Can I transfer stocks between brokers?

Sometimes, you may decide that your current brokerage account is not working well for you and that you want to open a new account. The good news is that it is possible and relatively easy to transfer stocks from one broker to another.

Can I transfer stocks from one broker to another?

Yes, it is possible to transfer stocks and other investments from one brokerage account to another.

What is the Automated Customer Account Transfer Service (ACATS)?

Most brokerage account transfers are done through the Automated Customer Account Transfer Service (ACATS). ACATS is designed to facilitate transfers, especially for simple accounts that primarily contain basic assets like stocks, bonds, and cash.

How can I transfer stocks between brokerage accounts?

To transfer your investments to a new broker, follow these steps:

1. Choose a new broker: Before transferring stocks to a new broker, you need to select the broker you want to work with.
2. Submit a transfer initiation form: The transfer initiation form is what starts the entire process. The broker you wish to transfer funds to should provide you with this form. Fill out the form and ensure that all information you provide matches the information your current broker has about you.
3. Wait for the new broker to contact the current broker: Once the form is submitted, the new broker will reach out to the previous broker. The previous broker will verify the request by comparing the information on the form with the information they have on you. If there are any discrepancies, be prepared to work with the brokers to resolve them. This is also the time you may have to pay fees to the new broker if they charge fees for account transfers.
4. Work with the new broker to ensure all your assets are accepted: Once the previous broker accepts the form, the new broker will review all assets in your account to ensure they are ready to accept them. For example, if you have shares in mutual funds managed by the previous broker, there is no guarantee that the new broker will accept them. This can also occur if you have a margin account, as the new broker may have different credit requirements. If you encounter any issues, work with the new broker to resolve them.
5. Wait for the transfer to complete: Once any issues are resolved, all you have to do is wait. The transfer can take about a week to complete.

Special circumstances that can affect the stock transfer process

There are some scenarios that can affect the process. You will want to pay attention to these obstacles, if they apply to you:

• Transferring retirement accounts or other tax-advantaged accounts: Transferring a tax-advantaged account, such as an Individual Retirement Account (IRA), requires more care than a regular transfer. The IRS regulations give you a limited time to complete the transfer. If you fail to return the money to the IRA in time, it may be treated as a distribution and could be subject to taxes and penalties.
• Transferring stocks to someone else: If you are transferring stocks to someone else rather than an account you own, you will want to be mindful of gift taxes. An individual can give a specified amount each year ($16,000 in 2022) to another person without incurring gift taxes.
• Transferring complex securities or accounts: Many people have basic brokerage accounts that contain simple securities like stocks, bonds, and exchange-traded funds (ETFs). It is usually easy to transfer these securities between brokers. If you have a more complex account, such as a margin account where you are currently investing with borrowed funds, or own complex securities like futures or other derivative instruments, the transfer may be more challenging. The new broker must be willing to accept the securities in your account before completing the transfer.
• Transferring

Assets between accounts at the same broker: If you are transferring funds between different accounts within the same brokerage firm, it is much easier than transferring investments between different brokers. This is because your broker will not have to work with another company to facilitate the transfer. If you are opening an investment account for a child or a small relative, it may be a good idea to use the same brokerage firm that you use yourself.

What to watch for when transferring brokerage accounts

Transferring an account usually goes smoothly, but there are some things to watch for:

• If you have a margin account or own exotic securities, ask the new broker in advance whether they have policies regarding accepting those types of accounts in transfers.
• Some derivative instruments involve theoretically unlimited risks, making the transfer process difficult regarding buying or selling such securities. This makes many brokers less willing to accept these high-risk securities in the transfer process, as investors may face significant losses and large debts during the transfer.
• It’s a good idea to ask the new broker questions about the transfer process before you start so you can get an idea of how long the transfer will take and if there is anything you can do to facilitate the process.
• Be sure not to initiate any transactions during the transfer process. Trying to buy or sell stocks in the middle of a transfer is a good way to complicate things. Be prepared to keep your portfolio as it is during the transfer process.

If you find a new brokerage firm that offers higher-quality investment options, better customer service, or lower fees than your current broker, it is possible to open a new account and transfer your shares to it. The process is usually straightforward, but it might take about a week. Understanding how the process works can help ensure that it goes smoothly.

Frequently Asked Questions (FAQs)

How can I transfer stocks to a family member?

If you and a family member have accounts at the same broker, talk to your broker to initiate the transfer process. Most brokers have forms you can fill out to get started. If you and a family member use different brokers, you will want to contact both brokers to find out the best way to complete the transfer.

What fees are charged for transferring stocks from Robinhood?

Fees vary between brokerage firms. For example, Robinhood charges a fee of $75 to conduct a partial or full transfer of your account to another broker. At Vanguard, there are no fees for receiving assets from another broker.

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Source: https://www.thebalancemoney.com/can-i-transfer-stocks-between-brokerages-5219431