Long/short: While Fidelity pauses, Schwab CEO tells RIAs "We’d love to support you"

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FYI: The Tax-Aware Long/Short Working Group will meet on Day 2 of Basis Northwest.

We’re going til at least 4 PM PT on both days. Buckle up!

At Future Proof Citywide last week, the Compound and Friends guys asked Schwab’s CEO about tax-aware long/short.

Tax-aware long/short strategies (e.g., 130/30, 250/150, etc.) are white-hot in taxable wealth nowadays. Here’s a refresher for anyone getting up to speed.

In December, Fidelity announced it would pause new tax-aware long/short account openings, then in February indefinitely extended the pause. Here’s my reporting.

Fidelity indefinitely pausing new long/short account openings

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Tax Alpha InsiderBrent Sullivan

Advisers report Fidelity pauses new tax-aware long/short accounts until mid-Jan 2026

This article is educational content, not investment, tax, or legal advice. Hire an adviser or tax attorney for personalized guidance.

Tax Alpha InsiderBrent Sullivan

Many people are speculating about why Fidelity paused, but that's a topic for another post.

Fidelity-only advisers have been scrambling to onboard at other custodians, namely Schwab, but also Pershing and to a lesser extent Goldman Sachs, who are filling the vacuum Fidelity left.

Schwab and Pershing have recently started lowering their financing spreads (margin minus short rebate), which was one of Fidelity’s competitive advantages, to win tax-aware long/short business.

Here’s the conversation w/ Schwab’s CEO: