Charles Schwab & Business Continuity
Once Charles Schwab is notified of an IA death/incapacitation, they take certain steps depending on entity type.
- Sole Proprietorships are not separate legal entities so it terminates when the sole proprietor becomes disabled or dies.
- Single Member LLCs are separate legal entities and can survive death of sole owner. Typically, the organization documents would detail the succession plan. We would need to verify the following:
- No Succession Plan and No Qualified individual to run the business – close firm
- Succession plan but no qualified individual – restrict until we’ve had a chance to review succession plan to determine next steps and required documents (e.g., sale of assets).
- Succession plan and qualified individual – firm can continue to operate unrestricted provided succession plan allows qualified individual to run firm
- Multiple owners
- One or more owners remain – firm can continue to operate unrestricted as long as at least one remaining owner is qualified. May need Authorized Agent Designation Form and will need copy of updated ADV
Firms can complete the Succession Plan Notification & Indemnification Agreement ahead of time but Schwab will still request documents, including a copy of the succession plan, upon event notification. Schwab will not review/store succession plans until there’s a trigger event.
Click on the link below to download the form:
"Addendum to Service Agreement: Succession Plan Notification & Indemnification Agreement"