Alternative Investments

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 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 Schwab Alternative Investment OneSource® platform provides the choice, transparency, convenience, and cost-effectiveness you expect from Schwab. Select from a diversified portfolio of non-listed 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. 

The Schwab Alternative Investment Marketplace™ platform provides advisors access to third-party platform sponsors offering menus of private funds. Through their expertise and scale, these firms help provide eligible advisors1  with a streamlined experience, controlling document workflows electronically, and offering access to detailed fund information, so advisors can customize the use of alternative investments to their clients' needs.  

Custody Services

Schwab Alternative Investment Custody Services provides 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 Schwab's preferred alternate custodian. For additional insights into holding alternative investments at Schwab, refer to the Schwab Alternative Investment Custody Services 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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Investors should carefully consider the investment objectives, risks, charges, and expenses before investing. The prospectus or offering memorandum contains this and other information. It should be read carefully before investing. This is not an offer of, or a solicitation to subscribe to or purchase, securities.

1. Advisors and clients must meet eligibility requirements as determined by the third-party firm or third-party platform sponsor to invest into funds.

Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor's risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds.

Schwab does not provide investment advisors, or their clients, advice or make recommendations about potential investments in any funds on the Schwab Alternative Investment OneSource platform, funds made available on third-party platforms that participate in the Schwab Alternative Investment Marketplace platform, and funds that may be held in custody. It is each investment advisor's responsibility to determine the suitability of such an investment for its clients. Alternative investments are risky and an advisor's clients may lose their entire investment in a fund. 

Schwab receives remuneration from third-party firms participating in the Schwab Alternative Investment OneSource platform for recordkeeping, shareholder services, and other administrative services.

Schwab receives remuneration from the third-party platform sponsors participating in the Schwab Alternative investment Marketplace platform for recordkeeping, shareholder services and other administrative services.

With Schwab Alternative Investment Custody Services, Schwab has neither endorsed nor approved the investment and Schwab’s acceptance of the investment into custody indicates solely that the investment meets the criteria of Schwab's existing systems and procedures, and that the acceptance in no way can be construed to be either an endorsement or evaluation of merit of any kind or an acknowledgment that the investment complies with any sanction, legal authority, or regulatory statute. 

Third-party firms, including third-party platform sponsors