What Is the Safest Way to Move Your Investments From One Broker to Another

There can be times when investors want to move their investments and stocks from one broker to another. People tend to transfer their brokerage accounts for various reasons such as expensive fees, old brokers leaving the business, costly commissions, and more.

However, there are some people who will move their stocks from one dealer to another platform to get trading benefits. You can check out TradingForexSites to find an ideal broker for your trading requirements.

Is It Possible To Transfer Brokerage Accounts

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Yes, it is possible to move your brokerage accounts. In this section, we have listed the two primary methods that help you with moving your funds from one broker to another one.

1. Cash Transfer

A cash transfer is a fundamental method available for moving your investments from one dealer to another. It is not hard if you possess a brokerage account as you can easily trade your securities and move the funds to the new account.

You might not even require assistance because you can withdraw the money with ease. After that, the funds can then be invested any way you like with your new broker. However, if you retain a large number of securities, this method might be inconvenient. In addition to that, selling them could result in capital gains taxes.

2. In-kind Transfer

To our luck, there is another method to move the investments from one broker to another one for which you would not have to sell the shares. In reality, the Automated Customer Account Transfer Service (ACATS) is a unique clearinghouse dedicated solely to this activity. In-kind transfers are the term used to describe these transactions.

If you have selected an in-kind transfer, your account will remain effective as it is. In short, this method moves your investments, buying and selling history, and cost basis to the new broker in the same way they were in your old account.

Moving an old account to a new account of the same type is the simplest approach to conducting an in-kind transfer. It implies that if you possess a taxable brokerage account, it should be moved to another taxable brokerage account. The same is true for Roth IRAs, traditional IRAs, and other types of accounts.

Transferring to a new account different from your old account is possible, but it may cause the procedure to take longer. In addition to that, you might also be required to present more evidence to prove ownership.

When moving from one broker to another, it is also crucial to have the proper papers. The new dealer or the receiving broker will require you to fill out a transfer initiation application. It will confirm that you forgo excessive taxes and the procedure goes well.

You might require significant information in order to fill out the transfer initiation form, which includes:

• Your name
• Your account number
• Number assigned by the Social Security Administration (Social Security number)
• Information about the old broker
• Whether it is total or partial

Though this form is going to a new dealer, one thing you have to be cautious about is that this form has to match the information on file with the former broker. For instance, if there is a change in your name, you must use the old name displayed on the former broker’s file. However, you can change it with the new dealer later.

The Best And Safest Way To Transfer Your Investments From One Broker To Another One

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The direct transfer method is the most typical approach to move shares between brokers. In order to move investments this way, several brokers employ the Automated Customer Account Transfer Service (ACATS).

An ACATS method works like this:

• Fill out a transfer commencement form with your new dealer to begin the process.
• In order to complete the move, your new dealer talks with the old broker.
• Within three business days, your old dealer must authenticate, reject, or alter the information.
• The transfer will be finalized within six working days when the old broker authorizes the move and if there are no complications.

If you want to attain an in-kind transfer, contact your new broker to begin the procedure. We have the involved steps here:

1. Speak with your new broker

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The new broker will be more than ready to assist you because they want you to invest your funds with them. Inquire about their procedure and inform them of your plans to transfer. Check if there are any possible discounts or promotional bonuses. If you do not possess an account with them, this can be a decent opportunity to do so.

2. Collect data from your previous broker

You might require your current account statement from the previous broker along with your selling and buying records. The latter is crucial since it will aid you in preventing tax complications if any data is lost during the move. Besides that, you should have your current securities’ cost basis.

3. Wait for your account to be transferred to the new dealer

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You would not have to do anything while your account is being transferred because of ACAT. In general, it takes three to six working days to finalize the procedure. You have to remember that you would not be able to get access to the securities when they are being moved to the new broker.

4. Become familiar with your new account

If you have preferred the cash transfer method, you may still have a lot of tasks ahead of you with the new broker. However, with an in-kind transfer, you might only need to worry about a few minor details like linking your bank account and arranging an auto-deposit.

Bottom Line

There are a few different methods to move investments from one broker to another dealer. However, it is better to stick to Automated Customer Account Transfer Service (ACATS), which are generally inferred as in-kind transfers. You can use this direct method and follow the steps we have listed above to complete the transfer of investments.