Alternative investments

Submitted by Brian.Lavelle on November 9, 2017

Schwab provides advisors access to a growing list of alternative investments. For alternative investments selected from one of Schwab's platforms, we offer consolidated reporting, efficient tax filings, and the dedicated support of our experienced alternative investment service team.

Schwab’s alternative investment custody solution provides advisors with additional choice and flexibility to invest in securities that are not available on one of our platforms.

Solutions from Schwab

The platform provides the choice, transparency, convenience, and cost-effectiveness you expect from Schwab. Select from a diversified portfolio of non-listed publicly available alternative investments issued by well-known asset managers encompassing hedge fund, private equity, real estate, and alternative income strategies. No annual custody fees, consolidated reporting, and streamlined execution make this platform an efficient way for investors with varying levels of wealth and investment sophistication to incorporate alternative investments into their portfolios.1 

The platform provides advisors access to third-party platform sponsors offering menus of private funds. Through their expertise and scale, these firms help provide eligible advisors with a streamlined experience by pre-qualifying clients2, controlling document workflows electronically, and offering access to research, so advisors can customize the use of alternative investments to clients’ needs. 

Custody services

Schwab Alternative Investment Custody Services provides qualified advisors with additional choice and flexibility to invest in securities that are not available on one of the Schwab platforms and manage them alongside their other traditional assets. Acceptance of these investments is subject to a simplified asset acceptance review process. In general, Schwab accepts the following asset types:

  • Onshore and offshore hedge funds and hedge funds of funds
  • 1933 Act-registered and private non-listed REITs
  • Private equity funds and funds of funds
  • Other third-party pooled investments
  • Certain private stock

If a security doesn’t meet Schwab’s asset acceptance criteria, it may be held with one of Schwab’s preferred alternate custodians. For additional insights into holding alternative investments at Schwab, refer to the section of our Service Guide.

Streamline processing of pooled investments 

Securities in our custody solution offered by firms participating in the Depository Trust & Clearing Corporation (DTCC) Alternative Investment Products (AIP) services platform are eligible for an expedited review process. Maintained by the DTCC, AIP is a data-transmission platform that links administrators, broker-dealers, custodians, and issuers of alternative investments to support streamlined processing of pooled investments, such as hedge funds, funds of funds, private equity, REITs, and limited partnerships. 
 

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