Charles Schwab says advisors now can help clients manage investments held in health savings accounts. This program builds on the firm’s HSA brokerage-account window, which is integrated with the technology of major HSA providers and the platforms run by Optum Bank and Discovery Benefits.
The news comes five months after rival Fidelity launched a program to give RIAs, broker-dealers and other financial firms that use its clearing and custody services the ability to directly offer their investor clients HSAs, which Fidelity itself has done in workplaces since 2005.
Some $66 billion was held in 28 million HSAs as of year-end 2019, including about $50 billion in deposits and nearly $16 billion in investments, according to a March report from Devenir Research.
“Paying for health care in retirement is a top concern for Americans,” according to Mark Coffrini, senior vice president, Schwab Retirement Business Services. “This HSA program offers advisors a powerful tool to address this challenge, and can also help them deepen client engagement, increase referrals and achieve a competitive advantage.”
Charles Schwab Trust Bank custodied $7.4 billion in HSA investments as of Dec. 31, 2019.
Schwab’s Health Savings Brokerage Account includes a large number of mutual funds, exchange-traded funds, real estate investment trusts, individual stocks and bonds and other investments.
If clients with high-deductible health plans do not work with an HSA that gives them direct access to Schwab’s HSBA, they “can set up a consumer-direct HSA with one of the providers in Schwab’s network and then invest through Schwab’s HSBA,” the firm explained.
“Once the HSBA is funded, account owners can appoint their advisor to manage their investments,” it added on its Advisor Services website.
Also, individuals can have several HSAs. Thus, those who contribute to their workplace HSA via payroll deduction can transfer funds to a separate HSA managed by their advisor, Schwab says.
“They can continue making contributions as long as they remain covered by a high-deductible health plan,” according to the firm.