Cleared and Settled
Funds must be ____ to place trades in options and OTC securities.
What is "cleared"
Schwab has moved to a full Cash Up-Front (CUF) approach, which will require clients to have cash or margin buying power equal to or in excess of their order before placing an order.
This is what must be done when removing an M restriction
what is "Leave a PERMANENT ACCONT level note"
https://schwab.sharepoint.com/sites/RetailKnowledge/SitePages/KC0100070.aspx
This is the name of the KC page where you can find Risk levels and limits for trading different securities.
What is Risk Trading and Risk report?
https://schwab.sharepoint.com/sites/RetailPolicy/SitePages/KC2000460.aspx
Risk level will most likely be level 1 for our team, if you are unsure check with manager.
This is what a broker must say at the beginning of an outbound call
what is "state you are on a recorded line"
https://schwab.sharepoint.com/sites/AdvisorServicesKnowledge/SitePages/KC0201046.aspx
Any instruction given or action taken by a registered rep that differs from a clients request or expressed intent of an order
What is a Trade Error
Trade errors occur regardless of whether the action results in a loss, gain or net zero for a client or Schwab
Trade errors can be classified as a TERR or Broker Error/no TERR
A client transfers in $1000 on Monday via ML transfer.
The client logs in on Tuesday once the funds have posted and attempts to place a trade for INHD.
Why might the client get an error message saying he cannot place the trade?
What is "The funds are not cleared"
The stock INHD is priced below $1 and requires cleared funds, as would any OTC stock.
Transferring in via money link would mean the funds would clear 3 business days after posting.
A rep can't submit a wire on behalf of a client even with a SLOA but what other 2 options does the rep have to assist the client?
what is "Walk the client through it online or reach out to MMAT"
https://schwab.sharepoint.com/sites/RetailKnowledge/SitePages/KC0100184.aspx
You should reach out to this group or this person for trade risk-related approval
What is "Trade Risk and Resolution or your Manager"
These are the 2 types of verifiers that must be used to verify a high fraud risk client
what is "Something they have and something they know"
https://schwab.sharepoint.com/sites/RetailKnowledge/SitePages/KC0102823.aspx
What is "an error reported on a representative in which documentation is required but nothing is filed."
What is "Broker Error/ No Terr"
Not every broker error will result in a TERR.
Examples include:
Attempting to cover up an error by simply placing mitigating trades, without involving your Branch or Team manager is a violation of firm policy
Attempting to resolve an error by giving the client a client service gesture, free trade(s), or by reversing fees is also a violation of firm policy
A client says she wants to place a trade in her cash account that is currently SCUF restricted due to a settlement violation.
She has no available cash in her account and wants to know if she can transfer funds in to place her trade.
What are her options?
What is "The funds are not cleared"
The stock INHD is priced below $1 and requires cleared funds, as would any OTC stock.
Transferring in via money link would mean the funds would clear 3 business days after posting.
A rep received the symbol, action, quantity and price from the client and submitted the order. Why was this a broker error?
What is "did not receive time in force for the order"
https://schwab.sharepoint.com/sites/RetailPolicy/SitePages/KC2000429.aspx
A client would like you to place a trade to buy $450,000 of SWVXX. What kind of approval would you need if you place this trade for the client?
None
Risk level I allows for trading up to $500k in Schwab's prime advantage funds
These are the eligible verifiers for assisting a client with a password reset
What is "Voice ID, SMS, Mobile, Outbound call (established #)"
https://schwab.sharepoint.com/sites/RetailKnowledge/SitePages/KC0100126.aspx
You mistakenly enter the wrong quantity for a trade and it has filled.
The market is still open for regular trading what should you do next?
What is contact your manager OR contact TRR
You should NOT attempt to place a trade to mitigate or cover up an a trading error even if doing so would be to the clients benefit.
This is a violation of firm policy if either or both are available.
NOTE: There may be some scenarios or unique risk situations, including off-hours and system outages, when TRR cannot be contacted or may only be available via chat, where it makes sense for a representative or TM to trade out of an error to mitigate risk (and follow up with TRR). As a general rule, however, TRR should perform corrective action in client accounts
This restriction will prevent a client from placing trades using the proceeds of a sell order
What is a SCUF restriction?
Account holder calls in to remove her grandson who is the LTA on her account. The rep gets her verified and assists with her request. Why did the rep get a SYNC?
What is "No LOA was received"
https://schwab.sharepoint.com/sites/AdvisorServicesKnowledge/SitePages/KC0201208.aspx
This is required when the client does not have funds or securities in the account at the time of the order and that order exceeds the rep's risk approval level.
What is Prior supervisory approval
Prior supervisory approval is needed when the client does not have funds or securities in the account at the time of the order and that order exceeds the rep's risk approval level.
A caller shows the following behaviors when going through KBQ/OOW verification:
- Asks to repeat questions each time they are asked
They contuously stall and ask to hold after you ask a question
They say they do not want to answer a question b/c its private or without explanation
They provide multiple incorrect answers to the same question.
All of these would be considered ___ _____
You must give this disclaimer if a client calls in with a trade dispute after a trade has settled (T+1 or later)
What is Market Risk
"At this time (Mr. Client), we have not been able to fully research your concerns. We value your business, and if we determine that you are due an adjustment, we will change the trade accordingly. In the meantime, there is market risk, meaning that the price of (the security) could move up or down. You therefore need to make your own decision about whether you want to buy, sell, or hold this security. Please understand that if Schwab's research demonstrates that your dispute is valid, Schwab can only offer an adjustment for [SECURITY AND QUANTITY] which would have occurred between [ALLEGED INCIDENT TIME] and [CURRENT TIME]."
In May 2024 the SEC amended Rule 15c6-1 shortening the settlement cycle for all security transactions from two business days to one.
This is commonly referred to as:
What is T+1?
T+1 refers to settlement of securities
(Trading activities)
You can use this KC tool to avoid a sync when transferring funds or assets between accounts for a client.
A client would like to close their position in a stock. Their shares total $45,000. You will need this should you place the trade for the client.
What is Subsequent supervisory review?
Subsequent supervisory review is needed when the order exceeds the rep's risk level but the client has sufficient funds or securities in the account at the time of the order.
These are the 3 Types of Red Flags of Fraud
What are "Verbal/written" "Behavioral" and "Account History"
These are important to be familiar with and should be on the mind when assisting any clients:
https://schwab.sharepoint.com/sites/RetailKnowledge/SitePages/KC0100780.aspx
This mnemonic tool sounds like a kids game but can save you from getting a TERR.
What is BOPT?
It is very simple and very easy to brush aside but checking Balances, Open orders, Positions, and Transactions can prevent overspending, duplicating orders, selling an account short when placing trades for clients.
Incorporating BOPT along with repeating order details and giving readbacks will cover most of the common causes of TERRs