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Portfolio > Alternative Investments

Schwab Launches Alternative Investment Platform

By Bernice Napach

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(Photo: Christopher Dilts/Bloomberg)

For the third time in a month, Charles Schwab is announcing a new offering — this time, an alternative investment platform for independent financial advisors and their clients.

The Schwab Alternative Investment Marketplace provides those advisors and their high-net-worth clients access to third-party platform sponsors that offer menus of private funds. iCapital Network, a financial technology platform, is the first third-party platform provider to join. 

The announcement of the new platform follows Schwab’s elimination of commissions on online stock, ETF and options trades and its plans to allow for the trading of fractional shares.

(Related: Schwab Ends Commissions on Online and Mobile Trades)

In addition to providing access to alternative funds, Schwab’s new marketplace streamlines capital call processing and excludes custodial fees. The minimum investment is $100,000, and clients must also meet eligibility requirements set by the third-party platform sponsor and fund issuer.

(Related: Schwab to Allow Trading of Fractional Shares: Report)

Jalina Kerr, senior vice president, Client Experience, Schwab Advisor Services, said the new platform is a response to advisors’ requests for access to more alternative investment funds to meet clients’ needs. “By working with known firms that have experience and scale, we’re offering an additional way to deliver alternative investment solutions to clients,” said Kerr in a statement.

Lawrence Calcano, CEO of iCapital Network, said the arrangement with Schwab was “a substantial enhancement” to his firm’s services and furthers its mission to provide diversification and returns to clients through alternative investments.

Advisors accessing iCapital platform on the new Schwab marketplace can view a curated menu of alternative funds, including private equity and hedge funds, access research on funds and strategies and invest in those funds while managing those investments within their clients’ Schwab accounts. The iCapital platform includes a streamlined investing and reporting process and electronic access to documents associated with clients’ investments.

Jackson Arnold, a senior research associate at Corporate Insight, which tracks technological developments in financial services and health care, said, “It’s no surprise that Schwab opted for iCapital, one of the leading alternative marketplaces, as the first platform sponsor” on its new alternative assets marketplace. “The move will help Schwab advisors better compete with wirehouses for high-net-worth clients by making it easier to offer exclusive products with relatively low investment minimums.”

— Related on ThinkAdvisor:

Bernice Napach

@Think_Napach

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