Items you will need
- Transfer forms from new brokerage firm
- Current account statement from old firm
People regularly change brokerage firms for a variety of reasons. Although a brokerage account transfer starts and ends with actions taken by the new brokerage firm, the old firm is involved in the process. Ideally, the process should take no more than two weeks, three at the most, but the process can be delayed. Understanding the process of transferring your investment accounts from one brokerage firm to another will help you avoid those unnecessary delays.
Contact the brokerage firm to which you wish to transfer your investment account(s). There is no standard form used to transfer investment accounts; each brokerage firm has its own procedure. For example, one firm may use a single form for all account transfers, while another firm has a different form for each type of account you are transferring. Verifying and requesting the correct forms you need will help ensure a smooth transfer.
Read the form(s) from the new brokerage firm carefully and then fill them out. All the information needed on the new form(s) will be on the most recent account statement from your current brokerage firm. It is important to fill out the form with the information exactly as it is on your statement from the old account. Keeping the account type(s) and the name on the account you wish to transfer the same will help make the transfer easier. If you need to change the account type or ownership, you can expect a delay in the transfer.
Make a copy of every form you fill out for the transfer and then send the originals to the new firm. The copies are not only for your records, but also in the event you must track or monitor the progress of the transfer.
Verify with the new brokerage firm that the transfer forms have been received. If you send the forms to the local branch, the forms might have to be forwarded to the company headquarters, which can delay the transfer.
Most transfers are done electronically, with a specific government-regulated time requirement for completion.
Contact the old firm to verify the transfer has been completed. If the transfer was done electronically, the old firm must complete or reject the transfer within three business days from the time it receives the forms. The firm will compare the information on the form(s) you filled out with the information it has for your account. The old brokerage firm can reject a transfer request only if the transfer form you submitted has been completed incorrectly or a question arises concerning the ownership of the account or the number of shares to be transferred. Confirm that the old brokerage firm will transfer your account.
Because of the time limits imposed by the government for transferring investment accounts from one brokerage firm to another, it is critical that you follow up with both the new and old firms as to the progress of the transfer. Should problems arise that are not resolved within the time limits for the transfer, the transfer process will need to be started again.
There are some accounts, such as margin accounts and IRAs, that may take longer to transfer. This is because each brokerage firm has different rules and requirements for such accounts, and adjustments may be needed. Because of this, your account may be temporarily frozen during the transfer and you will be unable to trade stocks.