What’s the best way to transfer stocks, bonds and mutual funds from one broker to another? Let the new broker handle the transfer of your assets. That broker will ask you to fill out and return a form with basic information, including how each account that you are transferring is owned—individually, jointly or as an IRA. You also will need to send a copy of the most recent statement from your old account. The process generally takes six to 10 working days. But you need to be careful about several details…
The new account should be set up as a mirror image of the old one. If the old one is a joint account, the new one must be joint as well. If you used your middle initial in the old account, use it in the new one. If the old account is an IRA, so must the new one be, and it must be the same kind of IRA. Discrepancies could require additional documents and slow down the transfer process. Any changes you want to make can be made after the new account is open.
Make sure there are no “open positions” in your old account. If you have any open orders to buy or sell assets, cancel them or wait until they are completed before you begin the transfer. If you want to buy or sell before the transfer is likely to be complete, do it before you begin the process. You won’t have access until the transfer is complete.
Make sure your new broker can handle all of your old assets. Not all brokers handle all mutual funds, for instance. If your new broker doesn’t deal in one of your old mutual funds, you’ll have to sell it before you initiate the transfer of accounts.
Request a “full cost-basis history” for the old account from inception to date of termination if this is not available on the old firm’s Web site.
Keep tabs on dividends for at least six months. Any dividends or interest payments should be sent to your new account.
Your old broker may charge a closing fee. Your new broker probably will reimburse you if you ask before the transfer is made. If you are transferring an IRA account, the old custodian often will assess the annual IRA custodial fee, if applicable, at the time the account is being prepared for transfer.
If you need to take a distribution or write a check, do so several days prior to transferring your account so that there is time for the transaction to be completed.
Source: Sheryl Garrett, CFP, founder of Garrett Planning Network, Shawnee Mission, Kansas, an international network of fee-only financial advisers. She is author of Personal Finance Workbook for Dummies (Wiley). www.GarrettPlanningNetwork.com