Schwab Imposes New Account Curbs as Tax-Aware Strategies Boom

Charles Schwab Corp. is introducing new limits for clients looking to deploy tax-efficient long-short strategies, becoming the latest brokerage to rein in a booming but potentially risky part of its business.

The proportion of a Registered Investment Adviser’s total assets at Schwab that can be invested in so-called long-short separately managed accounts, or SMAs, can no longer exceed 30%, the firm told clients this week. New enrollments and incoming transfers to such accounts also face new minimums and leverage caps.