Can You Move Stocks From One Broker to Another?

Transferring investment accounts between brokerages is common for investors seeking lower fees, diverse options, or improved customer service. Moving holdings is generally possible, allowing consolidation or finding a platform that suits your investment strategy.

Understanding Stock Transfer Methods

The primary method for transferring most publicly traded securities between brokerage firms is the Automated Customer Account Transfer Service (ACATS). This system streamlines the movement of entire investment accounts, or partial holdings, between brokers. ACATS enhances efficiency, allowing transfer of various assets, including stocks, bonds, options, and mutual funds, provided both firms are members of the National Securities Clearing Corporation (NSCC).

While ACATS handles most transfers, certain situations require alternative methods. Shares held directly with a company (e.g., through a Direct Registration System or DRS) or physical stock certificates cannot be transferred via ACATS. These assets require specific instructions to the transfer agent or issuing company for electronic re-registration or conversion into a transferable form. These transfers are less frequent but viable for specific holdings.

Transfers distinguish between “in-kind” and “cash.” An in-kind transfer moves actual securities, like stock shares, between accounts without selling. This approach is preferred as it avoids potential tax implications, particularly capital gains. Maintaining the original investment position ensures continuous market exposure.

Conversely, a cash transfer involves selling securities in the old account, transferring cash, and repurchasing new securities in the new account. This method can trigger capital gains taxes on appreciated assets, resulting in immediate tax liability. It also means the investor is out of the market during the transfer, potentially missing market movements. An in-kind transfer is recommended to preserve investment positions and defer tax events.

Gathering Information for a Transfer

Before initiating any transfer, gather specific information and documentation. You will need accurate account details from both your existing (delivering) and new (receiving) brokerage accounts. This includes the full account number, precise account type (e.g., individual taxable brokerage, Traditional IRA, Roth IRA, joint account, trust account), and exact account registration name. Discrepancies can cause significant delays.

Recent account statements from your old brokerage are invaluable. These statements provide a record of your current holdings, including security names, quantities, and cost basis. Verifying this information helps prevent errors and ensures all assets are accounted for. The new brokerage may request a recent statement to verify holdings before processing the transfer.

The primary document for initiating a transfer is the Account Transfer Form, provided by your new brokerage. This form authorizes the new broker to request assets from your old firm. Accurately fill in details such as your old brokerage’s name, its account number, and whether you intend a full or partial transfer. For a partial transfer, specify the exact securities and quantities to be moved.

Account registration information on the transfer form must precisely match details on file with your old brokerage. For instance, an individual account must transfer to an individual account with the same name, and an IRA to another IRA. Mismatched information frequently causes transfer rejections or delays, requiring resubmission.

Initiating and Monitoring Your Transfer

Once all necessary information and the completed Account Transfer Form are ready, initiate the transfer with your new brokerage. Submit the signed form through their online portal, mail, or in person, depending on accepted methods. Review the form carefully for accuracy before submission, as minor errors can lead to delays.

After receiving your transfer request, your new broker submits it to your old brokerage. This is usually done electronically through the ACATS system, facilitating communication between firms. The new broker acts as the primary point of contact and manages the request.

Monitoring your transfer’s progress is advisable. Most new brokerages provide an online tracking tool or status updates within your account dashboard. If issues arise or the transfer takes longer than expected, maintain communication with your new brokerage’s customer service team. They can provide updates and help resolve roadblocks.

ACATS transfers typically complete within 3 to 10 business days, though some may take longer. During this period, assets may be temporarily unavailable for trading. If the old firm does not act on the request or a problem is not resolved within two business days, the request may be purged from ACATS, requiring a new submission.

Post-Transfer Reconciliation

After the transfer is complete, verify that all securities and cash balances have arrived in your new brokerage account. Compare holdings in your new account with your final statement from the old brokerage to ensure accuracy. Report any discrepancies to your new firm immediately for investigation.

Confirming accurate cost basis transfer for all transferred assets is crucial. While securities typically transfer quickly, cost basis data might take a few additional days. This information is essential for accurate tax reporting, as the IRS requires brokerages to report it. Without correct cost basis, calculating capital gains or losses can be challenging.

Small residual items, such as fractional shares or cash balances, may remain in the old account after a full transfer. Fractional shares are often liquidated and transferred as cash, while small cash amounts may be sent via check or electronic transfer. Inquire with your old brokerage about remaining balances and their disbursement.

If you performed a full account transfer, consider formally closing your old account once everything has moved. Some brokerages may charge an account closing fee. Contact your old firm directly to confirm final steps or fees associated with closing the account.