April 29, 2020
I have previously requested that the amended definition of an accredited investor include clients of registered investment advisers who have formally, in writing, permitted their RIA to invest in private placements on their behalf.
This proposal avoids allowing a non-accredited investor client of an RIA to invest in private placements other than those made through their RIA.
In October 2019, Schwab Advisor Services introduced the Schwab Alternative Investment Marketplace platform, which gives Schwab's independent advisor clients access to third-party platform sponsors that offer menus of private funds.
The new platform delivers a number of benefits for independent advisors, including removal of custodial fees, streamlined capital call processing, and access to third-party alternative investment funds.
Schwab is the industry leader and largest custodian of Registered Investment Advisor assets, providing custodial, operational, practice management, and trading support to more than 7,500 independent RIA firms.
In order for these RIAs to take advantage of Schwab's new platform, they will have to segregate their clients and their linkage to their individual Schwab accounts into two groups: accredited investor clients and non-accredited investor clients.
Having to make and use this segregation places an inordinate and costly burden on RIAs who want their clients to be able to enjoy the many benefits of Schwab's new platform.
For this and other sound reasons, I request that the Commission accept my proposal for enabling all RIA clients to be accredited investors.