance
Schwab Alliance is Schwab's version of TDA's Advisor Client. One very strange thing about it: clients with retail Schwab accounts must use their existing retail credentials when creating access. Yes, this also means that clients will see retail and IA managed accounts side by side within the website.
When looking at Schwab alliance keep in mind too that there are three different client access levels and the default is full access, including client trading. At least there are some appropriate warning that come up if the client begins to trade within the managed account. See the appropriate webinar or other web resource for more details.
Learning Schwab Advisor Center
The starting point for everything listed below is https://welcomeadvisors.schwab.com/
To register for future webinars
The major sources of information and you get acclimated to the Schwab Platform as I see them are as follows:
Transition Planning Guide – the reference guide to technical questions regarding which data are and are not being migrated, a detailed comparison of platform features and important dates.
The Advisor Checklist – more of a topical guide with links to learning paths by category of task to be performed.
The Service Guide – at first glance this appeared too general in nature but in fact is a very good resource for technical questions about their website and capabilities. This link is to the topic index for Schwab Advisor Center itself.
Our New Business Support Team Prior to Transition
Schwab's support is phone first, and if you must attach documents use the Service Request web forms within SAC. There are many things they don't accept via email.
Some Transition Gotchas of Note
Retirement Account Withdrawals and Tax Withholding Elections for Retirement Accounts:
Schwab's system does not support more than one transaction at a time. This is plainly an unwelcome fact at the moment. They are planning on getting this feature added but we don't know when.
Qualified Charitable Donations (QCDs) are a distinct withdrawal type at Schwab. Look for it if doing these.
Tax Withholding Elections may not come over as expected due to differences between TDA and Schwab. This is something you must check when account data is fully migrated.
Client Authorizations made through the Advisor Client website:
Assume these won't move over to Schwab Alliance and that Client's will need to reinstate some authorizations.
One example would be a husband who as view access to his wife's account.
Another would be move money connections established by the client rather than expressly authorized for the advisor through the TDA move money form.
Trust Applications and Documents:
Most of you probably do this already but Trust accounts will require copies of the title and signature pages and in some cases additional pages when adding certain authorizations (such as options trading).
ACH at Schwab is slower than TDA:
Schwab is planning a switch from their system to the one used by TDA so this should get better fairly soon. For now though, expect bank transfers to be a bit slower than we're used to with TDA.
Separation of accounts and accounting:
Clients will receive two 1099s for the year. One from TDA and one from Schwab.
Cost basis will come over with accounts. Other transaction history will not, including record of any RMDs already taken this year from the accounts. Use the RMD report within VeoOne to download your RMD history.
That's it. Please direct your questions to me and I will direct you as needed.
Thanks
Joe
