Series 6: 2.2.7.3. Custodial Accounts

2.2.7.3.  Custodial Accounts

Custodial accounts are accounts administered by an independent person (custodian) for the benefit of (FBO) an individual accountholder (beneficiary). When custodians have third-party trading authorization allowing them to make trades in the accounts, they too have a fiduciary responsibility. Custodial accounts include employee retirement accounts and accounts belonging to a minor.

A Uniform Gifts to Minors Act (UGMA) account is a custodial account where an adult opens and manages the account for a minor. There can only be one custodian and one min