Schwab Offers Integrated Solution for Advisers to Manage HSAs

The firm has teamed up with health care financial services providers Optum Bank and Discovery Benefits.

Charles Schwab has launched integrations with two health savings account (HSA) providers to enable advisers to more easily manage and invest their clients’ HSA assets.

The adviser-managed, consumer-direct HSA program uses Schwab’s Health Savings Brokerage Account, a brokerage window within an HSA that delivers broad investment capabilities for advisers and their clients.

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“We are excited to work with Optum Bank and Discovery Benefits to give our advisers an opportunity to invest their clients’ HSA money,” Mark Coffrini, senior vice president, Schwab Retirement Business Services, tells PLANADVISER. “We discuss HSAs a lot with RIAs [registered investment advisers]. A lot of our RIAs think HSAs are a key product.

“Much like IRAs [individual retirement accounts], with an HSA, you can have any provider you want,” Coffrini continues. “A lot of company HSAs don’t have access to a variety of investment options or give people access to an adviser or RIA. Many people are interested in having their adviser manage their HSA.”

Advisers or RIAs can work with their clients to determine if an HSA makes sense for them. “In many situations, we think it does because of its triple tax benefit,” Coffrini says. “The money is invested pre-tax. Earnings are tax free, and withdrawals are tax free if they are used for qualified medical expenses.”

To implement the solution, users can go to either Optum or Discovery and open up an HSA, which can then be linked to a Schwab brokerage account, where “all the tools and investment options will be available to the investment adviser,” Coffrini says.

According to data  from Devenir, there are 28 million HSA accounts in the U.S. holding nearly $66 billion in assets as of year-end 2019. Of this money, $50.2 billion is in cash deposits and $15.7 billion in investments.

“Paying for health care in retirement is a top concern for Americans,” Coffrini says. “This HSA program offers advisers a powerful tool to address this challenge, and can also help them deepen client engagement, increase referrals and achieve a competitive advantage.”

Schwab notes that individuals can hold multiple HSA accounts, such as one with their workplace and a separate HSA managed by their advisers.