How to Make Transitioning Your Brokerage Account Easy

Learn how to make transferring your brokerage accounts as easy as possible.

Many investors seek to limit the cost of executing stock trades from their brokerage accounts. This leads them to explore companies that may offer more research information for less money per trade. However, moving from one brokerage account to another is not the quickest process, but there are some tactics you can employ tol make the transition easier.

Things You'll Need

• Brokerage account

Instructions

1. Make sure that all of the information on the transfer form is correct. A transfer form will likely ask you for your name, date of birth, Social Security Number, brokerage names and associated account numbers, among other things. Before submitting the form, make sure that all of the information is indeed right.

2. Keep the same type of account as you move from one brokerage to another. This means if you are moving a joint account, keep the account joint until after the transition process is complete.

3. Ask if your brokerage firms are part of the Automated Customer Account Transfer Service (ACATS). In 1999, many brokerages joined this service to complete transfers in a quicker time frame. If both brokerages are part of this service, then the time frame should be six business days. During the six business days, the old firm and new firm compare your transferable assets to make sure they are all correct.

4. Close securities that your new brokerage does not offer. If an asset is not transferable, it will hold up the transfer process. Examples of non-transferable assets are mutual funds sold by one brokerage firm but not the other, or securities that have gone bankrupt but are still remaining in your account.

5. Check the margin requirements at the new firm. If you trade on margin, you want to make sure that the new firm does not require you to have a higher threshold of cash meet the margin maintenance requirements.

Tips & Warnings

• Retirement accounts may take a few more days to transfer because in accordance with federal law, someone must become the custodian of the retirement account during the transition process. This will be handled by the brokerage firms; however, the injection of a third party can slow things down.

References

• SEC: Transferring Your Brokerage Account
• Understanding the Brokerage Account Transfer Process
• Stock Market Investors: How to Transfer Your Brokerage Account Smoothly