LAS VEGAS, Oct. 29 /PRNewswire-FirstCall/ -- Schwab Institutional, a
leading provider of custodial, operational and trading support for
independent investment advisors, today announced its new line-up of trust
services for independent Registered Investment Advisors (RIAs).
The new services were introduced to advisors at the IMPACT(R) 2007
conference in Las Vegas, where Schwab is celebrating its 20th anniversary
serving the independent advisor industry.
Both new services are designed to help advisors retain the management
of trust assets. Independent RIAs have estimated that as much as 80% of
their current assets under management will end up in trusts within the next
10 years* as growing numbers of baby boomers prepare to transfer their
wealth to the next generation and reduce estate taxes. The ability to serve
clients as these trusts are being created enables them to establish
relationships with the next generation. Banks have traditionally had a
stronghold in the trust arena, but more advisors are recognizing that
trusts are the gateway to managing the total wealth of their affluent
clients: more than 28% of Schwab Institutional's total assets are in
trusts, up 27% from the prior year (as of September 2007).
"The stakes are high for advisors," said Cathy Clauson, vice president
of Schwab Institutional. "There was more than $3.3 trillion in trust
accounts as of 2005, and that number is expected to more than double by
2010**. Much of the great wealth transfer that is expected in the next 20
years will flow into trusts."
The new trust services are designed specifically for advisors, whose
needs vary based on who the trustee is on the trust account. The Personal
Trust Reporting Services will help advisors manage assets when an
individual or family member is serving as trustee on an irrevocable trust.
The Charles Schwab Bank will be offering an administrative or directed
trustee option (pending regulatory approval) for advisors who manage
accounts that require a corporation to act as trustee. Both these offers
support the advisor in their core competency of managing the client
relationship and the investment management of these trust assets.
Schwab's new custom-built Personal Trust Reporting Service enables
advisors to offer a fully integrated trust accounting and trading platform
for their clients who act as trustees, eliminating the need to access
multiple systems with:
-- Principal and income reporting and trust accounting
-- Separate, periodic trust reports
-- Tax lot accounting
-- Scheduled payment to beneficiaries (calculated and fixed)
-- Recordkeeping for personal tangible property owned by the trust, not
held by Schwab Institutional
-- Tax worksheet creation and optional tax preparation
"Advisors need an efficient, scalable trust solution that helps them
deliver the high level of service their clients expect without changing the
way they do business," said Clauson. "By providing individual trustees with
complex accounting, recordkeeping and reporting for trust accounts, we are
helping advisors win and retain assets even as they are transferred from
generation to generation."
Schwab began testing its new Personal Trust Reporting Service with
advisors in March; since then, more than $100 million has flowed through
the system.
According to Marr Leisure of Leisure Capital Management, who has been
using the service since March, "Trustees have been relying on simplistic
brokerage statements that fail to report cost basis and income
distributions correctly. The needs of the income beneficiary and
remaindermen are different, and Schwab's service ensures that expenses and
fees are properly allocated, adding a level of sophistication that reduces
potential conflicts and enables advisors to better serve the next
generation."
For advisors who wish to work with Schwab as a corporate or directed
trustee, the new Administrative Trustee Service*** enables them to focus on
investment management while Schwab Bank handles the administrative
fiduciary duties of the trust. The same fully integrated trust accounting
and trading platform offers:
-- Favorable trust status
-- Principal and income distributions
-- Accounting and recordkeeping
-- Preparation and filing of federal and state taxes and distribution of
K-1s to beneficiaries
Charles Schwab & Co., Inc. and Charles Schwab Bank are separate but
affiliated companies and wholly owned subsidiaries of The Charles Schwab
Corporation. Charles Schwab Bank Personal Trust will be a division of
Charles Schwab Bank and is pending regulatory approval. Charles Schwab Bank
Personal Trust will serve as administrative trustee of trusts, the
investments of which are managed by independent investment advisors. Schwab
Institutional will provide custody securities brokerage, trust accounting
and related back office services to Charles Schwab Bank Personal Trust in
connection with the Bank's Administrative Trustee service.
About Schwab Institutional
Schwab Institutional is a leading provider of custodial, operational
and trading support for independent investment advisors. Since 1987, Schwab
Institutional has supported independent investment advisors by offering
support and services to help grow their businesses and help their clients
reach their financial goals. As of September 30, 2007, client assets
custodied with Schwab Institutional stood at $581 billion. These assets,
managed by the approximately 5,500 independent advisor firms Schwab
Institutional currently serves, represent approximately one-third of total
client assets custodied with The Charles Schwab Corporation. Brokerage
products offered by Schwab Institutional are not FDIC insured, are not
guaranteed deposits, and are subject to investment risk, including the
possible loss of principal invested. Schwab Institutional is a division of
Charles Schwab & Co., Inc.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 306 offices and 6.9 million client
brokerage accounts, 1.2 million corporate retirement plan participants,
212,000 banking accounts, and $1.4 trillion in client assets. Through its
operating subsidiaries, the company provides a full range of securities
brokerage, banking, money management and financial advisory services to
individual investors and independent investment advisors. Its broker-dealer
subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org),
and affiliates offer a complete range of investment services and products
including an extensive selection of mutual funds; financial planning and
investment advice; retirement plan and equity compensation plan services;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment
advisors through its Schwab Institutional division. The Charles Schwab
Bank, N.A. (member FDIC) provides banking and mortgage services and
products. CyberTrader(R), Inc. (member SIPC, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com. (1007-1500)
* Franklin Templeton white paper, January 2007
** Advisor News article on estate planning, June 2006
*** Administrative Trustee Services provided by Charles Schwab Bank
Personal Trust Division pending regulatory approval.
SOURCE Charles Schwab
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Related links:
http://www.schwab.com
CONTACT:
Alison Wertheim of Charles Schwab,
+1-415-636-5812, alison.wertheim@schwab.com; or Gauri Mundkur of
Makovsky + Company, +1-212-508-9606, gmundkur@makovsky.com, for
Charles Schwab
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