Recent news about two large regional bank failures – Silicon Valley Bank and Signature Bank – has been concerning and unsettling to say the least. Here at Towerpoint Wealth, we have recently had a few clients ask us about how the fallout may affect our primary custodian that we have partnered with to hold and custody our client assets – Charles Schwab. While no financial institution has completely escaped the aftermath nor consequences of this this crisis, we are confident that Schwab is fundamentally different in many ways from those banks in the news.
Our confidence in Schwab is underpinned by Schwab’s conservative balance sheet, strong liquidity position, and diversified base of more than 34 million account holders.

In this video, CNBC interviews Walt Bettinger, Charles Schwab’s CEO, as he discusses these recent events, and why Schwab remains a safe port during this temporary storm.

The Charles Schwab Corporation (“Charles Schwab”)
Charles Schwab does not have any direct business relationship with Silicon Valley Bank or Signature Bank, and do not have exposure to any direct credit risk from either.

Charles Schwab has a large national clientele. Headquartered in Texas and serving a diverse, broad base of customers, the business is not concentrated in any particular region of the country or industry such as California’s Silicon Valley.

Charles Schwab is regulated by the Federal Reserve and the Texas Department of Savings and Mortgage Lending, and its subsidiaries are subject to stringent rules of other regulators.

There are several sides to Charles Schwab’s business, most notably their brokerage and banking businesses, each of which are separately regulated for safety and soundness.

Brokerage – Charles Schwab & Co., Inc. (“Schwab”)
Customer brokerage investments at Schwab such as stocks, bonds, mutual funds, exchange traded funds, and money market funds are held at third party depository institutions and custodians such as the Depository Trust Company and Bank of New York for the exclusive benefit of clients. With Federal Reserve supervision, Schwab has additional regulation that goes beyond that of just brokerage or mutual fund company regulation.
In the very unlikely event that Schwab should become insolvent, these segregated securities are not available to general creditors and are protected against creditors’ claims.

Brokerage assets are covered by SIPC insurance, which works to restore to customers their securities and cash – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000 for each separate legal account, which includes a $250,000 limit for cash held in a brokerage account. Of the few times SIPC insurance has been used in the securities industry, 99% of eligible client claims got all their assets back.

Schwab also maintains excess SIPC insurance protection of up to a combined total of $600 million for additional client protection.
Schwab has served its brokerage clients for 50 years through all financial environments and has always remained solvent.

Banking – Charles Schwab Bank, SSB (“Charles Schwab Bank”)
Charles Schwab Bank was established 20 years ago with the singular purpose of serving Schwab investor clients with straightforward, convenient banking products and services like checking, savings, CDs, and mobile banking.

Schwab brokerage investments are separate from Schwab customer cash deposited at Charles Schwab Bank.

Charles Schwab Bank does not offer commercial deposit accounts that provide businesses with payroll and other business-oriented cash management services.
All Charles Schwab bank deposit accounts are protected by FDIC insurance up to FDIC limits. Through our three bank charters, we are able to provide our clients with $250,000 in FDIC insurance, per depositor, per bank.
Because of the type of clients we serve, and with our multiple charters, over 80% of client cash held at Charles Schwab Bank is insured dollar-for-dollar by the FDIC. That percentage is among the highest of the top 100 U.S. banks. As a comparison, at the two banks in the news the last few days, just between 2% and 20% of their deposits were insured.
We maintain capital well in excess of regulatory requirements, held in a high-quality and relatively small amount of well-collateralized loans and a conservative investment portfolio that is 80% comprised of securities backed by the U.S. Treasury and various government agencies.
As a further safeguard, Charles Schwab Bank has access to substantial borrowing capacity under a range of credit facilities. That borrowing capacity helps provide the firm significant access to liquidity if needed….(read more)

LEARN MORE ABOUT: Bank Failures

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing

Towerpoint Wealth, Charles Schwab, and the Recent Regional Bank Failures

In today’s ever-changing financial landscape, it is essential for individuals and institutions to stay informed about the latest wealth management and investment opportunities. One company that has been making waves in the industry is Towerpoint Wealth, in partnership with Charles Schwab. Additionally, recent regional bank failures have underscored the need for reliable companies like Towerpoint Wealth and Charles Schwab.

Towerpoint Wealth is an independent registered investment advisor (RIA) founded in 2017, located in Sacramento, California. The company offers comprehensive wealth management services to individuals, families, and institutions. What sets Towerpoint Wealth apart from other firms is their dedication to creating personalized strategies that align with each client’s unique financial goals.

Partnering with Charles Schwab, one of the largest and most trusted providers of financial services, Towerpoint Wealth gives its clients access to a wide range of investment tools and resources. From individual retirement accounts (IRAs) to exchange-traded funds (ETFs) and mutual funds, Towerpoint utilizes Schwab’s extensive platform to provide their clients with a diverse investment portfolio.

However, while Towerpoint Wealth and Charles Schwab offer stability and reliability in the investment realm, recent failures in regional banks have reminded us of the importance of choosing trustworthy financial institutions. In the past decade, several regional banks have faced financial crises, leading to closures and significant losses for their customers. These incidents have highlighted the significance of partnering with established firms like Towerpoint Wealth and Charles Schwab.

The failures of these regional banks were often due to imprudent lending practices, poor risk management, or a lack of proper regulatory oversight. The collapse of such banks can cause immense financial turmoil and have a ripple effect on local economies. These events emphasize the importance of conducting due diligence and entrusting hard-earned money and investments to experienced professionals.

Amidst the uncertainties brought about by regional bank failures, Towerpoint Wealth and Charles Schwab’s partnership ensures that clients have access to secure investment options and robust risk management strategies. By leveraging the expertise of these established companies, individuals can minimize their exposure to risks associated with smaller, less regulated institutions.

Additionally, Towerpoint Wealth’s commitment to personalized investment strategies means that clients can avoid the one-size-fits-all approach often implemented by regional banks. The company’s dedicated team of advisors takes the time to understand their clients’ financial aspirations and risk tolerance to design individualized wealth management plans.

Towerpoint Wealth and Charles Schwab’s collaboration signifies the importance of working with reputable partners in the financial industry. While regional bank failures may periodically make headlines, individuals and institutions can rely on established companies that prioritize stability and implement responsible investment strategies.

In summary, Towerpoint Wealth, in partnership with Charles Schwab, offers clients a reliable and personalized approach to wealth management. Their collaboration ensures access to a wide range of investment opportunities while minimizing exposure to risk associated with regional bank failures. By choosing institutions committed to stability and responsible practices, individuals and institutions can confidently navigate the complex world of finance.