Alpaca has introduced custodial accounts as a new feature for its Broker API partners, marking a significant enhancement to its brokerage infrastructure. Announced on May 11, 2026, the rollout allows fintech platforms and institutional clients to let parents and guardians in the United States open and manage investment accounts for minors using the same developer-friendly API they rely on for standard brokerage services.
This addition not only broadens Alpaca’s account types but also gives partners fresh ways to expand their offerings and attract new user segments.
Custodial accounts provide a practical solution for families seeking to build wealth for the next generation.
In the US, these arrangements let adults serve as custodians for minors who cannot legally open brokerage accounts on their own.
Assets remain under adult oversight until the child reaches the age of majority—typically 18 to 21, depending on the state—creating a flexible, often tax-efficient pathway for gifting and investing.
Alpaca now supports the two most common structures: Uniform Gifts to Minors Act (UGMA) accounts and Uniform Transfers to Minors Act (UTMA) accounts. UGMA accounts accommodate cash, cryptocurrencies, stocks, bonds, and similar securities.
UTMA accounts extend these options further while following the same asset classes.
Availability varies slightly by jurisdiction: UGMA is recognized nationwide, whereas UTMA is offered in every state except South Carolina and Vermont.
Integration has been designed for simplicity and speed. The account-opening process mirrors that of regular individual accounts, with know-your-customer (KYC) verification focused solely on the adult custodian.
A dedicated minor identity object within the API securely stores the beneficiary’s details, such as name, date of birth, and tax identification number.
To safeguard the minor’s interests, the accounts operate on a cash-only basis.
Features like margin borrowing, short selling, and pattern day trading are unavailable, and the beneficiary cannot execute trades directly.
Alpaca handles the operational heavy lifting behind the scenes.
The firm acts as custodian for all assets, produces monthly statements, and manages annual tax reporting using the minor’s information to ensure full compliance with US regulations.
Partners can therefore concentrate on delivering an exceptional user experience without expanding their own back-office teams. The new capability delivers clear strategic advantages.
Partners can now engage families earlier in the investing journey, often years before young users would qualify for their own standalone accounts.
It also encourages households to consolidate assets under one platform and sets up a seamless transition path: once the beneficiary reaches adulthood, the custodial account can convert naturally into a standard individual brokerage account, boosting long-term client retention.
“Custodial accounts are a natural extension of our account infrastructure,” noted Hakan Bayraksan, Senior Director of Product at Alpaca.
“Along with expanding product capability, we’re also enabling families to invest earlier. This release enables our partners to support long-term investing while maintaining the operational simplicity and compliance standards they expect from Alpaca.”
By introducing custodial accounts, Alpaca continues its mission to democratize financial services.