Switching Online Brokers: Here's How To Move Your Investments To A New Account Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Advertiser Disclosure

Advertiser Disclosure

We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Our articles, interactive tools, and hypothetical examples contain information to help you conduct research but are not intended to serve as investment advice, and we cannot guarantee that this information is applicable or accurate to your personal circumstances. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional.

How We Make Money

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

Editorial disclosure

All reviews are prepared by our staff. Opinions expressed are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including any rates, terms and fees associated with financial products, presented in the review is accurate as of the date of publication. SHARE: StefaNikolic/Getty Images August 08, 2022 Bob Haegele is a contributing writer for Bankrate. Bob writes about topics related to investing and retirement. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Bankrate logo

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo

The Bankrate promise

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money. Investing disclosure: The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo

Editorial integrity

Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

Key Principles

We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

Editorial Independence

Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Investing is more popular than ever, and there are many high-quality choices available for investors . And with so many brokers vying for a piece of the enormous investment pie, many have slashed fees and offer strong bonuses for new customers. Thanks in part to all of this competition, online brokerages offer investor-friendly benefits. Most offer no commissions, and — as small as one one-hundred-thousandth of a share, in some cases. So, you don’t have to shell out $1,000 or more for a single share. As a result, you may want to consider switching brokers, especially if you have accounts at an older brokerage that still charges high fees. However, simply selling your shares at your current broker and transferring cash to the new one could result in a number of issues. Although the process isn’t always easy, it can be well worth it if you’re paying high fees.

When to consider switching brokers

Switching brokers isn’t a minor decision, especially if you have a large portfolio. But there are many reasons why you may want to switch. Your existing broker may have any number of issues: High fees/commissions. Many brokers today have very low or no commissions. The same is true for monthly fees, inactivity fees, and minimum balances. If your broker is burdening you with any of these, it may be time to look elsewhere. Poor or minimal customer service. If your broker charges no fees whatsoever, it may not offer much in the way of customer service. For some traders and investors, that’s no problem. But if you occasionally or often need help from customer service, it’s important to work with a broker that offers it. Outdated website or a wonky app. User experience on broker websites or mobile apps can vary greatly. Some offer advanced trading tools, an easy-to-use interface, and extensive educational tools. If your broker’s website is arcane and difficult to use or your financial app seems to keep crashing, it might be time for a change. Limited investment options. Not every broker is created equal in terms of investment options. Besides the usual domestic stocks and ETFs, some offer international stocks, low-cost , mutual funds and other more arcane things such as , but not all do. If the investments you want to make are not available with your broker, you may want to shop around. Proprietary funds. Some companies may offer some of their own proprietary mutual funds only to customers of their brokerage. So if you’re looking for a specific fund, it may be available only at a specific brokerage. Alternatively, if you switch brokers, you may not be able to continue buying those funds elsewhere, so it can cut both ways. A for any of the above, which would be an added benefit of switching. Thus, before pulling the trigger, you should do your own research and consult a tax professional where appropriate.

How to transfer brokerage accounts

Switching brokers is not uncommon for any number of reasons, including those mentioned above. If you decide you do want to switch, you have two ways to move your money.

Cash transfer

The most basic way to move your investments from one broker to another is a cash transfer. If you have a brokerage account, this isn’t too difficult. You simply sell all of your securities and then move the cash to the new brokerage. You may not even need help, since you can withdraw the cash. Then you can invest the money how you choose at your new broker. If you have a lot of securities though, this approach can be cumbersome, and selling could . Even relatively modest gains could make it more advisable to go with an in-kind transfer, so that you can avoid the tax consequences.

In-kind transfer

Fortunately, there is a way to transfer your shares without having to sell. In fact, there is a special clearinghouse just for this process called Automated Customer Account Transfer Service (ACATS). These transfers are commonly referred to as in-kind transfers. When your account undergoes an in-kind transfer, it essentially means “as is.” In other words, all of your shares, buy/sell history, and cost basis are transferred to the new broker just as they were at the old one. The easiest way to complete an in-kind transfer is moving an account to a new account of the same type. That means if you have a taxable brokerage account, it should be transferred to another taxable brokerage account. The same applies to a , , and so on. While it is possible to transfer to a new account of a different type, it may delay the process. Plus, you may have to provide additional documentation proving ownership in this situation. It’s also important to have the right paperwork when switching brokers. You will need to fill out a transfer initiation form with the new broker, also called the receiving broker. This will ensure you not only avoid unnecessary fees but also that the process won’t be delayed. When filling out your transfer initiation form, you will need key pieces of information, such as: Name Account number Social Security number Previous broker’s information Whether this is a full or partial transfer Another thing to keep in mind is that while this form is going to the new broker, it should match the information on file with the old one. If you had a name change, for example, you should use the name on file with the old broker. You can always change it later with the new broker, if necessary. If you’d like to complete an in-kind transfer, reach out to your new broker to start the process. Here are the steps involved:

1 Contact your new broker

The new broker will be more than willing to help since they want your money invested with them. Ask about their process and let them know what you are planning to move. Also ask about any they may have. If they offer a bonus, it could be a good time to open an account with them if you don’t already have one.

2 Gather information from your old broker

You will also need your most recent account statement from the old broker, as well as your buy/sell history. The latter is important because it will help you avoid tax issues if any of the information is lost in the transfer. You will also need the cost basis for your existing securities.

3 Wait for the new broker to move your account

Thanks to ACATS, you shouldn’t have to do anything while your account is being moved. The process normally takes three to six business days. Keep in mind that you will not have access to any of the securities being moved while the transfer is in progress.

4 Get acquainted with your new account

If you had opted for a cash transfer, you might still have quite a bit of work to do with your new broker, including purchasing your investments But with an in-kind transfer, you may just have a few basic items to take care of, such as ensuring your bank account is linked and setting up auto-deposit.

Beware of transfer fees

Something that is often overlooked when requesting an in-kind transfer are possible fees. Perhaps you are focused on the negatives of your old broker and how the new broker will be much better. Whatever the reason, many brokers charge a fee if you decide to have your account transferred. Not all do, but there may be a fee of up to about $150 for leaving your old broker. On the other hand, some brokerages offer incentives encouraging people to switch. Although your existing broker may charge a fee to move your account, the incentive the new broker offers can more than make up for that fee. Some brokers offer bonuses of several hundred dollars and may even offer to pay the fees of the old broker if you incur them. Read the fine print carefully on the new broker’s site to see exactly what’s needed to qualify for these promotional incentives.

Tax implications of switching brokers

One of the biggest reasons to let your new broker handle the account move via an in-kind transfer are the tax implications. If you opt for a cash transfer and sell all of your securities, you could trigger capital gains. And if you sell securities you’ve owned for one year or less, you may run into short-term capital gains, than the tax rate for securities owned more than a year. In addition to the risk of selling securities for cash, there are tax implications if you are transferring retirement accounts. These accounts have special rules when transferring, including a custodian requirement. And if you are under the allowed retirement age, ,resulting in taxes and penalties. Plus, if the transfer isn’t completed within 60 days, that, too, could trigger a distribution. As you can see, there are quite a few tax considerations when moving your accounts. Your new broker will be familiar with the process and know how to handle it the right way. Allowing the brokerage to take care of the transfer is usually the best way to avoid costly errors.

Bottom line

There are many reasons you may want to switch to a new broker, including high fees, poor customer service, or a frustrating website or app. Whatever the reason, you can transfer your account via cash transfer or an in-kind transfer. If you work with your new brokerage on an in-kind transfer, the process shouldn’t be too difficult. Just be sure you do your research and have all the information needed to make the switch. Thankfully, your new broker will do most of the heavy lifting once you start the process. And once they do, you’ll be ready to start using your new-and-improved account. SHARE: Bob Haegele is a contributing writer for Bankrate. Bob writes about topics related to investing and retirement. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.

Related Articles