How to Transfer the IRA Custodian But Not the Brokerage
An IRA is a retirement account that allows an investor to save toward retirement while deferring the taxes on the earnings (in some cases, the principal is also deferred, as is the case with traditional IRAs). Every IRA must have a custodian named on the account who is responsible for the administration and reporting of the IRA. In many instances, when it comes to brokerage firms, the IRA custodian and the brokerage firm are one in the same. There are some circumstances where you can change the custodian of an IRA without changing brokerage firms.
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Instructions
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Review your IRA account. If the brokerage firm is listed on the account title as the "custodian" of the IRA, you will not be able to change the custodian without changing the brokerage firm. Your options would be to change the underlying investments or request a new account representative to manage the account under the same brokerage firm.
Annuities are contracts with insurance companies and must be designated as a qualified retirement account. Mutual funds can be purchased directly from a mutual fund company with a brokerage firm named as the representative on the account (this is not commonly done anymore). Under these circumstances, the custodian and broker will be different. You will receive statements directly from the custodian as well as the brokerage firm in these instances.
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Speak with an account representative at your brokerage firm. Explain that you want to transfer your IRA into a new investment with a different custodian but want to remain at the brokerage firm.
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Review new investment options that are held under a different custodian as well as any penalties or fees you may have for transferring out of the existing custodial account.
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Fill out and submit all pertinent transfer paperwork. Your account representative should be able to provide you with all of the required forms.
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Tips & Warnings
Review all surrender charges or back-end fees before transferring your IRA. While there is no tax consequence, these fees can affect the amount transferred.
