How to Change Brokerage Firms

by Shelley Frost

Changing brokerage firms is typically a straightforward process, but errors can cause delays that keep your account inaccessible for several days. Before you initiate the transfer, gather all of your account information and learn about the process so you understand what to expect. An electronic transfer through the Automated Customer Account Transfer Service, known as the ACATS system, is typically completed in no more than six business days. Manual transfers for accounts not compatible with ACATS often take longer.

Review your current account and the type of assets you have to determine if they are eligible for transfer. Certain securities, such as those only sold by your existing firm, funds that your new firm doesn't have, annuities or bankrupt securities may not qualify.

Talk to both the new and old brokerage firms to determine if they charge a fee for the transfer. Discuss any securities that might not qualify for transfer, so you are clear on how the change will happen. Determine if the account will be frozen during the transfer, so you are aware of whether or not you will be able to trade during this time.

Call the new brokerage firm to determine the exact form or forms you need to complete based on the type of accounts you are transferring. The forms may vary from one firm to another so checking first is necessary to avoid delays.

Fill out all information on the transfer forms completely and accurately. Review every piece of information you write on the form to identify any mistakes or omitted information. Accuracy is key to a smooth, quick transfer. Photocopy all forms to keep a record for yourself.

Submit the transfer forms to the new brokerage firm. Verify that the forms were received and directed to the appropriate personnel. Contact your old brokerage firm to verify that they received the request via the new firm.

Keep in contact with both firms through the process to ensure the paperwork is processed properly. If any of your accounts are unable to be transferred through ACATS, work with your old firm to determine if you want to liquidate them or keep them with the old firm. Liquidating requires a manual transfer to the new firm, which typically takes longer than the electronic transfer.

Monitor your account with the new brokerage to ensure all assets and securities were transferred properly. Contact the firm if you feel there was an error or if the transfer is somehow delayed.

Tip

  • The U.S. Securities and Exchange Commission advises that you contact the New York Stock Exchange or the Financial Industry Regulatory Authority (FINRA), if you think the transfer is taking too long.

Warning

  • The transfer may require a Medallion Signature Guarantee. This stamp can usually be obtained at financial institutions, like some commercial banks or credit unions. Without this seal, the forms may be returned, delaying your transfer.

About the Author

{{}}

Photo Credits

  • Making a financial plan image by Allen Stoner from Fotolia.com