Frequently Asked Questions

About Institutional Intelligent Portfolios®

Institutional Intelligent Portfolios is an automated investment management platform designed to help advisors deliver their personalized portfolio management services and expertise in an automated, online client experience. With this platform, advisors can efficiently serve new client segments, or smaller existing clients that may fall below their account minimums—without compromising quality or client service.

Institutional Intelligent Portfolios offers:

  • Robust ETF portfolios—designed by advisors: Advisors can create a diverse set of portfolios for clients that reflect each firm's investment philosophy. Advisors choose from a broad universe of more than 900 exchange-traded funds (ETFs) across all major fund families, at their discretion.
  • Modern, advisor-branded digital experience for clients: The platform offers the ability to customize what clients see online and in the mobile app with advisor firm branding and information. Advisors can also use features, such as co-browsing, to facilitate conversations.
  • Automated rebalancing, tax-loss harvesting, and client onboarding: The Institutional Intelligent Portfolios’ powerful engine provides a streamlined, paperless new account opening process for clients, while automating portfolio management tasks like rebalancing or the optional tax-loss harvesting capability. And it offers convenient integration with the Schwab systems advisors use every day.
  • Unmatched value to help advisors grow and serve clients efficiently: This platform is competitively priced. There is a 10bps program fee on assets in Institutional Intelligent Portfolios. Advisors with firms that custody more than $100 million with Schwab, above and beyond any funds invested in Institutional Intelligent Portfolios, are not subject to the program fee.

Institutional Intelligent Portfolios offers a great deal of flexibility across portfolio construction, ETF selection, and branding for the client experience. Advisors can leverage the platform to design ETF-based portfolios that reflect their investment philosophy. Portfolios can be customized for various client needs, including:

  • Taxable and IRA-specific portfolios
  • Municipal bond portfolios
  • Income-generating portfolios

Advisors select from a broad universe of ETFs and asset classes. Using the most flexible level of customization, over 900 ETFs are available for selection across 45 asset classes that can be named and defined by the advisor. Advisors also have the ability to determine weighting across those asset classes along with a required FDIC-insured cash allocation.

Firms are also able to customize the web platform and mobile app experience for their clients using their logo, selecting from several color schemes, and adding their contact information.

Schwab Intelligent Portfolios is a retail automated investment advisory service, offered through Schwab Wealth Investment Advisory, Inc., with portfolio management services provided by Charles Schwab Investment Advisory, Inc. (CSIA).

Schwab Intelligent Portfolios and Institutional Intelligent Portfolios utilize the same underlying technology engine for automated trading, rebalancing, and tax-loss harvesting. And both types of accounts are custodied at Charles Schwab & Co. Inc. ("CS&Co.").

Institutional Intelligent Portfolios, however, is designed for independent advisors and enables them to build their own set of portfolios, reflecting their firm's investment philosophy. As a result, Institutional Intelligent Portfolios is highly customizable. Advisors determine the types of strategies offered and the number of portfolios across the risk spectrum from more conservative to more aggressive—as few as three and as many as 45. They select the asset categories and set the weighting, and can choose from more than 900 ETFs to populate the portfolios.

Another key difference is that Institutional Intelligent Portfolios allows the experience to be branded with the advisor firm's logo, name, and contact information, underscoring that the program is part of their firm's solution.

Advisors and their clients have access to a dedicated service team specifically for the support of Institutional Intelligent Portfolios. The team is available from 8:00 a.m.–7:00 p.m. ET Monday–Friday. Advisors call 877-768-5280. Advisor clients call 877-805-3399. This team supports technical and platform functionality questions about Institutional Intelligent Portfolios and can also support your clients with questions about their Institutional Intelligent Portfolios account. The role of Advisor Custody & Trading has not changed—they are available to answer questions and assist with account-related questions.

Advisors set their own account minimums. However, the program requires at least $5,000 to open an Institutional Intelligent Portfolios account. Once an account is funded with at least $5,000, the portfolio is monitored daily and rebalanced automatically.

Advisors have the primary fiduciary duty to clients enrolled in Institutional Intelligent Portfolios. These duties include constructing portfolios, determining the appropriateness of the program for each client, selecting a portfolio for each client, and monitoring ongoing suitability of the platform for their clients, all in accordance with applicable rules and regulations. As the sponsor of the platform, Schwab Wealth Investment Advisory, Inc. administers services related to the platform and implements an advisor's portfolio selections. Advisors should consult the Institutional Intelligent Portfolios Program Agreement for a full description of an advisor's roles and responsibilities.

Probably. The SEC states that to determine your regulatory assets under management, you should include assets in securities portfolios for which you provide continuous and regular supervisory or management services. For more information, consult instructions for Form ADV Part 1A, Item 5.F or your own compliance professionals.

Pricing

Institutional Intelligent Portfolios has a two-tiered pricing structure based on advisor firm assets custodied with Schwab outside the Institutional Intelligent Portfolios program.

  • For those with less than $100 million in assets under management (AUM) outside of Institutional Intelligent Portfolios, there is a 10-basis points program fee.
  • For those firms that maintain more than $100 million in AUM custodied at Schwab above and beyond Institutional Intelligent Portfolios AUM, there is no fee.

No account service fees, trading commissions, or custody fees are charged to advisors or their clients by Schwab.

Advisors pay a 0.10% fee on assets enrolled in Institutional Intelligent Portfolios if they custody less than $100 million in assets at Schwab outside of Institutional Intelligent Portfolios. Additionally, Schwab Bank® earns interest revenue on the cash feature in the accounts. Also, Schwab affiliates can earn revenue from the underlying assets in Institutional Intelligent Portfolios accounts. This revenue comes from managing Schwab ETFs™ and providing services relating to third-party ETFs that advisors may select for the portfolios. Finally, Schwab may receive payments from the trading firms and exchanges where ETF trades are routed for execution.

All ETFs have an operating expense ratio (OER), an annual rate the ETF charges on the total assets it holds. Like all ETFs, Schwab ETFs charge an OER that is a source of Institutional Intelligent Portfolios revenue if advisors select Schwab ETFs for their portfolios. The OER is the same for all purchasers of the ETF, regardless of the firm where, or program in which, it is held. Additionally, some third-party ETFs included in Institutional Intelligent Portfolios pay Schwab for services provided to them as participants in Schwab ETF OneSource™, Schwab's commission-free ETF investing platform. It is important to note that the advisor has discretion over selecting ETFs, regardless of whether Schwab earns revenue.

Advisors have full control in determining the appropriate management fees they bill their clients, which can be submitted through the standard Schwab custodial billing process.

Institutional Intelligent Portfolios account data can be downloaded into a firm's portfolio management system, so advisors can calculate their fees as they normally do. If a firm uses Schwab's management fee capability through Schwab Advisor Center®, they can bill Institutional Intelligent Portfolios clients through that mechanism as well.

Creating Portfolios

The 4% required cash allocation is a component of the overall program structure and supports program capabilities like rebalancing and tax-loss harvesting. The cash allocation also helps support the program economics, with no added cost to the advisor or client. Across all accounts that advisors custody at Schwab, the average cash balance is 7% to 9%. With Institutional Intelligent Portfolios, the asset allocation strategy is up to the advisor. Advisors can elect a higher cash allocation if that fits their investing strategy.

Schwab Bank earns revenue based on the interest it receives by investing the cash, minus the interest paid on the deposit and the cost of FDIC insurance (which Schwab pays). Schwab Bank deposits are FDIC insured up to $250,000, and that amount includes the principal and accrued interest in the cash portion of Institutional Intelligent Portfolios accounts as well as any other cash deposits your clients may have at Schwab Bank.

Yes, cash earns interest that is pegged to an index. This is based on a national average of money market deposit account rates at the $100,000 level. This average is calculated by a third party—RateWatch. The rate of interest fluctuates over time as the national average fluctuates.

No, there is no Schwab Wealth Investment Advisory-recommended set of portfolios provided as part of Institutional Intelligent Portfolios. As part of the platform, sample allocation percentages are available to serve as a guide but are not a recommendation. Advisors are fully responsible to ensure that the percentages map to the intended investment strategies.

Yes, the advisor console allows an advisor to design portfolios with the same values, percentages, and ETFs. Advisors need to complete the asset allocation for all 12 portfolios, but can have as few as three unique portfolios by making adjacent portfolio allocations the same.

The system requires three portfolios for the Total Return strategy and two portfolios for the Income strategies. The total number of portfolios is dependent on the number of strategies that advisors choose to use. Advisors can choose to have as few as three portfolios and as many as 45.

Please read the white paper Institutional Intelligent Portfolios® How to Build & Manage Your Customized Portfolios for more detail on constructing a customized suite of portfolios.

The advisor can choose to offer all of the strategies below or a subset. All advisors must offer a Total Return Taxable strategy as part of their Institutional Intelligent Portfolios program. If the advisor chooses California Municipal, then special ETF selections for California residents are used for the Total Return Municipal and Income Municipal strategies.

Total Return Taxable
Seek to optimize gains from investing into assets that can experience capital appreciation and generate income over time. These portfolios are ideal for investors wanting to reinvest distributions and accumulate capital over longer periods of time.

Total Return Municipal
Seek to optimize gains from investing into assets that can experience capital appreciation and generate income over time, while also considering the impact of taxes on investor returns.

Income Taxable
Seek to optimize current income from investing into equities and bonds with attractive dividends and interest.

Income Municipal
Seek high current income from investing into equities and bonds with attractive dividends and interest, while considering the impact of taxes on investor returns. A significant portion of the fixed income securities can consist of municipal bonds that may have favorable federal tax implications.

There are optional account features for both California Municipal Bonds and for tax-loss harvesting.

If an advisor selects strategies that include municipal bonds, there is an option under "Account Features" to include California municipal bond strategies for California clients in addition to national municipal bond strategies.

An advisor can also choose to offer tax-loss harvesting to clients. If the advisor decides to offer tax-loss harvesting, clients with balances of at least $50,000 have the ability to enroll in automated tax-loss harvesting if they choose. Note that the advisor's decision on whether to offer tax-loss harvesting applies to all of the advisor's clients with balances of at least $50,000. Clients must have an initial minimum balance of $50,000 to request the tax-loss harvesting feature. If the account balances fall below that level, automated tax-loss harvesting will not occur until the balance climbs back above $50,000.

Yes, the advisor console allows asset classes to be turned off prior to an advisor selecting ETFs for their program. With Enhanced Portfolio Customization, advisors can also define the assets classes for their program.

Please see the Institutional Intelligent Portfolios® Guide to Asset Classes white paper for more detail.

Advisors can activate the Enhanced Portfolio Customization feature which enables them to name and define their asset classes and specify the strategies in which a class will be used. As many as 45 classes can be defined in total. There are also over 900 ETFs and ETNs that are eligible for selection. Enhanced Portfolio Customization can be turned on by navigating to the ETF selection page under Settings in the Advisor Console and switching the Enhanced Portfolio Customization toggle to on. Note that Enhanced Portfolio Customization cannot be turned off once a change is made and saved.

Standard Portfolio Customization Enhanced Portfolio Customization
Asset class names are pre-defined. Create and name your own asset classes.
28 asset classes are provided. Advisors can choose not to utilize all 28 asset classes but cannot add additional asset classes. Advisors can define up to 45 asset classes
Asset class descriptions are pre-defined. You must write your own asset class descriptions.
Over 500 ETFs available. Over 900 ETFs available.
Exchange-traded notes (ETNs) and actively managed ETFs are excluded. Exchange-traded notes (ETNs) and actively managed ETFs are available for selection.
ETFs are displayed only in asset classes for which they are eligible. ETFs are not filtered by asset class. All stock ETFs are displayed for each stock asset class. The same applies for Fixed Income and Commodities. Advisors must select ETFs that are appropriate for the asset class.
Portfolios must progress from conservative to aggressive. Portfolios must progress from conservative to aggressive.
Restrictions are in place to help prevent overconcentration in certain asset classes. Asset class concentration restrictions have been removed.
Asset classes are limited for use in certain strategies. You may use any asset class in any strategy.

Institutional Intelligent Portfolios lets advisors choose from a range of more than 900 eligible ETFs to create customized investment portfolios for clients.

The ETFs on this platform were selected by Schwab Wealth Investment Advisory, Inc. based on research by Charles Schwab Investment Advisory, Inc. For initial selection on the Institutional Intelligent Portfolios list, ETFs are required to meet the following criteria:

Standard Portfolio Customization Enhanced Portfolio Customization
Average three-month bid-ask spread no greater than 35bps Average three-month bid-ask spread no greater than 35bps
At least $20 million in assets At least $20 million in assets
At least three full months of performance history At least three full months of performance history
Corresponds to 1 of the 28 asset classes included in the Institutional Intelligent Portfolios program
Excluded ETF Types Excluded ETF Types
Actively Managed ETFs
Exchange-traded notes (ETNs)
Inverse and leveraged ETFs Inverse and leveraged ETFs
Asset allocation ETFs Asset allocation ETFs

The ETFs available through Institutional Intelligent Portfolios have been through a strict evaluation process and are monitored each quarter regarding the criteria.

For more information, please review the white paper Institutional Intelligent Portfolios® ETF Evaluation.

Advisors using Institutional Intelligent Portfolios select from a broad universe of ETFs at their discretion. There are more than 900 ETFs available for selection across all major fund families. These ETFs are selected based on standards of structure, liquidity, and history. All ETFs added to the program must meet these criteria.

Schwab Wealth Investment Advisory, Inc. reviews ETFs quarterly and makes additions to the platform semi-annually as ETFs become eligible. This is done according to the program selection criteria developed by Schwab Wealth Investment Advisory, Inc. For more information, please review the white paper Institutional Intelligent Portfolios® ETF Evaluation.

The advisor console has an area for advisors to load firm logos, select colors, and provide contact information for both the web and mobile experiences. If settings change in one place, they change in the other. Changes that advisors make go live immediately.

Opening & Funding Accounts

Yes, opening and funding an Institutional Intelligent Portfolios account is a paperless experience. Clients sign all agreements electronically during the account opening process and in the future. This is a requirement for the account. Clients must have a valid email address and a PDF reader. The agreements include:



Additionally, enrolled clients consent to receive electronic delivery of trade confirmations, statements and other account documents, agreement amendments, ETF prospectuses, shareholder documents, tax documents, updates to Form ADV disclosures, and other documents.

No. Clients need to open accounts themselves directly on the Institutional Intelligent Portfolios site or mobile app. Advisors can send their clients a link to where they need to go to initiate the process.

Joint accounts and revocable living trusts with up to two identical grantors and trustees are eligible for enrollment in Institutional Intelligent Portfolios. Like any Schwab account, both account holders must agree to the terms of the account. To accomplish this, Institutional Intelligent Portfolios allows each account holder to complete the enrollment process separately, but in effect opening a single account.

First, the primary tenant/trustee initiates the enrollment process by answering the investment profile questionnaire, completing necessary information to open the account, and agreeing to the account terms.

Next, the primary tenant/trustee is asked to provide an email address for the second tenant/trustee and to define a four-digit PIN.

The second tenant/trustee receives an email directing them to complete the account opening process. They must utilize the link provided in the email and enter the four-digit PIN provided to them by the primary tenant/trustee to proceed.

The second tenant/trustee then provides all remaining information to open the account and agrees to the same account terms provided to the primary account holder.

Note: To help protect the confidentiality of the four-digit PIN selected, clients should consider providing the PIN to the second account holder via a method different from the email address provided during enrollment.

Yes. Upon completion of the investor profile questionnaire, Institutional Intelligent Portfolios presents clients with one of the advisor-designed portfolios. At this point, the client can move the portfolio one step in either direction. However, the advisor has final approval of the portfolio and can move the client into any portfolio the advisor selects for them.

The advisor must approve the portfolio selection for a client. The advisor can move a client into another portfolio at the advisor's discretion.

Advisors don't manage passwords for their clients, and clients should not share logins and passwords with advisors. Advisors can view their clients' Institutional Intelligent Portfolios accounts in the Institutional Intelligent Portfolios advisor console, on schwabadvisorcenter.com, or by co-browsing with their client.

Advisors receive login credentials to the advisor console and are asked to define their own password. Each user with access to the advisor console should maintain his or her own login and password and should not share credentials within the firm.

Individual Brokerage, Custodial, Joint Tenant with Rights of Survivorship, Tenants in Common, Community Property, revocable living trust (single and two trustees), Roth IRA, Traditional IRA, and Rollover IRA are the account types available in Institutional Intelligent Portfolios.

We continue to evaluate additional account types for inclusion in Institutional Intelligent Portfolios.

Institutional Intelligent Portfolios accounts can be funded with cash or equity securities (individual stocks, ETFs, or mutual funds). Cash can be added through deposits, cash journals from another Schwab account, wires, or MoneyLink. To fund with equity securities, clients can make the request to their advisor who in turn can initiate internal transfers through Schwab Advisor Center. ACAT and non-ACAT Transfers of Assets (TOA) from other financial institutions into Institutional Intelligent Portfolios accounts are also available using standard processes in place for those transactions.

Yes, advisors can journal cash and securities (individual securities, ETFs, and mutual funds) through Schwab Advisor Center into Institutional Intelligent Portfolios accounts. Advisors can also initiate MoneyLink cash transfers from external accounts into Institutional Intelligent Portfolios accounts.

Yes. Advisors with the appropriate authority may request distributions from Institutional Intelligent Portfolios accounts on behalf of their clients verbally or in writing to their service team. At this time requests for distributions from Institutional Intelligent Portfolios accounts cannot be made through Schwab Advisor Center. Signature verification is still required for third party distributions. Given the electronic nature of these account types, Advisors should encourage their clients to send Schwab a signature card to have on file.

All securities are liquidated and invested in the advisor defined portfolio, except if there is a matching security in the portfolio, that security will only be liquidated to the extent necessary to match the portfolio allocation. Although reasonable efforts are made to trade positions on the next business day following transfer, positions are traded without regard to timing or tax consequences.

Schwab does not charge a trading commission or fees for selling deposited securities. Redemption fees, sales charges and other costs may apply.

Yes, clients are able to set up one-time or recurring deposits and withdrawals at any time through institutionalintelligent.schwab.com or through schwaballiance.com. New funds are typically invested on the trading day following the contribution.

Clients can elect to have dividends and interest withdrawn, via a form on the Institutional Intelligent Portfolios website.

Yes, clients can request cash withdrawals at any time. To do so, clients should log in to their Institutional Intelligent Portfolios account at institutionalintelligent.schwab.com and request a transfer to another brokerage or bank account at Schwab or to another institution. Funds are made available immediately unless the withdrawal request exceeds the cash allocation in their portfolio. If the withdrawal requires the sale of ETFs to provide the requested cash and maintain the portfolio's target cash allocation, the availability of the funds is delayed until the sale transactions have settled (ETFs have a three-business-day settlement period). After a withdrawal, portfolios are rebalanced to their target asset allocations if they have drifted significantly from the portfolio's target profile.

Mobile check deposits and cash transfers from other Schwab accounts are usually available same day, if the request is made during regular business hours. Wire transfers to an Institutional Intelligent Portfolios account also appear same day while Automated Clearing House (ACH) transfers typically take one or two business days to process. After the cash and deposits are transferred, it can take approximately one additional business day for the funds to be invested into a portfolio. Initial deposits are not invested until advisors have approved the portfolio.

Yes. To roll over an old 401(k), clients should select Rollover IRA as the account type, and choose Transfer from an outside retirement account when they get to the funding method step.

Clients should:

  • Contact their former employer's plan administrator and tell them they want a direct rollover of their plan assets.
  • Complete any forms required by their former employer.
  • Decide how they want their retirement assets distributed.
  • Ask their former employer to deposit their funds directly into their Schwab Rollover IRA via wire or check.
    • To prevent funds from being taxed, the check should be made payable to "Charles Schwab & Co., Inc., FBO (Your Client’s Name).”
    • For an easy deposit, clients can give their former employer their Schwab Rollover IRA account number and ask them to include it on the check.
  • Instruct their former employer to mail the check to: Charles Schwab & Co., Inc., P.O. Box 628291, Orlando, FL 32862-8291.

Advisors can contact their Schwab Advisor Services™ service team for additional information regarding the rollover process.

Yes. To transfer a Roth, Traditional, or previous Rollover IRA from another financial services provider, clients should select either Roth IRA or Traditional IRA as the account type, and choose Transfer from an outside retirement account when they get to the funding method step.

Clients should:

  • Contact the custodian and ask them to deposit funds directly (via wire or check) into their Institutional Intelligent Portfolios IRA.
    • To prevent funds from being taxed, checks should be made payable to "Charles Schwab & Co., Inc. FBO (Your Client's Name)." Clients should request that the custodian include their account number on the check.
  • Instruct their custodian to mail the check to: Charles Schwab & Co., Inc., P.O. Box 628291, Orlando, FL 32862-8291.

Advisors can contact their Schwab Advisor Services service team for additional information regarding the rollover process.

Yes. To transfer cash from a Schwab Roth, Traditional, or Rollover IRA, clients should select Transfer from an existing account when they get to the funding method step. Next, clients should choose their existing Schwab IRA as the "From" account, and enter the amount of cash they wish to transfer. Clients can immediately transfer any available cash into their Institutional Intelligent Portfolios IRA accounts. Securities need to be liquidated prior to transfer.

Note: IRA beneficiaries do not automatically transfer from one Schwab IRA account to an Institutional Intelligent Portfolios IRA. Clients need to designate beneficiaries on their Institutional Intelligent Portfolios IRA online at schwaballiance.com or by completing the form available on the Institutional Intelligent Portfolios website.

Yes. Clients should select Transfer from an existing account. Next, clients should choose their existing Institutional Intelligent Portfolios IRA account as the “From” account, enter the amount of cash they wish to transfer, and review or update their tax withholding election. Clients can immediately transfer any available cash into or from their Institutional Intelligent Portfolios IRA accounts.

Clients need to designate beneficiaries for each Institutional Intelligent Portfolios IRA account they open. They can do this online on the Institutional Intelligent Portfolios website or at schwaballiance.com.

Institutional Intelligent Portfolios accounts may be closed by completing an Institutional Intelligent Portfolios account closure form available on the Institutional Intelligent Portfolios website.

Managing the Program

The risk profile questionnaire is required so that Institutional Intelligent Portfolios can map the client real time to a portfolio and can provide the advisor additional insight into the client's risk willingness and capacity. During enrollment, a client immediately views their advisor's recommended portfolio allocation that maps to the client's risk profile. The client can request a portfolio that is one risk level above or below that recommendation. Advisors have the opportunity to select a different portfolio for their client prior to it being invested. Please read the white paper Institutional Intelligent Portfolios® Investor Profile Questionnaire Risk Scoring and Mapping for more detail on risk scoring and mapping.

Through the Institutional Intelligent Portfolios website and mobile app, clients can view real-time balances and performance to date of their investments. Institutional Intelligent Portfolios does not generate formal quarterly or year-end performance reports for clients. However, just like all other accounts custodied with Schwab Advisor Services, Schwab Data Delivery® files are available for the Institutional Intelligent Portfolios master account. This information can be imported into advisors' existing portfolio management systems to generate performance reporting for clients.

Clients will receive automated emails after the advisor has completed certain activities for their clients’ accounts, including:

  • Advisor completes the portfolio review for a new account.
  • Advisor completes the portfolio review in response to client updating his or her answers in the Investor Profile Questionnaire.
  • Advisor proactively makes changes to a client’s existing portfolio.

If an advisor rejects a new client account, that client is removed from the firm's program.

If a client wants to move from an Institutional Intelligent Portfolios account to another account managed by the same advisor, they have to open a new account with the advisor and fill out an Account Closure Form on the Institutional Intelligent Portfolios website. The closure form includes instructions so that the ETFs can be moved to the new account.

Accounts enrolled in Institutional Intelligent Portfolios are analyzed daily for rebalancing and tax-loss opportunities against the platform's drift parameters.

Trades calculated by the engine are aggregated into one set of trades that are executed at an undisclosed time, to avoid any front running by other parties.

Institutional Intelligent Portfolios trading orders are generally aggregated to ensure that Institutional Intelligent Portfolios clients—regardless of the advisor or the assets in the account—get the same average price on trades in the same ETF and on the same side (buy vs. sell). Thus Institutional Intelligent Portfolios strives to deliver the same price to all participants in the program, and does so at the program level and not by advisor, strategy, or client portfolio.

Yes, an advisor can suspend trading for their program or an individual account.

Advisors should note that trading for their program or any individual account will remain suspended until they resume trading. Advisors should review the Program Agreement for full details regarding suspending trading.

Integration

The Institutional Intelligent Portfolios advisor console and Schwab Advisor Center are different websites. The advisor console is used to create and manage your Institutional Intelligent Portfolios program and manage your client's accounts. Only Institutional Intelligent Portfolios accounts are accessible on the advisor console. Advisors can link to the advisor console from the Schwab Advisor Center "More" menu.

The Institutional Intelligent Portfolios website is the primary destination for clients to manage their Institutional Intelligent Portfolios accounts. The site allows them to view account activity, transfer funds, and manage all necessary account information. For clients who have other accounts at Schwab, the Schwab Alliance website allows them to gain a comprehensive overview of all their accounts, including Institutional Intelligent Portfolios accounts. Clients can link directly from Schwab Alliance to the Institutional Intelligent Portfolios website with no additional login required.

Advisors cannot link to a retail Schwab Intelligent Portfolios account. Clients need to close the Schwab Intelligent Portfolios account and open a new Institutional Intelligent Portfolios account in order to link to an advisor.

Client agreements for Institutional Intelligent Portfolios are different from those for standard brokerage agreements or Schwab Intelligent Portfolios agreements. The available method for clients to agree to terms for Institutional Intelligent Portfolios is via the online account open process.

Advisors are able to see account information (balances, positions, transactions, etc.) in Schwab Advisor Center for all their clients' Institutional Intelligent Portfolios accounts. All of the normal information that advisors can see, such as documents, cost basis, and profiles, are also visible for Institutional Intelligent Portfolios accounts. In addition, advisors can find and download data on Institutional Intelligent Portfolios accounts using Schwab Data Delivery®.

Advisors are not able to move money, trade, approve portfolios, or edit dividend reinvestment instructions for Institutional Intelligent Portfolios accounts on Schwab Advisor Center.

Most account servicing can be completed online, without a form, by clients directly on the Institutional Intelligent Portfolios website. Schwab does not accept paper forms for functions that can be completed online. For functions that are not available online, advisors can access the necessary forms from the Forms and Applications page of Schwab Advisor Center. There is a new forms category to clearly distinguish which maintenance forms are eligible for Institutional Intelligent Portfolios accounts.

Across Schwab Advisor Center, there is an indicator on the master account and subaccount level to note that the account is an Institutional Intelligent Portfolios account. New data in the Profiles page indicates if accounts are Institutional Intelligent Portfolios.

All of this functionality carries through the Schwab OpenView Gateway™ integrations. Any advisor using Gateway integrations to view Schwab data in their CRM receives an Institutional Intelligent Portfolios indicator in the CRM.

The login URL for all advisor clients is institutionalintelligent.schwab.com. When clients are redirected from their advisor's website to the Institutional Intelligent Portfolios website, they need to log in using Institutional Intelligent Portfolios credentials. Advisors can provide a link to that page from their site by completing and submitting the Linking Request Form and Agreement, which advisors can request from the Institutional Intelligent Portfolios service team.

On Schwab Alliance, clients are able to view account information (balances, positions, transactions, statements, etc.). They can transfer money between their Institutional Intelligent Portfolios account and another Schwab account or transfer money to an external account using MoneyLink. Additionally, clients can designate beneficiaries on their Institutional Intelligent Portfolios IRA accounts. Clients cannot trade, edit dividend reinvestment instructions, change their risk profile, or initiate checks and wires on Schwab Alliance.

Institutional Intelligent Portfolios and Schwab Alliance share credentials. Clients accessing the Institutional Intelligent Portfolios website directly from Schwab Alliance are not required to reenter credentials. From the Account Summary page, clients can click Access Institutional Intelligent Portfolios site, which takes them to a separate website, institutionalintelligent.schwab.com.

Client Resources

Advisors have the option to provide their clients access to various resources including a list of commonly asked questions (FAQs) and white papers regarding the Investment Profile Questionnaire and a Guide to Asset Classes available within Institutional Intelligent Portfolios.

To enable your clients to view the FAQs and white papers, you need to turn "On" the Learn More and FAQ options within the Settings area of the advisor console. If you select On for either feature, all content within that feature is available to your clients.

To view the materials available to your clients, select Client Support Materials under “Help” within the advisor console.

The cash allocation in Institutional Intelligent Portfolios™ is accomplished through enrollment in the Schwab Intelligent Portfolios Sweep Program ("Sweep Program"), sponsored by Charles Schwab & Co., Inc. ("CS&Co."). By enrolling in Institutional Intelligent Portfolios, clients consent to having the free credit balances in their Institutional Intelligent Portfolios brokerage accounts swept into deposit accounts at Charles Schwab Bank® ("Schwab Bank") through the Sweep Program. Schwab Bank is an FDIC-insured depository institution affiliated with Schwab Wealth Investment Advisory, Inc. ("SWIA") and CS&Co. Cash balances held in the Sweep Program at Schwab Bank are eligible for FDIC insurance up to allowable limits.

Tax-loss harvesting is available for clients with invested assets of $50,000 or more in their Institutional Intelligent Portfolios account. Clients must be enrolled to receive this service.

The tax-loss harvesting feature that is available with Institutional Intelligent Portfolios is subject to significant limitations, which are described on the Institutional Intelligent Portfolios website and mobile application (collectively, the "Website") as well as in the Schwab Wealth Investment Advisory, Inc. Institutional Intelligent Portfolios disclosure brochure (the "Brochure") and the IRS website at www.irs.gov. Neither the tax-loss harvesting strategy for the Institutional Intelligent Portfolios platform nor any discussion herein is intended as tax advice. Neither Charles Schwab & Co., Inc. nor its affiliates, including but not limited to Schwab Wealth Investment Advisory, Inc., represent that any particular tax consequences, benefits, or outcomes will be obtained.

Schwab affiliates do earn revenue from the underlying assets in Institutional Intelligent Portfolios accounts. This revenue comes from managing Schwab ETFs and providing services related to certain third-party ETFs that can be selected for the portfolios, and from the cash feature on the accounts. Revenue may also be received from the market centers where ETF trade orders are routed for execution.

Brokerage Products: Not FDIC-Insured • No Bank Guarantee • May Lose Value

Institutional Intelligent Portfolios is an ETF program made available through independent investment advisors that maintain a business relationship with Schwab Advisor Services™. The program is sponsored by Schwab Wealth Investment Advisory, Inc. ("SWIA"), a registered investment advisor.

Charles Schwab Investment Advisory, Inc. ("CSIA") provides ETF research services to SWIA for the program.

Charles Schwab & Co., Inc., SWIA, CSIA, and Charles Schwab Bank (together "Schwab") are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products, including the Schwab One® brokerage account, are offered by Charles Schwab & Co., Inc., Member SIPC. Deposit and lending products are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender.

Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Charles Schwab & Co., Inc., Member SIPC.

This material is for registered investment advisor use only. This material may not be forwarded or made available, in part or in whole, to any party that is not a financial professional.


© 2017 Schwab Wealth Investment Advisory, Inc. All rights reserved. Unauthorized access is prohibited. Usage is monitored.

(0417-XB9H)