On Jan 14, 2021, at 10:51 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:

On Jan 14, 2021, at 1:12 PM, Jan Neuenschwander via bivio.com <user*29006800001@bivio.com> wrote:

Generally speaking, the one thing I'd like to understand is what's driving all of the bureacracy surrounding investment clubs at these financial institutions: 1) federal requirements that were at least partially the result of post 9/11 decisions and how terrorists were able to fund their activities, 2) business decisions to discourage investments clubs because they are comparatively expensive to manage in relation to the revenue they generate for the institution.

On Thursday, January 14, 2021, 11:12:38 AM CST, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Because of the Folio problem we too decided to move to TDA.

We submitted our app on 12/24 and we are still working on it.

Do not fill out section 8 of the new account application as it is not for investment clubs and it will only lead to problems.

Last Friday, Jan.8, we were told everything (finally) was correct and our app just needed one more level of approval.

Today, because we had filled out section 8, we were told we need to submit a new application without section 8 filled out.

I am seriously wondering if TDA is worth all this effort.

Bob Shaw

President

Classic Strategy Investment Club

On Jan 14, 2021, at 11:47 AM, Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Ain't that the truth. To transfer an account to TDA I had to submit 22 pages: the application, the External Transfer Form and a copy of the statement from our previous broker.

One thing I wish they would do...no, two things: 1) Simplify the form and make it appropriate to an Investment Club and 2) Create a single page Change of Officer Form which can be mailed or faxed or a scanned form attached to an email.

Linda Glein

Puget Sound Chapter

Treasurer of two clubs

Linda

On Wed, Jan 13, 2021 at 6:34 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

Right I thought that was pretty funny--"The Complex Business Support Team". There ain't nothin' complex about an investment club--the complexity is caused by overzealous attorneys who can't figure it out.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 9:20 PM John Rice via bivio.com <user*24380400001@bivio.com> wrote:

She didn't answer your question on how much Schwab charges to write the checks. What a joke the " Complex Business Support Team (CBST)". It is only complex because they make it complex.

John

On Wed, Jan 13, 2021 at 4:05 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

And the deal is closed: " The Charles Schwab Corporation and the TD Ameritrade Holding Corporation have entered into a definitive agreement for Schwab to acquire TD Ameritrade in a stock transaction valued at approximately $26 billion, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019."

The question not finalized is how everything is going to be absorbed.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 1:43 PM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

Schwab has a bank. Are you sure you can't have a Schwab bank account associated with a club brokerage account? You can for personal brokerage accounts. Laurie Frederiksen Invest with your friends! www.bivio.com Become our Facebook friend! www.facebook.com/bivio Follow us on twitter! www.twitter.com/bivio Follow Us on Google+ Click here to Subscribe to the Club Cafe email list. Click here to Unsubscribe

On Thu, Jan 14, 2021 at 11:34 AM Margaret Wentworth via bivio.com <user*25964300001@bivio.com> wrote:

Peter,

I thank you for sharing your chat with customer service. We have not had a bank account since we moved to TD Waterhouse many years ago. The prospect of needing one leads me to conclude that I need to explore other options.

Thanks for the heads up.

Peg Wentworth,

Women's Investment Network

On Thu, Jan 14, 2021 at 8:12 AM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

Mark Eckman--You are correct. What I do know is what their new account managers are being told to tell people who ask what is going to happen. I wanted to share that information. I am sure nothing yet is written in stone, but I think everyone is learning as we go along. My feeling is that Schwab will not be as easy to use as TDA has been and if any club is not comfortable with that, the club might want to investigate other brokers.

Peter Dunkelberger

On Thu, Jan 14, 2021 at 7:54 AM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

Sorry, I misspoke, but the issue is still you have no idea what will happen and at this point, Schwab probably does not have a clear idea either. Integration of the firms has begun, but nothing has been communicated that explains what the integration will mean to any customer.

Mark Eckman

On Wed, Jan 13, 2021 at 6:05 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

And the deal is closed: " The Charles Schwab Corporation and the TD Ameritrade Holding Corporation have entered into a definitive agreement for Schwab to acquire TD Ameritrade in a stock transaction valued at approximately $26 billion, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019."

The question not finalized is how everything is going to be absorbed.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 1:43 PM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

--

Mark Eckman

Our club (a general partnership) is with Schwab. When I took over as treasurer Schwab sent me a new book of check that included my name. I have written a few checks a year since, mostly to reimburse myself for expenses that I have paid by credit card and to payout member withdrawals. As far as I know, I could also write checks to anyone.

Regards,

Jeff Rauch, Treasurer

SCSC Investment Club

Sent from my iPhone

On Jan 13, 2021, at 1:43 PM, Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:



You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman



Jeff Rauch:  Is your account on which you write checks separate from the investment account?  For example, TDA takes our deposits and shows us how much cash there is in the account.  When we buy stocks, TDA uses that cash.  We do not have to transfer cash from our cash account to the investment account.  Is that how your cash account works?  Or do you have to transfer cash from your bank account to the investment account to buy stock?

What paperwork did you complete to get the new checks with your name on them?

Thanks,

Peter Dunkelberger

On Wed, Jan 13, 2021 at 2:24 PM Jeff Rauch via bivio.com <user*37506900001@bivio.com> wrote:

Our club (a general partnership) is with Schwab. When I took over as treasurer Schwab sent me a new book of check that included my name. I have written a few checks a year since, mostly to reimburse myself for expenses that I have paid by credit card and to payout member withdrawals. As far as I know, I could also write checks to anyone. 

Regards,

Jeff Rauch, Treasurer 

SCSC Investment Club 

Sent from my iPhone

On Jan 13, 2021, at 1:43 PM, Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:



You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature? 

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA. 

My takeaway:

1.  New applications for investment clubs  (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.  

2,  For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist.  Schwab will write checks, but only to accounts with similar registrations.  That is, checks to a bank or to Schwab account holders.  So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2.  For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club.  Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee.  This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion.  I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning.  I had to wait about 15 minutes for the chat to start.  You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is  10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting.  The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting.  The "approval" process did not excite me at all.  They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

The cash is a seamless component of our account like your TDA account. When I make a trade the money goes into/out of the cash account. New Investments are deposited directly into the cash account. Checks are drawn directly out of the cash account. We choose to only make withdrawals as cash (by check), keeps accounting simple.

We have had our account with Schwab for around 20 yrs, so we're set up long before I became treasurer 3 yrs ago. At which time I just ask an agent for new checks. Oh yeah, I should mention that it took about 2 months before ~20 pgs of documents were complete, approved and they recognized me as an "authorized person". Then I asked for checks.

Regards,

Jeff

Sent from my iPhone

On Jan 14, 2021, at 9:13 PM, Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:



Jeff Rauch: Is your account on which you write checks separate from the investment account? For example, TDA takes our deposits and shows us how much cash there is in the account. When we buy stocks, TDA uses that cash. We do not have to transfer cash from our cash account to the investment account. Is that how your cash account works? Or do you have to transfer cash from your bank account to the investment account to buy stock?

What paperwork did you complete to get the new checks with your name on them?

Thanks,

Peter Dunkelberger

On Wed, Jan 13, 2021 at 2:24 PM Jeff Rauch via bivio.com <user*37506900001@bivio.com> wrote:

Our club (a general partnership) is with Schwab. When I took over as treasurer Schwab sent me a new book of check that included my name. I have written a few checks a year since, mostly to reimburse myself for expenses that I have paid by credit card and to payout member withdrawals. As far as I know, I could also write checks to anyone.

Regards,

Jeff Rauch, Treasurer

SCSC Investment Club

Sent from my iPhone

On Jan 13, 2021, at 1:43 PM, Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:



You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

I just spoke with a representative at Schwab about the TDA transfer to Schwab. The person that I spoke with has handled a number of mergers of companies with Schwab. He said if you want to make the switch earlier you can do it, but it is a more time consuming process. What has happened in the past is that the switch generally happens on a 3 day weekend. On Friday, you would be TDA and then on Tuesday you would wake up as Schwab. If you want more information or want to make the transition early, call customer service at Schwab and they will connect you to someone at Schwab that is part of the team dealing with the merging of TDA and Schwab.

Hopefully that helps.

Amy Carlson

Its Relative Investment club

I would suspect that there have been some unhappy members at some clubs and, investing being what it is, the details were more complicated than the members thought. they sued, and the brokerages were on the short end. That is just a guess. But when you get to online access with multiple people, things can go awry.

Peter Dunkelberger

On Thu, Jan 14, 2021 at 12:39 PM Daniel Williams via bivio.com <user*33673100001@bivio.com> wrote:

Generally speaking, the one thing I'd like to understand is what's driving all of the bureacracy surrounding investment clubs at these financial institutions: 1) federal requirements that were at least partially the result of post 9/11 decisions and how terrorists were able to fund their activities, 2) business decisions to discourage investments clubs because they are comparatively expensive to manage in relation to the revenue they generate for the institution.

On Thursday, January 14, 2021, 11:12:38 AM CST, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Because of the Folio problem we too decided to move to TDA.

We submitted our app on 12/24 and we are still working on it.

Do not fill out section 8 of the new account application as it is not for investment clubs and it will only lead to problems.

Last Friday, Jan.8, we were told everything (finally) was correct and our app just needed one more level of approval.

Today, because we had filled out section 8, we were told we need to submit a new application without section 8 filled out.

I am seriously wondering if TDA is worth all this effort.

Bob Shaw

President

Classic Strategy Investment Club

On Jan 14, 2021, at 11:47 AM, Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Ain't that the truth. To transfer an account to TDA I had to submit 22 pages: the application, the External Transfer Form and a copy of the statement from our previous broker.

One thing I wish they would do...no, two things: 1) Simplify the form and make it appropriate to an Investment Club and 2) Create a single page Change of Officer Form which can be mailed or faxed or a scanned form attached to an email.

Linda Glein

Puget Sound Chapter

Treasurer of two clubs

Linda

On Wed, Jan 13, 2021 at 6:34 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

Right I thought that was pretty funny--"The Complex Business Support Team". There ain't nothin' complex about an investment club--the complexity is caused by overzealous attorneys who can't figure it out.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 9:20 PM John Rice via bivio.com <user*24380400001@bivio.com> wrote:

She didn't answer your question on how much Schwab charges to write the checks. What a joke the " Complex Business Support Team (CBST)". It is only complex because they make it complex.

John

On Wed, Jan 13, 2021 at 4:05 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

And the deal is closed: " The Charles Schwab Corporation and the TD Ameritrade Holding Corporation have entered into a definitive agreement for Schwab to acquire TD Ameritrade in a stock transaction valued at approximately $26 billion, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019."

The question not finalized is how everything is going to be absorbed.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 1:43 PM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

Please offer names of companies suitable to worki with Bivio,

other than Schwab.

Thank you

Phyllis Wigham

On Fri, Jan 15, 2021 at 5:59 PM Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Although I also had an issue and had to resubmit our application to TDA, when I called for help there was hardly any wait time at all, and they were extremely pleasant and helpful.

I suggest everyone give them the feedback that they need to 1)Develop an application form specific to Investment Clubs and 2) Create a single page Officer Change Form for Investment Clubs. The happier they make the Investment Clubs the better for them.

Linda Glein

On Thu, Jan 14, 2021 at 5:58 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I would suspect that there have been some unhappy members at some clubs and, investing being what it is, the details were more complicated than the members thought. they sued, and the brokerages were on the short end. That is just a guess. But when you get to online access with multiple people, things can go awry.

Peter Dunkelberger

On Thu, Jan 14, 2021 at 12:39 PM Daniel Williams via bivio.com <user*33673100001@bivio.com> wrote:

Generally speaking, the one thing I'd like to understand is what's driving all of the bureacracy surrounding investment clubs at these financial institutions: 1) federal requirements that were at least partially the result of post 9/11 decisions and how terrorists were able to fund their activities, 2) business decisions to discourage investments clubs because they are comparatively expensive to manage in relation to the revenue they generate for the institution.

On Thursday, January 14, 2021, 11:12:38 AM CST, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Because of the Folio problem we too decided to move to TDA.

We submitted our app on 12/24 and we are still working on it.

Do not fill out section 8 of the new account application as it is not for investment clubs and it will only lead to problems.

Last Friday, Jan.8, we were told everything (finally) was correct and our app just needed one more level of approval.

Today, because we had filled out section 8, we were told we need to submit a new application without section 8 filled out.

I am seriously wondering if TDA is worth all this effort.

Bob Shaw

President

Classic Strategy Investment Club

On Jan 14, 2021, at 11:47 AM, Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Ain't that the truth. To transfer an account to TDA I had to submit 22 pages: the application, the External Transfer Form and a copy of the statement from our previous broker.

One thing I wish they would do...no, two things: 1) Simplify the form and make it appropriate to an Investment Club and 2) Create a single page Change of Officer Form which can be mailed or faxed or a scanned form attached to an email.

Linda Glein

Puget Sound Chapter

Treasurer of two clubs

Linda

On Wed, Jan 13, 2021 at 6:34 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

Right I thought that was pretty funny--"The Complex Business Support Team". There ain't nothin' complex about an investment club--the complexity is caused by overzealous attorneys who can't figure it out.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 9:20 PM John Rice via bivio.com <user*24380400001@bivio.com> wrote:

She didn't answer your question on how much Schwab charges to write the checks. What a joke the " Complex Business Support Team (CBST)". It is only complex because they make it complex.

John

On Wed, Jan 13, 2021 at 4:05 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

And the deal is closed: " The Charles Schwab Corporation and the TD Ameritrade Holding Corporation have entered into a definitive agreement for Schwab to acquire TD Ameritrade in a stock transaction valued at approximately $26 billion, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019."

The question not finalized is how everything is going to be absorbed.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 1:43 PM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

--

Phyllis Wigham

Madison, CT

E*Trade. I liked them so much I bought their stock.

Lee Weygandt

On 1/17/2021 9:08 AM, Phyllis Wigham via bivio.com wrote:

Please offer names of companies suitable to worki with Bivio,

other than Schwab.

Thank you

Phyllis Wigham

On Fri, Jan 15, 2021 at 5:59 PM Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Although I also had an issue and had to resubmit our application to TDA, when I called for help there was hardly any wait time at all, and they were extremely pleasant and helpful.

I suggest everyone give them the feedback that they need to 1)Develop an application form specific to Investment Clubs and 2) Create a single page Officer Change Form for Investment Clubs. The happier they make the Investment Clubs the better for them.

Linda Glein

On Thu, Jan 14, 2021 at 5:58 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I would suspect that there have been some unhappy members at some clubs and, investing being what it is, the details were more complicated than the members thought. they sued, and the brokerages were on the short end. That is just a guess. But when you get to online access with multiple people, things can go awry.

Peter Dunkelberger

On Thu, Jan 14, 2021 at 12:39 PM Daniel Williams via bivio.com <user*33673100001@bivio.com> wrote:

Generally speaking, the one thing I'd like to understand is what's driving all of the bureacracy surrounding investment clubs at these financial institutions: 1) federal requirements that were at least partially the result of post 9/11 decisions and how terrorists were able to fund their activities, 2) business decisions to discourage investments clubs because they are comparatively expensive to manage in relation to the revenue they generate for the institution.

On Thursday, January 14, 2021, 11:12:38 AM CST, Robert Shaw via bivio.com <user*27509400001@bivio.com> wrote:

Because of the Folio problem we too decided to move to TDA.

We submitted our app on 12/24 and we are still working on it.

Do not fill out section 8 of the new account application as it is not for investment clubs and it will only lead to problems.

Last Friday, Jan.8, we were told everything (finally) was correct and our app just needed one more level of approval.

Today, because we had filled out section 8, we were told we need to submit a new application without section 8 filled out.

I am seriously wondering if TDA is worth all this effort.

Bob Shaw

President

Classic Strategy Investment Club

On Jan 14, 2021, at 11:47 AM, Linda Glein via bivio.com <user*21345500001@bivio.com> wrote:

Ain't that the truth. To transfer an account to TDA I had to submit 22 pages: the application, the External Transfer Form and a copy of the statement from our previous broker.

One thing I wish they would do...no, two things: 1) Simplify the form and make it appropriate to an Investment Club and 2) Create a single page Change of Officer Form which can be mailed or faxed or a scanned form attached to an email.

Linda Glein

Puget Sound Chapter

Treasurer of two clubs

Linda

On Wed, Jan 13, 2021 at 6:34 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

Right I thought that was pretty funny--"The Complex Business Support Team". There ain't nothin' complex about an investment club--the complexity is caused by overzealous attorneys who can't figure it out.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 9:20 PM John Rice via bivio.com <user*24380400001@bivio.com> wrote:

She didn't answer your question on how much Schwab charges to write the checks. What a joke the " Complex Business Support Team (CBST)". It is only complex because they make it complex.

John

On Wed, Jan 13, 2021 at 4:05 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

And the deal is closed: " The Charles Schwab Corporation and the TD Ameritrade Holding Corporation have entered into a definitive agreement for Schwab to acquire TD Ameritrade in a stock transaction valued at approximately $26 billion, which represents a 17% premium over the 30-day volume weighted average price exchange ratio as of November 20, 2019."

The question not finalized is how everything is going to be absorbed.

Peter Dunkelberger

On Wed, Jan 13, 2021 at 1:43 PM Mark Eckman via bivio.com <user*24054700001@bivio.com> wrote:

You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?

Mark Eckman

On Wed, Jan 13, 2021 at 12:36 PM Peter Dunkelberger via bivio.com <user*26984900001@bivio.com> wrote:

I just spent about 45 minutes (15 of which were in a wait state) in an online chat with a Schwab "investment professional" about investment clubs and their legal structure about 1) new partnership/club accounts and 2) what to expect when we are transferred to Schwab from TDA.

My takeaway:

1. New applications for investment clubs (not current TDA clients) that don't have a legal structure like a partnership will be most likely not be accepted.

2, For existing TDA clients, the ability to obtain checks and write those checks directly to partners, etc., will not exist. Schwab will write checks, but only to accounts with similar registrations. That is, checks to a bank or to Schwab account holders. So it is very likely that current TDA clients, upon being transferred to Schwab, will need to have a separate bank account.

2. For new applicants, Schwab does not permit checks to be written on the partnership account directly by the club. Schwab will write the checks but only to similarly registered accounts, i.e., a bank or Schwab account owned by the payee. This means that new applicants will need a separate bank account to disburse funds directly to partners (in case of resignation of death, for example) or for other expenses to payees who do not have a Schwab account.

Below is a transcript of my discussion. I have not edited any portion of it so one will have to scroll down a fair amount to get to the beginning. I had to wait about 15 minutes for the chat to start. You will have to use the inside scroll bar to get through the discussion:

Chat Started

11:47 AM

System said

Getting Connected

11:47 AM

System said

Prospect Team Connected

11:47 AM

Prospect Team

Bot Prospect Team said

1/13/2021 Thank you for contacting Charles Schwab & Co., Inc. All interactions are subject to recordkeeping and monitoring. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Its banking subsidiaries, Charles Schwab Bank (member FDIC and an Equal Housing Lender), Charles Schwab Premier Bank (member FDIC) and Charles Schwab Trust Bank (member FDIC), provide deposit and lending services and products. Investment Products: Not FDIC Insured * No Bank Guarantee * May Lose Value

Bot Prospect Team said

Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes

11:47 AM

Peter

You said

I am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?

11:48 AM

Prospect Team

Bot Prospect Team said

We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

Bot Prospect Team said

Thank you for holding; we look forward to chatting with you!

12:03 PM

System said

Lori S Connected

12:03 PM

Lori S

Agent Lori S said

Hi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today

12:04 PM

Peter

You said

fine

12:04 PM

Lori S

Agent Lori S said

I am happy to help. While we do not offer accounts under the Investment Club designation, we do offer Organizational Brokerage accounts that can be opened for a partnership. These have a requirement of $250,000 in assets held at Schwab to qualify (new or existing)

Agent Lori S said

Would this be your first account with Schwab or do you hold existing accounts?

12:05 PM

Lori S

Agent Lori S said

We are happy to continue assisting you. If you have additional questions, comments, or needs, please send us what you have typed so far to ensure this chat session does not automatically disconnect. Thank you!

12:09 PM

Peter

You said

first account. The real question is whether Schwab accepts new registered partnerships (we meet the asset requirements) who have the word s "investment club" in their title.

12:09 PM

Lori S

Agent Lori S said

Great question. That depends on how it is organized. The Investment Club registration was retired in 2012 and we are no longer opening Investment Clubs with this registration. Subject to acceptance criteria, an Investment Club may be able to be opened using the registration that aligns with the entity legal formation (LLC, PA, CORP).

12:10 PM

Peter

You said

I am not sure what that means. We are an investment club with IRS EIN as a partnership.

12:12 PM

Lori S

Agent Lori S said

Here are the exception requirements if you have an investment club in the title or function as such:

Agent Lori S said

Investment Clubs

Accounts identified as Investment Clubs, defined as organizations comprised of a group of people who pool money to make investments in securities based on a majority vote of the members or beneficial owners will be accepted only after review by Schwab, if they meet the following criteria:

More than one agent with concurrent access and control on the Schwab account. Does not compensate any person for his or her role in selecting securities. Documents include a mechanism to proactively address a change in club membership, whether such change is due to death or other circumstances. Provides periodic statements to each of its members and has a process to provide an annual accounting of ownership to each of its members. Accounts that do not meet the criteria above may be accepted with approval from Business Review Council. Contact the CBST, for details.

Accounts identified as Investment Clubs will be subject to the following restrictions as enforced by the CBST, if accepted:

No checking or debit card features Distributions to like-registered accounts only

12:14 PM

Peter

You said

Does the partnership designated bypass those requirements? I do not see that as an exception. We meet all of the other requirements except we would want to be able to have Schwab write checks (or we write checks) out of the investment cash account.

You said

Sorry, I meant "does the partnership designation bypass those requirements?"

12:19 PM

Lori S

Agent Lori S said

It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership

Agent Lori S said

There are no exceptions to allow checks or a debit card on an account that operates as an investment club (even if the EIN is a partnership)

12:19 PM

Peter

You said

Interesting. We would send Schwab money but could not get it out?

12:20 PM

Lori S

Agent Lori S said

To clarify, you can get it out, you just can't have a checking feature where you write checks yourself. You can wire out funds, have Schwab issue a check, etc just keeping in mind that any distributions can only be to like-registered accounts only (example, a wire to a bank account in the name of the partnership/IC, a check made payable to the same registration on the Schwab account, etc)

12:21 PM

Peter

You said

OK. Does Schwab charge for the checks? And we have partners die/resign and we would write checks directly to the individual or estate. Could schwab do that directly or would we need a bank account for an intermediary?

12:23 PM

Lori S

Agent Lori S said

You would need to send funds out to a like-registered account if you are approved to hold the account at Schwab, as one of the rules if they do approve you would be that distributions can be made to like-registered accounts only which is enforced by the Complex Business Support Team (CBST) here at Schwab.

Agent Lori S said

The applications for organizational accounts can be found at the bottom of this page: https://www.schwab.com/organizational-accounts and it would be completed and then returned for review and if approved, the account is then opened. The document can be returned via mail or fax:

Agent Lori S said

Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998

FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108

Agent Lori S said

Fax: 888-526-7252

12:27 PM

Peter

You said

I am in a similar partnership/club with TDA. When we are transferred from TDA to Schwab, will we lose the ability to write checks directly (by requesting Schwab to write the check) to partners?

12:28 PM

Lori S

Agent Lori S said

Great question- they are still determining what things like that may look like after transition, but historically when accounts come over from another firm checking features do not carry over, so you would reapply at Schwab for a checking feature if allowed. If it is an investment club title registered as a partnership that comes over then the same rules above will still apply in that checks will not likely be allowed (unless there is a special exception in the future related to TD accounts, though we have been advised of no such exceptions as of current)

12:30 PM

Peter

You said

You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?

12:31 PM

Lori S

Agent Lori S said

You're Very Welcome! While we are not able to send a transcript, you can copy and paste into a word document to save or print that way.

12:32 PM

Peter

You said

Thanks and goodbye,

12:33 PM

Lori S

Agent Lori S said

It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!

12:33 PM

One of the reasons I did this was to see what happens if our partnership/club just moved over to Schwab now from TDA, rather than waiting. The transfer from Scottrade to TDA was not flawless, so I thought that perhaps we could just transfer now rather than waiting. The "approval" process did not excite me at all. They really have a thing about investment clubs, no matter what the legal structure is.

Peter Dunkelberger

Sumner Stock Selectors Investment Club

Virus-free. www.avg.com

--

Mark Eckman

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Phyllis Wigham

Madison, CT