Products June 21, 2010

Schwab Offers Help with Cost Basis Reporting Changes

As part of a rollout of tools and resources to help advisers transition to new cost basis reporting requirements, Charles Schwab announced a new report to help advisers plan for the change.
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Schwab noted in a press release that the Emergency Economic Stabilization Act of 2008 mandates for the first time that custodians and broker-dealers must report the adjusted cost basis of sold securities to advisers’ clients and to the Internal Revenue Service on Form 1099-B. The requirements will be phased in over three years, beginning on January 1, 2011, with equities acquired and sold on or after this date.  

The Schwab Market Knowledge Tools report, “Preparing for the New Cost Basis Legislation,” reviews the changes in the reporting of adjusted cost basis of sold securities, highlighting the key changes that begin in 2011.   

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According to the press release the report recommends steps advisers can take now to improve clients’ experience:

  • Create a communications plan. Fallout from any investor confusion around the legislation may land with advisory firms. Actively reaching out to clients and offering guidance can reduce anxiety that may arise. Schwab will also be communicating directly with investors later in 2010 about the upcoming changes.
  • Anticipate client needs. Certain clients may want to access cost basis information for all securities, regardless of whether they are covered by the legislation or not, while others may want access to the information periodically. Firms that understand how Schwab and other custodians are reporting stand to create a smoother experience for their clients.
  • Evaluate the impact on their back office. Advisers should evaluate their portfolio management systems and ensure they are in synch with the custodian’s data. Advisers should also stay up to date on Schwab’s plans for complying with the legislation, including technology upgrades that may impact workflow.

On June 22, 2010, Schwab Advisor Services will host the latest in a series of Webcasts to help advisers understand the cost basis legislation and what it means for their firms titled “An Advisor’s Perspective on Cost Basis Legislation.” Beginning at 1 p.m. PT / 4 p.m. ET, Schwab’s Brian Keil will lead an hour-long presentation with two advisers and conclude with an interactive question-and-answer session with industry experts and Schwab representatives.   

Advisers who want to attend the June 22 Webcast or to access earlier Webcasts in the series should visit the cost basis resource section of Schwab Advisor Center, Schwab’s website for its RIA clients.   

Additionally, Schwab Advisor Services will offer a special session, “Cost Basis Legislation and its Impact on Your Firm,” at its upcoming SOLUTIONS workshops across the country this July and August. The session will detail Schwab’s tools and offer practical guidance on dealing with workflow changes that may be necessary to align with Schwab’s cost basis data reporting system.  

Schwab Advisor Services said it is planning to introduce technology enhancements to enable advisers to more easily stay in synch with Schwab’s cost basis data, including the ability to download and import Schwab’s cost basis data into their portfolio management system and online functionality to provide cost basis instructions on equity trades via Schwab’s online trading platform.

Deals & People June 18, 2010

BNY Mellon Makes Canadian Wealth Management Buy

BNY Mellon has made its first wealth management acquisition in Canada.
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The firm said that it has entered into an agreement to acquire I(3) Advisors of Toronto, an independent wealth strategy company with more than C$3.5 billion in assets under advisement.

Terms of the deal were not disclosed and it is expected to close in the third quarter, subject to regulatory approvals.

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June Ntazinda, CEO of I(3) Advisors, will remain as chief executive following the closing and will report to BNY Mellon Wealth Management Executive Vice President Don Heberle. “We are pleased to be working with June and I(3), whose expertise, integrity and style impressed us from the very beginning,” Heberle said. “The firm is well-known and highly respected in Canada, making it an excellent choice.”

“Both BNY Mellon and I(3) are distinguished by their commitment to client service and satisfaction and delivering trusted guidance to help clients achieve their financial goals. Together, we will be able to offer a whole new level of service to wealthy investors,” said BNY Mellon Wealth Management CEO Larry Hughes. “Canada’s high net-worth market represents a very attractive opportunity for BNY Mellon as we accelerate our global expansion and seize new opportunities in dynamic markets.”

Formerly Ernst and Young’s wealth management arm in Canada, I(3) Advisors was established in 2005 under the leadership of Ntazinda. The firm has grown its assets under advisement from C$1.8 billion to more than C$3.5 billion and has earned the reputation of Canada’s independent investment counselor of choice known for an integrated and holistic approach to wealth management.

Ntazinda noted that the transaction offers several advantages to I(3) clients, including:

  • Broader global asset management opportunities
  • Increased access to alternative investment opportunities
  • Enhanced technology and reporting capabilities
  • Expanded banking and wealth planning services

According to a press release, BNY Mellon has a robust presence in Canada, including: CIBC Mellon offices in Toronto, London (Ontario), Calgary, Halifax, Montreal and Vancouver, BNY Mellon Asset Management in Toronto, BNY Mellon Asset Servicing in Toronto, and Eagle Investment Systems in Toronto and Montreal.

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