How to Transfer Your Brokerage Account

Understanding ACATS: The Transfer System

ACATS (Automated Customer Account Transfer Service) is the electronic system that moves securities between brokers. It's operated by the NSCC (National Securities Clearing Corporation) and has been the standard transfer method since 1985. Nearly every US broker participates in ACATS, making transfers straightforward regardless of which brokers you're moving between.

The beauty of ACATS is that your investments transfer "in-kind"—meaning your actual shares move from one broker to another. You don't need to sell anything, which means no taxable events, no market timing concerns, and no being out of the market during the transfer. Your 100 shares of Apple at Broker A become 100 shares of Apple at Broker B, with your original cost basis intact.

FINRA Rule 11870 requires brokers to complete ACATS transfers within specific timeframes. For full account transfers, brokers must complete the transfer within six business days of receiving a valid transfer instruction. Partial transfers may take slightly longer because they require more manual processing.

Full Transfer vs. Partial Transfer

Full Account Transfer

A full transfer moves everything—all securities, cash, and the account itself—from your old broker to your new one. This is the cleanest option and usually the fastest. Once complete, your old account is typically closed automatically.

Full transfers are best when you're completely leaving your old broker and have no reason to maintain the relationship. They're also simpler from an administrative perspective because there's no ambiguity about what's moving.

One consideration: some brokers charge an account transfer fee (typically $50-$100) for outgoing transfers. This fee is usually charged regardless of whether it's a full or partial transfer, so if you're paying a fee anyway, you might as well do a full transfer.

Partial Account Transfer

A partial transfer moves only specific assets you designate, leaving the rest (and the account) at your old broker. This takes longer because it requires manual specification of which assets to move and manual processing on both ends.

Partial transfers make sense when you want to keep some assets at your old broker (perhaps they have better tools for certain strategies), when you hold proprietary products that can't transfer (like some mutual funds), or when you want to maintain the old account for some reason.

The downside is complexity. You'll have multiple brokerage relationships to manage, potentially multiple sets of tax documents, and a less consolidated view of your finances.

What Can and Cannot Transfer

Assets That Transfer Easily

Most standard investments transfer without issues through ACATS:

• Stocks: All publicly traded US stocks transfer seamlessly
• ETFs: Exchange-traded funds transfer like stocks
• Bonds: Treasury, corporate, and municipal bonds transfer
• Mutual funds: Most mutual funds transfer, though some exceptions exist
• Options: Standard listed options transfer, though you'll need options approval at your new broker
• Cash: Cash balances transfer as part of the account

Assets That May Not Transfer

Some assets are broker-specific or have restrictions that prevent ACATS transfer:

• Proprietary mutual funds: Fidelity funds may not transfer to Schwab, and vice versa. You'll need to sell these before transferring or leave them behind.
• Fractional shares: Most brokers don't accept incoming fractional shares. They'll typically be liquidated (sold) during the transfer process, with cash proceeds transferred instead.
• Cryptocurrency: Crypto held at brokers often cannot transfer via ACATS. You may need to sell and rebuy, or transfer through blockchain (if the broker supports withdrawals).
• Certain alternative investments: Limited partnerships, private placements, and other alternative investments may not be ACATS-eligible.
• Penny stocks on OTC markets: Some very small stocks may have transfer restrictions.
• Margin loans: If you have a margin balance (borrowed money), you'll need to pay it off before transferring, or the new broker needs to agree to assume the margin debt.

The Fractional Shares Problem

Fractional shares deserve special attention because they're increasingly common. If you've been dollar-cost averaging or reinvesting dividends, you likely have fractional positions. Here's what happens:

Whole shares transfer normally. The fractional portion (say, the 0.47 shares of your 15.47-share position) typically gets sold at your old broker. The cash proceeds then transfer to your new broker. This creates a small taxable event—you'll realize a gain or loss on those fractional shares.

Some brokers handle this better than others. A few newer brokers that specialize in fractional shares may be able to transfer fractional positions between each other, but this is the exception, not the rule. Check with both brokers before transferring if fractional shares are a significant part of your portfolio.

Step-by-Step Transfer Process

Step 1: Open Your New Account First

Before initiating any transfer, open and fully set up your account at the new broker. Complete all verification steps, link your bank account, and ensure the account is ready to receive assets. If you're transferring an IRA, make sure you open the same type of IRA (Traditional, Roth, etc.) at the new broker.

Also verify that the new broker can hold everything you plan to transfer. If you trade options, apply for options approval. If you use margin, apply for margin. Getting this set up before the transfer prevents delays.

Step 2: Gather Information From Your Old Account

You'll need the following information from your current broker:

• Account number
• Account title (exactly as it appears)
• Broker's DTC number (your new broker usually knows this)
• Recent statement (some brokers require this)

Take a screenshot or download a PDF of your current holdings. This gives you a record to verify that everything transferred correctly.

Step 3: Review Your Holdings for Transfer Issues

Before initiating the transfer, review your portfolio for potential problems:

• Do you hold proprietary mutual funds that can't transfer?
• Do you have significant fractional share positions?
• Is there a pending dividend or corporate action?
• Do you have open option positions that need to be closed?
• Is there a margin balance to pay off?

Address these issues before initiating the transfer to avoid delays or complications.

Step 4: Initiate Transfer at Your NEW Broker

This is important: you initiate the transfer from your NEW broker, not your old one. The receiving broker "pulls" the assets from your old broker using ACATS.

Log into your new broker and look for options like "Transfer Assets," "Move Accounts," or "ACATS Transfer." You'll need to provide:

• Your old broker's name
• Your old account number
• Whether you want a full or partial transfer
• For partial transfers: specific assets to move

Some brokers have you complete the Transfer Initiation Form (TIF) online; others may require you to download, sign, and upload a PDF. Electronic submission is faster.

Step 5: Wait (But Monitor)

Once initiated, the transfer typically takes 5-7 business days, sometimes up to two weeks. During this time:

• Don't trade: Avoid making trades in your old account during the transfer. This can cause complications and delays.
• Don't add money: Don't deposit new funds to your old account.
• Monitor both accounts: Check both accounts periodically to track progress.
• Watch for communications: Either broker may contact you if there's an issue.

Step 6: Verify the Transfer

Once complete, carefully verify that everything transferred correctly:

• Compare your new holdings to your pre-transfer screenshot
• Check that share counts are correct (accounting for fractional share liquidation)
• Verify cost basis transferred correctly (critical for taxes)
• Confirm cash balance is correct

Cost basis is particularly important. If cost basis doesn't transfer correctly, you could end up overpaying taxes when you eventually sell. If something looks wrong, contact your new broker immediately.

Step 7: Close Your Old Account (If Desired)

For full transfers, your old account may close automatically. For partial transfers, or if the old account stays open with a small residual balance, you may need to close it manually. Contact your old broker to confirm the account is closed and request written confirmation.

Transfer Fees and How to Avoid Them

Many brokers charge an outgoing transfer fee, typically $50-$100. This fee is charged by your OLD broker for processing the transfer. Here's what to know:

Common Transfer Fees

• E*TRADE: $75 full, $25 partial
• Robinhood: $100
• Webull: $75
• TD Ameritrade/Schwab: $75
• Fidelity: $0 (no fee)
• Vanguard: $0 for most accounts

Getting Your Fee Reimbursed

Here's the secret: many brokers will reimburse your transfer fee, especially for larger accounts. Fidelity, Schwab, and others routinely cover transfer fees for accounts over $25,000-$50,000. Some cover it for any account if you ask.

Contact your new broker's customer service after the transfer completes and ask about transfer fee reimbursement. Have your old broker's statement showing the fee ready. Many brokers process this as an account credit within a few weeks.

Common Transfer Problems and Solutions

Problem: Transfer Rejected

Transfers can be rejected for several reasons: account title mismatch (name spelled differently), signature issues, account type mismatch, or assets that can't transfer. Check the rejection reason, correct the issue, and resubmit.

Problem: Cost Basis Missing or Wrong

Cost basis doesn't always transfer correctly, especially for older positions or those acquired through complicated transactions (mergers, spin-offs, etc.). If cost basis is missing, gather your records (purchase confirmations, old statements) and provide them to your new broker to update.

Problem: Transfer Taking Too Long

If it's been more than two weeks, contact your new broker to check status. Common delays include: pending corporate actions, margin issues, restricted securities, or simply backlog at either broker. Your new broker can often expedite by contacting the old broker directly.

Problem: Residual Cash Left Behind

Sometimes a small amount of cash (from dividends, interest, or fractional share sales) arrives after the transfer completes. This usually transfers in a "residual sweep" within a few weeks. If not, you can request your old broker send you a check.

Tax Implications of Transferring

Good news: transferring via ACATS is generally NOT a taxable event. Your shares move in-kind, maintaining their original cost basis and holding period. You don't realize gains or losses simply by changing brokers.

Exceptions that DO create taxable events:

• Fractional share liquidation: When fractional shares are sold, you realize a gain or loss
• Proprietary fund liquidation: If you sell funds that can't transfer, you realize gains/losses
• Margin interest: If your old broker charges interest through the transfer date, that may be deductible

For tax reporting purposes, ensure your cost basis transfers correctly. Incorrect cost basis can cause you to over-report or under-report gains when you eventually sell.

Transfer Bonuses: Free Money for Switching

Many brokers offer bonuses for transferring assets. These can add significant value to your switch:

• E*TRADE: Up to $10,000 bonus for large transfers
• Tastytrade: Up to $5,000 bonus
• Public: 1% bonus on transferred assets (uncapped)
• Robinhood: 1% match + transfer fee reimbursement
• Webull: Various promotions depending on timing

Read bonus terms carefully. Most require keeping assets at the new broker for a minimum period (typically 6-12 months) or you forfeit the bonus. Some have tiered structures where larger transfers earn larger bonuses.

The Bottom Line

Transferring your brokerage account is straightforward when you understand the process. The ACATS system handles most of the work automatically, moving your investments in-kind without triggering taxes or requiring you to time the market.

Key takeaways:

• Open your new account and initiate the transfer FROM the new broker
• Review holdings for transfer issues (fractional shares, proprietary funds) before starting
• Expect 5-7 business days for completion
• Verify everything transferred correctly, especially cost basis
• Ask your new broker to reimburse any transfer fees
• Look for transfer bonuses—free money is available

Don't let the transfer process keep you at a broker that doesn't serve you well. The hassle is minimal, typically a few minutes of paperwork followed by a week of waiting. The benefits of finding the right broker—better tools, lower fees, superior service—last for years.