Schwab is raising the asset minimum for its tax-aware long-short separately managed accounts to $10 million, up from $1 million, the firm said in a note sent to clients this week.
The firm will also stop accepting new clients or fresh capital into portfolio margin accounts that use greater leverage, according to the note first reviewed and reported by Bloomberg.
The change, which takes effect Sept. 16, is the third time this year Schwab has tightened access to the strategy, a sign that one of the most talked-about tax plays in wealth management is running into growing skepticism from the custodians that make it possible.
Long-short SMAs let investors bet on and against companies simultaneously, generating capital losses that can be used to offset gains elsewhere in a portfolio. The approach has drawn a wave of affluent clients over the past few years, but it depends on borrowed money and complex trade construction that regulators and custodians alike have flagged as carrying outsized risk.
Schwab had already throttled the strategy earlier this year by limiting the portion of an RIA's assets that can be allocated to long-short accounts, a move that followed a similar pullback at rival custodian Fidelity Investments.
In its note to clients this week, Schwab said the pace of growth in these accounts was becoming difficult to sustain. "The current pace of growth of these strategies could limit our ability to support the full range of capabilities you and your clients rely upon from us," the firm wrote, as per Bloomberg.
A Schwab spokesperson told the news outlet that "these changes apply only to new accounts – current clients will continue with no impact to existing terms." The representative said the firm remains "committed to helping advisors meet client needs through a broad range of tax-aware investment solutions."
Fidelity has gone further to throttle the strategy, as it has paused all new client onboarding into long-short SMAs entirely. After announcing the pause on new accounts and funding in those programs in December 2025, it went on to raise financing costs for exiting clients. Ehren Stanhope, chief investment strategist of Franklin Templeton's custom indexing platform Canvas, previously told InvestmentNews that advisors could adapt to the Fidelity pause because Schwab had been available as an alternative for long-short strategies.
At the time, Gabriel Shahin, president of Falcon Wealth Planning, said Fidelity raised its financing rate on long-short strategies from 60 basis points to 152 basis points – well above the 40-to-120-basis-point range he said Schwab charges for the same strategies – prompting him to move all of his long-short SMA business to Schwab.
Custodians are pulling back on their support for RIAs in other ways. Last month, Schwab announced a higher asset minimum for client referrals through its Schwab Advisor Network to $5 million from $2 million, effective Jan. 5, 2027. The $2 million floor was introduced last year, replacing a previously set requirement of at least $500,000 in assets.
Chris Bisenius, president of Windward Recruiting, said the change in the referral program is intensifying competition for a shrinking pool of qualified leads.
"It just reduces the amount of flow," he said. "If it reduces the amount of lead going out all over to everybody, then everyone's fighting for less."
That may not be such a big loss for independent RIAs, who now have more options to get leads to support their organic growth. Aside from the referral program that's gaining steam at Robinhood, Goldman announced it was getting into the referral business earlier this year.
Beyond that, FINNY recently unveiled a new pricing model for its client prospecting platform, which leaders at the wealth tech firm said was designed to help "unrig" the organic growth game for independent RIAs.
Advisors who lead with cost savings when pitching pooled employer 401(k) plans may be underselling — and misrepresenting — the fiduciary value.
The Minneapolis-based consolidator's addition of a $345 million Anchorage RIA comes as small sellers navigate a volatile 2026 deal market.
Average 401(k) balances jumped 10.5% last quarter and small business retirement plan enrollment kept climbing, according to new Fidelity data.
Colorado-based RIA Summit Wealth Group acquires Portland's Financial Investment Team, expanding to 12 offices in six states.
Osaic and &Partners each land former Commonwealth teams, while Prospera welcomes two East Coast veterans to its network.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
