/account-opening-workflow

name: account-opening-workflow
description: "Design and operate back-office account opening pipelines from application intake through custodian submission and activation. Use when building account opening automation, reducing NIGO rejection rates from custodians or clearing firms, defining document requirements for trusts, entities, IRAs, or estate accounts, setting up multi-custodian account opening across Schwab, Fidelity, or Pershing, troubleshooting account opening failures or processing delays, or benchmarking cycle times and first-submission acceptance rates. For risk-based approval tiers and compliance screening requirements, see account-opening-compliance."

Account Opening Workflow

Core Concepts

Account Type Determination and Registration

Account type determination is the foundational decision in the account opening workflow. The registration type dictates the document requirements, approval gates, tax treatment, titling rules, and custodian submission path. Operations teams must maintain a comprehensive account type matrix that maps each registration type to its downstream processing requirements.

**Individual and joint registration types:**

• **Individual** — single natural person as owner; titled in the individual's legal name; SSN as TIN; simplest registration and the baseline for all account opening processes
• **Joint Tenants with Right of Survivorship (JTWROS)** — two or more co-owners with equal, undivided interest; on death of one owner, the surviving owner(s) automatically inherit the deceased owner's share without probate; all owners must sign account opening documents; titled as "John Smith and Jane Smith JTWROS"
• **Tenants in Common (TIC)** — two or more co-owners with specified ownership percentages (need not be equal); on death, the deceased owner's share passes to their estate, not to the surviving co-owner(s); ownership percentages must be recorded and may affect tax reporting; titled as "John Smith and Jane Smith TIC"
• **Community Property** — available only in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin); assets acquired during marriage are jointly owned; specific titling and tax implications vary by state; some custodians treat community property accounts differently from other joint account types
• **Community Property with Right of Survivorship** — a hybrid available in some community property states that combines community property tax treatment with automatic survivorship; not all custodians support this registration type

**Trust registration types:**

• **Revocable (living) trust** — grantor retains control and can modify or revoke the trust; typically titled as "John Smith, Trustee of the Smith Family Trust dated 01/15/2020"; grantor's SSN is often used as TIN; account opening requires trust certification or relevant pages of the trust agreement showing trust name, date, trustees, and investment powers
• **Irrevocable trust** — grantor has permanently relinquished control; separate tax entity requiring its own EIN; beneficial ownership certification required under FinCEN CDD Rule; titled in the trust's legal name with trustee designation; requires more extensive documentation including the full trust agreement or comprehensive trust certification
• **Testamentary trust** — created by a will and comes into existence upon the grantor's death; requires letters testamentary, death certificate, and court-certified copy of the will provisions creating the trust; account opening is typically manual due to the complexity and variation in court documentation

**Entity registration types:**

• **LLC (Limited Liability Company)** — requires articles of organization, operating agreement (or certificate of formation in some states), EIN, beneficial ownership certification; titled in the LLC's legal name; operating agreement must authorize the opening of investment accounts and identify authorized signers
• **Corporation (C-Corp and S-Corp)** — requires articles of incorporation, bylaws, corporate resolution authorizing the account and designating authorized signers, EIN, beneficial ownership certification; S-Corp election (IRS Form 2553) may be relevant for tax reporting but does not change account opening requirements
• **Partnership (General Partnership, Limited Partnership, LLP)** — requires partnership agreement, EIN, identification of general partner(s) who have authority to act on behalf of the partnership; limited partners typically do not have signing authority unless specified in the partnership agreement
• **Sole Proprietorship** — may use the individual's SSN or a separate EIN; requires DBA documentation if operating under a trade name; some custodians treat sole proprietorship accounts as individual accounts with a DBA designation

**Retirement account types:**

• **Traditional IRA** — tax-deductible contributions (subject to income limits if the owner participates in an employer plan), tax-deferred growth, required minimum distributions beginning at age 73 (SECURE 2.0; rises to 75 in 2033); requires IRA adoption agreement, beneficiary designation, and IRA disclosure statement
• **Roth IRA** — after-tax contributions, tax-free qualified distributions, no RMDs during the owner's lifetime; same documentation requirements as Traditional IRA plus verification of Roth eligibility (income limits)
• **SEP IRA** — employer-funded; contributions up to 25% of compensation or the annual dollar limit; requires SEP plan document (IRS Form 5305-SEP or prototype plan) and IRA adoption agreement; employer must execute the plan document before the account can be opened
• **SIMPLE IRA** — salary deferral plus employer match or non-elective contribution; requires SIMPLE plan document (IRS Form 5304-SIMPLE or 5305-SIMPLE) and SIMPLE IRA adoption agreement; must be established between January 1 and October 1 of the plan year
• **Inherited IRA** — beneficiary account established upon th