New Loan Request

Step 1: Obtaining Quote for Pledged Asset Line

<aside> 📌 Charles Schwab offers Pledged Asset Lines as a lending solution for clients. PALs are managed directly by Schwab Banking Solutions.

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  1. Advisor to email Helen Peralta at [email protected] and Jordan Senter at **[email protected] – as well as CC Mike McCarthy* **[email protected] on the email***. Helen is our assigned regional banking manager, Jordan is our regional banking associate. The email should include the following information:
    1. Loan Information:
      1. Loan size request (Schwab requires a minimum of $70K initial loan balance)
      2. Total assets available to be pledged, additional assets potentially available
    2. Client Information: Schwab will not contact the client, this is simply required information
      1. Name
      2. Email
      3. Phone number
  2. Helen will respond with a rate quote, which may be able to be negotiated further or agreed upon. Rate quote is locked in for 90 days.

Step 2: Completing the Pledged Asset Line Application

  1. Schwab will notify Mike McCarthy and the Advisor once the client is able to set up an application call
  2. Advisor will coordinate a time between the client and the Schwab PAL applications team to complete the application process. (Est: 30 minutes)
    1. Data needed for the application call found here: PAL Application Checklist
  3. Upon approval, Schwab will begin underwriting the loan and completing necessary documentation. The Schwab processing team will complete the application documentation needed for both the firm and the client. (Est: 1 week)
  4. Schwab will send the loan approval docs to the client (hard copy required, sent via UPS). The package includes:
    1. Prefilled applications completed on the application call for the pledged asset account and the credit line
    2. U-1 Statement of Purpose (funds not used to purchase margin stock)
    3. Investment Advisor Authorization granting your firm access to servicing information on the PAL
    4. Pledged Asset Line Agreement and PAL addendum
    5. Collateral Control Agreement
    6. Pledged Asset Account Agreement
    7. Debit Advance Letter (allows us to get payoff and send payoff wire to contra firm)
  5. Schwab will send IA Authorization Agreement to the advisor to sign on behalf of Savvy Advisors
  6. Once Schwab receives the signed documents and verifies all is in order, they will create the loan in the Schwab system, which will be viewable on the Schwab website

Payoff and Transfer Loan Request

  1. Helen from Schwab will respond with a rate quote, which may be able to be negotiated further or agreed upon. Rate quote is locked in for 90 days.

  2. Advisor will coordinate a time between the client and the Schwab PAL applications team to complete the application process. (Est: 30 minutes)

    1. Data needed for the application call found here: PAL Application Checklist

Step 3: Transfer and Payoff of Existing Loan

  1. Schwab will open the pledged account on behalf of Savvy, and the account will be titled accordingly
  2. Schwab will send a wire to the existing loan service provider to pay-off the existing loan. They will verify that the lien has been removed.
  3. Once verified, they will submit the transfer paperwork to move assets to Schwab from the contra firm - will be sent on the 4th business day after the loan has been paid off.
  4. Loan has now been re-established with the new rate at Schwab