As new investors, many Wealthjar clients aren’t aware of the role the custodian plays in the investment process. Here, we will try to distinguish the separate roles of Wealthjar, as your investment advisor, and Charles Schwab & Co., Inc., as the custodian of your account.To make the distinction between the role of an investment advisor and the role of a custodian, we thought it may be helpful to first define the role of an investment advisor.
As a S.E.C. registered investment advisor, Wealthjar offers clients fiduciary advice about investing in securities and continuously manages the resulting portfolio according to the clients needs. To do this, our clients grant us discretionary authority to trade securities in their accounts. In other words, we advise and manage our client’s investments in stocks, bonds, and exchange traded funds.
A custodian, on the other hand, holds client securities in order to minimize the potential for theft or loss. Custodians generally hold securities in electronic or physical form. You can think of a custodian as holding securities for safekeeping on behalf of the client. Since custodians hold securities, they arrange settlements of trades done on behalf of the client in the client’s account. Custodians also manage cash transactions flowing in or out of the clients account such as deposits or withdrawals.
At Wealthjar, we have chosen to work with Charles Schwab & Co., Inc. as the primary custodian for our client’s accounts because they are a leading provider of low-cost trades and provide:
• The Schwab Security Guarantee, so you can feel confident your personal and financial information is protected, and;
• SchwabSafe®, a collection of security measures designed to keep your personal and financial information safe online.
We believe the use of a third-party custodian adds an extra layer of protection for our clients. As a client of Wealthjar, you will receive quarterly account statements from Charles Schwab & Co., Inc. as the custodian of your account in addition to any statements you receive directly from us.