Brokerages Are Handing Teenagers the Financial Wheel, and Parents Need to Buckle Up

Move over, day traders — the after-school crowd is here. Teenagers can now trade stocks independently as Charles Schwab launches its Teen Investor account alongside Fidelity Investments’ Youth Account. The setup moves away from traditional custodial accounts, where parents controlled every transaction. Now, 13–17-year-olds place trades themselves, while parents are limited to viewing activity and can only intervene by closing the account.

• Guardrails remain in place with no access to options, margin, or leveraged ETFs, while Schwab has no contribution cap, and Fidelity limits deposits to $30K per year.
• Families who want parental control can use Greenlight’s service ($11/month), which keeps accounts parent-owned and income taxed under the parent.

Worth the risk? Tax treatment remains the same as custodial accounts, with the first $1.35K in investment income tax-free, the next $1.35K taxed at the child’s rate, and anything above 2.7K taxed at the parent’s rate under Kiddie Tax rules. The bigger risk is financial aid, as these accounts count as student assets and are weighed more heavily. Getting teens financially fluent early makes sense — just make sure you’ve read the fine print before handing over the keys.