How to Change Brokerage Accounts and Transfer Investments

Changing investment brokerage accounts is common, driven by factors such as seeking lower fees, improved customer service, or access to a wider array of investment products. While the prospect of moving investments might seem complex, the process is generally manageable and efficient.

Preparing for Your Brokerage Transfer

Before initiating any transfer, careful preparation can streamline the process. Begin by understanding your account types, such as taxable brokerage accounts, IRAs, Roth IRAs, or joint accounts. The account type influences transfer mechanics and tax considerations. For instance, an IRA transfer must typically go to another IRA of the same type to maintain its tax-deferred status.

Gather specific information from your current brokerage: account numbers, recent statements, and a list of all assets. Ensuring account registration details, like your name and Social Security number, exactly match at both firms is crucial to avoid delays. Many firms require a copy of your most recent statement to validate the transfer.

Choose between a full or partial transfer. A full transfer moves all assets and often closes the old account, while a partial transfer moves only specific assets. Consider your long-term investment strategy and whether you intend to maintain a relationship with your existing firm. This decision impacts the forms and eligible assets.

Understand the distinction between Automated Customer Account Transfer Service (ACATS) and non-ACATS assets. ACATS is an electronic system for transferring most publicly traded securities, including stocks, bonds, ETFs, mutual funds, options, annuities, and cash. These assets are typically held electronically.

Non-ACATS assets cannot be transferred through the automated system. This category includes alternative investments, private placements, physical stock certificates, certain limited partnerships, or proprietary funds not offered by the receiving firm. For these assets, a manual transfer or liquidation may be necessary, and identifying them beforehand helps manage expectations.

Contact your current brokerage about potential outgoing transfer or account closing fees. Many firms charge $50 to $100 for processing an outgoing transfer. Some receiving brokerages may reimburse these fees as an incentive, so inquire about this with your new firm.

Beginning the Transfer Process

Once preparatory steps are complete, initiate the transfer with the new brokerage firm. Start the process through their online portal, customer service, or by completing a transfer initiation form (TIF). The new firm acts as the receiving party and facilitates the request with your current brokerage.

Accurately complete the transfer form using details gathered during preparation. Include account numbers, exact account registration, and your decision for a full or partial transfer. Discrepancies, such as a mismatched name or Social Security number, can lead to delays or rejection. Attaching a recent statement from your old account often helps ensure accuracy.

For ACATS-eligible assets, the new brokerage electronically submits the transfer request to your old firm. The ACATS system assigns a control number and notifies both firms, placing the transfer into “request” status. Your current brokerage has three business days to respond by validating assets or rejecting the transfer if issues exist.

After the delivering firm validates assets, both firms have a review period, usually one to two business days, to confirm the asset list. If the delivering firm needs to make adjustments, an additional business day may be granted for review. This standardized process minimizes errors and expedites security movement.

The process for non-ACATS assets is more manual and varies by asset type. This may involve specific forms for direct registration with a transfer agent, physical delivery of certificates, or liquidating the asset into cash before transferring. Physical stock certificates typically require a Medallion Signature Guarantee to authenticate your signature and prevent fraud.

A Medallion Signature Guarantee is a specialized stamp from a financial institution that verifies your identity and authority to transfer securities. It is generally required for physical certificates and can be obtained from banks, credit unions, or brokerage firms that are members of a recognized Medallion program (e.g., STAMP, SEMP, or MSP). Most institutions require you to be an established customer to provide this service.

After Your Transfer is Initiated

Once the transfer is initiated, monitor its progress for smooth completion. Most new brokerage firms provide online tools or dashboards to track your transfer status. You may also receive email updates as the process moves through stages, such as when the request is acknowledged or assets are received.

Transfer timelines vary by method. ACATS transfers usually complete within three to six business days after initiation, though some sources indicate up to two weeks for all assets to settle. Non-ACATS transfers, being manual, can take significantly longer, often 30 to 60 days. During this period, trading in the transferring account might be restricted or “frozen.”

Common issues include rejected transfers due to mismatched information or un-transferable assets. If an asset cannot be transferred, your old firm is required to inform you and offer options, such as selling the asset and transferring cash proceeds, or leaving it in the old account. Fractional shares cannot be directly transferred and are usually liquidated, with the cash value sent to your new account as “cash in lieu.” This payment is generally considered a capital gain or loss for tax purposes.

Upon transfer completion, verify the accuracy of transferred assets by comparing your new account statement with your last statement from the old firm. Confirm all expected positions and cash balances have been correctly moved and that cost basis information has been accurately transferred. While cost basis typically transfers with assets, keep records of your purchase history for tax reporting.

Ensure any residual cash balances, such as dividends or interest payments received after the initial transfer, are moved to your new account. Your old firm is obligated to forward these funds for a period, often up to six months. If a full transfer was performed, formally close the old account after confirming all assets have successfully moved. Some firms may process a final fee for account closure or transfer at this stage.