How to Change Brokers and Transfer Your Investments

Investors often move brokerage accounts for lower fees, access to different investment products, enhanced customer service, or to consolidate multiple accounts. While the prospect might seem complex, transferring investments is a routine financial operation that can be managed efficiently for a smooth transition of assets.

Preparing for Your Broker Change

Understanding the available methods for moving assets is important. The Automated Customer Account Transfer Service (ACATS) is the most common electronic system for transferring securities between brokerage firms. ACATS facilitates a direct, in-kind transfer of eligible securities, meaning investments move without being sold. While efficient, ACATS may not support all asset types, such as certain proprietary mutual funds, alternative investments, or physical stock certificates.

For assets not supported by ACATS, a non-ACATS or manual in-kind transfer may be necessary. This process involves more coordination between firms and applies to unique assets like limited partnerships or physical stock certificates, often requiring more time. Alternatively, investors can liquidate holdings, transferring only cash to the new account. This involves selling assets in the old account, transferring proceeds, and repurchasing assets in the new account. This method is suitable if an investor plans to rebalance their portfolio or if in-kind transfer is not feasible.

Review your existing portfolio to identify which assets you intend to transfer. Not all assets held at one brokerage firm may be transferable in-kind to another, especially proprietary mutual funds or annuities exclusive to the originating firm. Understanding these limitations helps inform decisions about liquidating specific holdings.

Gather essential information from your current brokerage account. This includes the full account number, precise account type (e.g., individual, joint, Traditional IRA, Roth IRA, taxable brokerage), and recent account statements. Accurate information is critical and required for the transfer request form with the new brokerage firm.

Inquire about potential fees and minimum balance requirements with both the current and prospective brokerage firms. The outgoing firm may charge a transfer-out fee, commonly $75 to $100 for a full account transfer. The receiving firm might also have transfer-in fees, though many firms waive or reimburse these, especially for larger transfers. The new brokerage firm may also have minimum balance requirements for certain account types or services.

Initiating the Account Transfer

Initiating the transfer begins with opening a new brokerage account with the chosen firm. This involves providing personal identifying information, such as your Social Security number, date of birth, and current address, as financial institutions are required to verify customer identities. During account opening, select the appropriate account type, ensuring it matches the assets you intend to transfer, such as a taxable brokerage account, a Traditional IRA, or a Roth IRA.

After the new account is established, the transfer process is primarily initiated by the new brokerage firm. You will access a transfer request form through the new broker’s online portal or as a downloadable document. This form, often called an Account Transfer Form, authorizes the new firm to request your assets from your previous broker.

When completing the transfer form, accuracy is paramount to avoid delays or rejections. Precisely enter the account number from your old brokerage firm, select the correct account type, and specify whether it is a full or partial transfer. For example, if transferring a Traditional IRA, ensure the new account is also a Traditional IRA to maintain tax-deferred status and avoid potential taxable distributions or penalties. Any discrepancy in names, account numbers, or account types can cause the transfer to be paused or rejected.

Additional supporting documentation may be required to facilitate the transfer. This could include a recent statement from your old account to verify holdings. For larger transfers or specific assets, a signature guarantee might be necessary to prevent fraudulent transfers and confirm signature authenticity. Transfers involving trusts or estates may necessitate additional legal documents such as trust agreements or death certificates.

Once the form is accurately completed and all necessary supporting documents are gathered, submit the request to your new brokerage firm. Many firms offer online submission options, allowing you to upload signed forms and documents securely. Alternatively, you may mail or fax documents, depending on the firm’s procedures.

Monitoring and Completing the Transfer

After submitting the transfer request, monitor its progress to ensure a smooth transition. Most new brokerage firms provide an online portal or section to track the real-time status of your transfer request. This feature indicates the various stages of the transfer process, from initial submission to final asset arrival.

While many transfers proceed without issues, delays or rejections can occur. Common issues include mismatched account registration names, unsupported assets that cannot be transferred in-kind, or outstanding fees or margin calls on the old account. If a problem arises, both the new and old brokerage firms will typically notify you. Resolving these issues often requires direct communication with the customer service departments of both firms to clarify discrepancies or address any outstanding obligations.

Upon notification that the transfer is complete, verify that all expected assets have successfully arrived in your new account. Compare the holdings in your new account with a recent statement from your old account to ensure no assets are missing. Confirming that the cost basis information for your transferred securities is accurately reflected in the new account is important. Accurate cost basis is essential for correct tax reporting when you sell these investments, as it directly impacts capital gains or losses reported on IRS Form 1099-B.

If a full account transfer was performed, formally close the old account. This involves contacting the previous brokerage firm directly to confirm the account balance is zero and request its closure. Confirming closure ensures no lingering fees, such as inactivity fees, or administrative issues remain with the old firm.