TDA to Schwab transfer
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 AMGetting Connected
11:47 AMProspect Team Connected
11:47 AM1/13/2021 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
Welcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
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?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Lori S Connected
12:03 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
fine
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)
Would this be your first account with Schwab or do you hold existing accounts?
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!
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.
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).
I am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
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
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.
Sorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
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)
Interesting. We would send Schwab money but could not get it out?
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)
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?
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.
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:
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
Fax: 888-526-7252
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?
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)
You are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
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.
Thanks and goodbye,
It has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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
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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club
Mark Eckman
I would agree, but it is interesting to know the current business practices and what the reps are being told now. If your brokerage has done very well with not letting investment organizations write checks to whomever, what is the likelihood of your giving this small (albeit vocal) subset of clients a different schema? Or, if enough people beat on the walls, maybe things will be different. But I do know now what would happen if I walked our partnership from TDA to Schwab today. And one would think it would be the same 6 months from now.
Peter Dunkelberger
You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--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 EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
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
You don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
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
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.JohnOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
Mark Eckman
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
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 EckmanOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman--Mark Eckman
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 DunkelbergerSorry, 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 EckmanOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman--Mark Eckman
Complex also refers to a place.
On Thu, Jan 14, 2021 at 8:34 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 NetworkOn 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 DunkelbergerSorry, 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 EckmanOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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: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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman--Mark Eckman
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.
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 DunkelbergerShe 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.JohnOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
|
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 NetworkOn 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 DunkelbergerSorry, 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 EckmanOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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
11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes
11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?
We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
Thank you for holding; we look forward to chatting with you!
12:03 PMThank you for holding; we look forward to chatting with you!
Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today
12:04 PMfine
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)
12:05 PMWould this be your first account with Schwab or do you hold existing accounts?
12:09 PMWe 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 PMfirst 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.
12:10 PMGreat 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).
12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.
Here are the exception requirements if you have an investment club in the title or function as such:
12:14 PMInvestment 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
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.
12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"
It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership
12:19 PMThere 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)
12:20 PMInteresting. We would send Schwab money but could not get it out?
12:21 PMTo 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)
12:23 PMOK. 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?
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.
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:
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
12:27 PMFax: 888-526-7252
12:28 PMI 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?
12:30 PMGreat 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)
12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?
12:32 PMYou'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.
12:33 PMThanks and goodbye,
12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!
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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman--Mark Eckman
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 GleinPuget Sound ChapterTreasurer of two clubsLindaOn 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 DunkelbergerShe 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.JohnOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMGetting Connected11:47 AMProspect Team Connected11:47 AM1/13/2021 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 Value11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutes11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?We thank you for holding and apologize about the wait. Our agents are currently assisting other investors. We look forward to joining you soon!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!At the moment our average wait time is 10-15 minutes. We appreciate your patience and will join you as soon as possible!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!Thank you for holding; we look forward to chatting with you!12:03 PMThank you for holding; we look forward to chatting with you!Lori S Connected12:03 PM12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well today12:04 PMfineI 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)12:05 PMWould this be your first account with Schwab or do you hold existing accounts?12:09 PMWe 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 PMfirst 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.12:10 PMGreat 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).12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.Here are the exception requirements if you have an investment club in the title or function as such:12:14 PMInvestment ClubsAccounts 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 onlyDoes 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.12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"It does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnership12:19 PMThere 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)12:20 PMInteresting. We would send Schwab money but could not get it out?12:21 PMTo 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)12:23 PMOK. 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?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.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:Standard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-110812:27 PMFax: 888-526-725212:28 PMI 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?12:30 PMGreat 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)12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?12:32 PMYou'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.12:33 PMThanks and goodbye,12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman
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 GleinPuget Sound ChapterTreasurer of two clubsLindaOn 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 DunkelbergerShe 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.JohnOn 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 DunkelbergerYou don't believe that any discussion with Schwab about what will happen to TDA accounts until after the deal closes is premature?Mark EckmanOn 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 Started11:47 AMSystem saidGetting Connected11:47 AMSystem saidProspect Team Connected11:47 AMProspect TeamBot Prospect Team said1/13/2021 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 ValueBot Prospect Team said11:47 AMWelcome to Charles Schwab chat. A Schwab investment professional will be with you shortly. Your estimated wait time is...15-20 minutesPeterYou said11:48 AMI am responsible for choosing a broker for my partnership, which also happens to be an investment club. Is Schwab accepting new partnerships as clients?Prospect TeamBot Prospect Team saidWe 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 saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidAt 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 saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team saidThank you for holding; we look forward to chatting with you!Bot Prospect Team said12:03 PMThank you for holding; we look forward to chatting with you!System saidLori S Connected12:03 PMLori SAgent Lori S said12:04 PMHi Peter! Welcome to Schwab New Accounts Opening Chat. I hope you are doing well todayPeterYou said12:04 PMfineLori SAgent Lori S saidI 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 said12:05 PMWould this be your first account with Schwab or do you hold existing accounts?Lori SAgent Lori S said12:09 PMWe 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!PeterYou said12:09 PMfirst 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.Lori SAgent Lori S said12:10 PMGreat 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).PeterYou said12:12 PMI am not sure what that means. We are an investment club with IRS EIN as a partnership.Lori SAgent Lori S saidHere are the exception requirements if you have an investment club in the title or function as such:Agent Lori S said12:14 PMInvestment ClubsAccounts 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 onlyPeterYou saidDoes 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 said12:19 PMSorry, I meant "does the partnership designation bypass those requirements?"Lori SAgent Lori S saidIt does not, if the Investment Club is organized as a partnership you must meet the above requirements to open as a partnershipAgent Lori S said12:19 PMThere 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)PeterYou said12:20 PMInteresting. We would send Schwab money but could not get it out?Lori SAgent Lori S said12:21 PMTo 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)PeterYou said12:23 PMOK. 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?Lori SAgent Lori S saidYou 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 saidThe 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 saidStandard Mailing Address: Charles Schwab & Co., Inc. El Paso Operations Center P.O. Box 982600 El Paso, TX 79998FedEx/UPS/Overnight: Charles Schwab & Co., Inc. El Paso Operations Center 1945 Northwestern Drive El Paso, TX 79912-1108Agent Lori S said12:27 PMFax: 888-526-7252PeterYou said12:28 PMI 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?Lori SAgent Lori S said12:30 PMGreat 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)PeterYou said12:31 PMYou are very helpful and knowledgeable about this. Thank you. Can I get a transcript of this conversation?Lori SAgent Lori S said12:32 PMYou'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.PeterYou said12:33 PMThanks and goodbye,Lori SAgent Lori S said12:33 PMIt has been a pleasure speaking with you. Thank you for considering Charles Schwab. Have a wonderful day!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 DunkelbergerSumner Stock Selectors Investment Club--Mark Eckman