What Is a Guardian Brokerage Account?
A guardian account is similar to a custodial account but there are few significant differences concerning legal matters. In both accounts, the primary creators are typically parents or grandparents; the owner is the beneficiary.
Custodial accounts are typically available at banks and credit unions, and parents can retain control over their children’s accounts while they are still minors.
Guardian accounts, on the other hand, require a court order that will be presented to the bank or credit union. Guardian accounts can be created for minors or adults, so long as there is justification that they are unable to manage their own money. This is often due to mental or physical incapacities.
Guardian/Conservator Accounts at Charles Schwab
So, as long as you have a minor or adult in your family who needs help with the management of their investments, you can open a guardian/conservator account with Charles Schwab.
Doing this will enable you to manage the beneficiary’s assets, which includes making trading decisions.
Opening the Account at Charles Schwab
To open a guardian/conservator account with Charles Schwab,
head over to the account opening page on their website. In the left-hand column, you will see a list of account categories. Select the “Joint/Minor” section and expand it. Although a guardian/conservator accounts don’t necessarily need to be for a minor, this is where you’ll find that account type.
Now, scroll down to “Guardianship or conservatorship.” Select this option, and you’ll be presented with the pertinent account opening page.
There’s a caveat, however. This account can’t be opened online. You’ll need to thus use the broker’s online account opening form to receive an email with further instructions for the completion of the account opening process. In short, you’ll need to fill out some paper forms and send them back to Charles Schwab.
There are two others ways to open the guardian/conservator account. You can download the required forms instead of receiving them as an email. Or, you can have the broker send them through the postal service.
In any case, the account will not be opened by Charles Schwab until they receive the necessary paperwork.
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Fees for the Charles Schwab Guardian Account
Charles Schwab charges no fees and imposes zero minimums on all account types. So, when opening a guardian/conservator account there’s no need to worry about account minimums, annual fees, low-balance charges, or inactivity fees. There’s also no charge to close an account.
Even better, the guardian/conservator account has the same pricing schedule shared by other Charles Schwab accounts: $0 commissions on stock and ETF trades.
Other Account Types Available at Charles Schwab
If you hope to open an account for an incapacitated adult, a guardian/conservator account might be your only option with Charles Schwab.
However, if you’re opening a brokerage account for a minor, you have a few other choices.
One option is the UTMA/UGMA account, in which assets automatically transfer to the minor at 18 to 25 years of age (depending on the state). The account is not tax deferred, but withdrawals can be used for any purpose.
Another option is a Minor IRA, which is tax deferred and may be opened at Charles Schwab as either a Roth or Traditional IRA. Unlike the UTMA/UGMA account, the beneficiary must have earned income. There is also a limit on annual contributions, whereas the UTMA/UGMA account has no limits.
Additional Benefits of a Charles Schwab Account
In addition to Charles Schwab’s top-tier fee schedule, you will also get access to futures and forex trading, which is relatively rare among mainstream securities brokers. Plus, you’ll have access to use excellent software and the ability to invest in more than 13,000 mutual funds.
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