Transferring Brokerage Accounts

[berkshire101]

Has anyone has experience with transferring brokerage accounts?  I'm thinking about switching from Schwab to Interactive Brokers, mainly because the cost is much less.  Thanks!

[Travis Wiedower]

What specifically are you wanting to know? I've switched brokers twice in the past ~5 years (now I'm on IB and staying put). It is a hassle (switching costs!) but worth it in the end.

[racemize]

Do you have to close out margin when you switch accounts?

[100 Shares]

I switched from Fidelity to Merrill Edge within the last year. I found that if I transferred in the shares from Merrill rather than sending them out through Fidelity, I could do it for free. I also left some stocks in Fidelity to avoid closing the account and paying that fee. So in the  end I ended up paying no switching costs.

[berkshire101]

I don't have margin on my account.  It's a joint account.  I want to know if I have to liquidate my holdings in order to transfer brokerages.  And how long is the process and how much does it cost?  Thanks.

[AzCactus]

I think you should be able to do a transfer in kind.  However, I am not an expert in this. 

[benhacker]

berkshire101,

 

I don't have margin on my account.  It's a joint account.  I want to know if I have to liquidate my holdings in order to transfer brokerages.  And how long is the process and how much does it cost?  Thanks.

 

It's quite simple.  You usually just want to do an automated customer account transfer service (I think that's the acronym?) aka ACATS transfer.  It takes maybe 7-10 days.  As mentioned above, if you close out completely, Fido will charge you maybe $25-50 (I can't remember).  All positions will be transfered in kind, and the basis (if properly reported / known at Fidelity) will be transferred accurately to IB within maybe 1-2 months (usually works well).

 

Note, if you have some mutual funds at Fidelity, IB will need you to liquidate those if they aren't in their list of funds they can hold... but other securities should be just fine to move.

 

It's really quite easy and seamless in my experience (I fund most new accounts for my clients this way and that is where I am speaking from).

 

Also, even if you had a margin account, it's simple to transfer over, you just need to let IB know you have a loan at the other broker I believe. 

 

Two small notes:

1) If you have $0 cash at Fidelity when you transfer, the account closing fee will be considered "margin" and thus you can't transfer, so just a heads up to have net-cash after the closing fee.

2) On joint accounts, make sure you speak with IB support and title your new IB account *exactly* how they want given your Fidelity account... middle initials and other somewhat minor titling things matter to IB.

3) Also note to understand IB's joint account withdrawal rules... generally (I think it's still like this) they say that you can deposit from a bank titled under your name, or wifes name, but they will only let you withdrawal into a jointly titled account.

 

Hope that helps, glad to see IB getting more business! :)

[berkshire101]

berkshire101,

 

I don't have margin on my account.  It's a joint account.  I want to know if I have to liquidate my holdings in order to transfer brokerages.  And how long is the process and how much does it cost?  Thanks.

 

It's quite simple.  You usually just want to do an automated customer account transfer service (I think that's the acronym?) aka ACATS transfer.  It takes maybe 7-10 days.  As mentioned above, if you close out completely, Fido will charge you maybe $25-50 (I can't remember).  All positions will be transfered in kind, and the basis (if properly reported / known at Fidelity) will be transferred accurately to IB within maybe 1-2 months (usually works well).

 

Note, if you have some mutual funds at Fidelity, IB will need you to liquidate those if they aren't in their list of funds they can hold... but other securities should be just fine to move.

 

It's really quite easy and seamless in my experience (I fund most new accounts for my clients this way and that is where I am speaking from).

 

Also, even if you had a margin account, it's simple to transfer over, you just need to let IB know you have a loan at the other broker I believe. 

 

Two small notes:

1) If you have $0 cash at Fidelity when you transfer, the account closing fee will be considered "margin" and thus you can't transfer, so just a heads up to have net-cash after the closing fee.

2) On joint accounts, make sure you speak with IB support and title your new IB account *exactly* how they want given your Fidelity account... middle initials and other somewhat minor titling things matter to IB.

3) Also note to understand IB's joint account withdrawal rules... generally (I think it's still like this) they say that you can deposit from a bank titled under your name, or wifes name, but they will only let you withdrawal into a jointly titled account.

 

Hope that helps, glad to see IB getting more business! :)

 

Thank you very much!  That was really helpful!  I'll give IB a call and hopefully they can help me with the transfer.  Thanks again!  :)

[matjone]

I have a funny story.  I used Etrade for a bit and transferred some assets out of there several years ago.  Somehow a dividend payment got lost in the shuffle and I ended up with a 60 dollar balance which I was not aware of.  They continued sending statements for a few years but I just assumed it was promotional stuff and never read it.  One day I happened to open it it and I requested that they transfer the remaining balance, but they said they were going to charge some outrageous fee, 50 bucks I think, despite the fact that I already paid the transfer fee the first time.  Also I was not allowed to trade with the money.  I decided to screw them in return and elected paper delivery on everything.  That was a few years ago and they've sent me a statement each month showing my $60 cash balance.  I made another attempt a few months ago and this time the story had changed - they are now saying that due to inactivity they can't do anything with the account and I need to open a new one to get the money.  I actually considered doing it and electing paper delivery on everything, and keeping a token amount in there so I could buy stocks subject to corporate actions, class action suits, etc. which requires a lot of mailing.

[vinod1]

berkshire101,

 

I don't have margin on my account.  It's a joint account.  I want to know if I have to liquidate my holdings in order to transfer brokerages.  And how long is the process and how much does it cost?  Thanks.

 

It's quite simple.  You usually just want to do an automated customer account transfer service (I think that's the acronym?) aka ACATS transfer.  It takes maybe 7-10 days.  As mentioned above, if you close out completely, Fido will charge you maybe $25-50 (I can't remember).  All positions will be transfered in kind, and the basis (if properly reported / known at Fidelity) will be transferred accurately to IB within maybe 1-2 months (usually works well).

 

Note, if you have some mutual funds at Fidelity, IB will need you to liquidate those if they aren't in their list of funds they can hold... but other securities should be just fine to move.

 

It's really quite easy and seamless in my experience (I fund most new accounts for my clients this way and that is where I am speaking from).

 

Also, even if you had a margin account, it's simple to transfer over, you just need to let IB know you have a loan at the other broker I believe. 

 

Two small notes:

1) If you have $0 cash at Fidelity when you transfer, the account closing fee will be considered "margin" and thus you can't transfer, so just a heads up to have net-cash after the closing fee.

2) On joint accounts, make sure you speak with IB support and title your new IB account *exactly* how they want given your Fidelity account... middle initials and other somewhat minor titling things matter to IB.

3) Also note to understand IB's joint account withdrawal rules... generally (I think it's still like this) they say that you can deposit from a bank titled under your name, or wifes name, but they will only let you withdrawal into a jointly titled account.

 

Hope that helps, glad to see IB getting more business! :)

 

Thank you very much!  That was really helpful!  I'll give IB a call and hopefully they can help me with the transfer.  Thanks again!  :)

 

berkshire101,

 

I transferred to IB from Vanguard Brokerage Account a long while back and the only issue I had is that the cost basis did not transfer correctly. But you would be able to correct this manually yourself. So just make sure you have accurate cost basis information in case you need it.

 

Vinod