Every so often, clients may receive a letter from Charles Schwab that looks concerning at first glance. The notice usually says something like:

The prior authorization instructions you granted your advisor have expired. The standing authorization(s) shown below has expired after being inactive for three or more years.

You can see an example of such letter here .

It then lists the account and the expired standing instruction, such as a transfer to another account you own. While the wording may sound serious, in practice these letters are routine, regulatory in nature, and rarely require action.

What are standing instructions?

Standing instructions, also called “standing letters of authorization” or SLOA, are pre-approved directions that allow your advisor to move assets from one of your account to another specific account or payee without needing your approval each time. For example, you might set up a standing instruction to:

• Transfer money regularly from your brokerage account to your checking account.
• Move funds from your brokerage account to your traditional IRA or Roth IRA in order to fund them each year.
• Move funds from your traditional IRA to your Roth IRA in order to assist with Roth conversions.
• Move funds from your traditional IRA to your brokerage account to assist with Required Minimum Distributions (RMDs)

These instructions streamline transactions by eliminating repeated paperwork for predictable, recurring transfers.

Why does Schwab send expiration notices?

Financial institutions operate under a network of regulations designed to protect clients and prevent unauthorized activity. Schwab automatically expires standing instructions that have been inactive for three years or longer. The expiration serves three main purposes:

1. Regulatory compliance. Brokerage firms must show regulators they are periodically confirming that clients still intend for an advisor to have this type of transfer authority.
2. Fraud prevention. If an instruction has not been used in several years, it is safer to remove it rather than leave it open indefinitely. This helps prevent misuse if account circumstances change.
3. Client clarity. Expiration notices remind clients that these instructions exist, giving them a chance to decide whether they should be reestablished or left to lapse.

What does this mean for your account?

When Schwab expires a standing instruction:

• Your ability to withdraw or transfer money from your account is unaffected.
• Your advisor can no longer initiate transfers under that specific instruction.
• Any other instructions or authorizations you have provided remain active.

In other words, the expiration only removes an unused advisor authority. It does not limit your ownership rights or reduce your control over your assets.

How important is this notice?

For most clients, these letters are relatively unimportant. They rarely affect day-to-day account management for several reasons:

• If the instruction has not been used for three years, it is not essential to your annual tasks.
• If you do want the authorization to continue, your advisor can easily reestablish it with a new form or eAuthorization.
• The letter does not change your ability to access or move your money.

Many clients simply note the expiration and take no further action.

What if you want to renew a standing instruction?

If you want, reestablishing a SLOA is straightforward. You can contact your advisor, who will provide the appropriate form or eAuthorization email. Once completed and approved by you, Schwab will reinstate the authorization.

For example, if you once approved a standing letter of authorization for your advisor to journal funds between two accounts in 2023, that instruction will expire in 2026 if you haven’t used it during those three years. If you want to authorize your advisor to journal between those two account again, a fresh authorization is all that is required.

Why Schwab emphasizes client protection

Brokerage firms handle sensitive financial assets, so their policies lean toward caution. By expiring inactive standing instructions, Schwab demonstrates to regulators and clients that they are limiting dormant authorizations. The intent is to protect clients from both internal errors and external fraud.

This fits within a broader set of safeguards, such as confirming wire transfers with verbal authorization or requiring two-factor authentication for account access. Each measure may feel redundant at times, but collectively they reduce risk.

Putting the notice in perspective

Clients sometimes ask whether these notices indicate a problem with their account. The answer is no. They are routine compliance letters. Unless you wanted your advisor to use the standing instruction again, the expiration is inconsequential.

In fact, many clients appreciate the additional layer of oversight. By default, unused instructions are quietly removed, ensuring that old authorizations do not linger.

Conclusion

Receiving an expiration notice from Schwab about a standing instruction is not a cause for concern. These notices are best viewed as reminders that your account is being managed with care and compliance in mind. If you have questions, your advisor can confirm whether the expired instruction is still relevant to your financial plan.

Photo by Cédric Dhaenens on Unsplash