Can You Move Stocks From One Broker to Another Without Selling?

Transferring investments between brokerage firms can be complex, but an “in-kind” stock transfer allows individuals to move their holdings without selling and repurchasing assets. This approach directly shifts existing investments, such as stocks, bonds, and mutual funds, from one account to another. In-kind transfers help investors avoid potential capital gains taxes that could be triggered by selling appreciated assets. They also bypass transaction costs associated with liquidating and re-establishing positions. Investors often consider such transfers when seeking better fee structures, a wider range of investment options, or when consolidating multiple accounts for simplified management.

Understanding In-Kind Stock Transfers

An in-kind stock transfer facilitates the direct movement of securities from one brokerage account to another, preserving the original investments as they are. This means that instead of converting assets into cash, the actual shares or fund units are transferred. The Automated Customer Account Transfer Service (ACATS) is the standardized system that streamlines most of these transfers between brokerage firms. This automated process enhances efficiency and reduces potential for human error.

The ACATS system involves two main parties: the “delivering firm,” which is the brokerage currently holding the assets, and the “receiving firm,” the new brokerage where the assets are being moved. The receiving firm typically initiates the transfer request through ACATS, communicating directly with the delivering firm. This service can handle various asset types, including equities, corporate and municipal bonds, unit investment trusts, mutual funds, options, and cash.

Gathering Information and Preparing for Transfer

Initiating a stock transfer requires meticulous preparation and accurate information. Gather specific details from both your existing and new brokerage accounts. This includes the exact account type, such as a taxable brokerage, individual retirement account (IRA), or Roth IRA, for both the delivering and receiving firms. The full account numbers for each account are also necessary.

Verify that the account registration details, such as individual, joint, or trust ownership, match precisely between the two brokerages. Any discrepancies in names or account types can cause significant delays or rejection of the transfer. You will also need a complete list of all holdings intended for transfer, including accurate ticker symbols and the exact number of shares or units. The transfer initiation form is typically provided by the receiving broker, and it must be filled out carefully using the gathered information. In specific situations, a Medallion Signature Guarantee may be required to authenticate signatures and legal authority. This guarantee, often obtained from a bank or credit union, is a security measure to prevent unauthorized transfers.

Initiating and Monitoring Your Stock Transfer

Once all necessary information is gathered and the transfer form completed, initiate the transfer request. This request is typically submitted through the receiving brokerage firm. The receiving firm then communicates with the delivering firm via the Automated Customer Account Transfer Service (ACATS) to facilitate the movement of your assets.

Most ACATS transfers generally complete within five to seven business days from the time the receiving firm submits the request. However, some transfers might take up to ten business days, especially if manual processing is required or if issues arise. During the transfer period, your account may be temporarily “frozen,” meaning you might be unable to trade the securities being moved. Many brokerages offer online portals or dedicated transfer departments that allow you to monitor the progress of your transfer. Should any complications occur, such as partial transfers or unexpected delays, contacting the receiving broker is the first step to resolve the issue.

Assets and Accounts Not Eligible for In-Kind Transfer

While in-kind transfers offer flexibility, certain assets and account types cannot be moved using this method. Proprietary mutual funds or other investments that are exclusive to the delivering brokerage firm often cannot be transferred to a new broker if the receiving firm does not offer them. In such cases, these assets typically need to be liquidated, and the cash proceeds are then transferred.

Similarly, illiquid assets or alternative investments, such as limited partnerships or unlisted securities, are generally not eligible for in-kind transfer due to their unique nature and lack of broad market availability. Certain account types also fall outside the scope of standard in-kind transfers. For instance, 529 plans and annuities usually require specific direct rollover or trustee-to-trustee transfer processes rather than a direct in-kind stock transfer. Employer-sponsored retirement plans like 401(k)s also follow different transfer protocols, often involving direct rollovers to an IRA or another employer plan. After a full asset transfer, small residual cash balances may occasionally remain in the old account, which are typically swept to the new account or disbursed to the client.