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With all the excellent online stock brokers available, sometimes one of the smartest financial moves is to transfer a brokerage account. You could save money by switching to a broker with lower fees, and your new broker may give you more investment options as well.
If you haven't done this before, you might wonder what's the best way to move your investments from your old broker to the new one. To help you get your new brokerage account set up without a hitch, we're going to cover the process to transfer a brokerage account.
To transfer a brokerage account, you'll need a brokerage account with your new broker (the one that will receive the transfer). Once you've set that up, here's what to do:
Enter your account information with your old broker on the transfer form.
After you submit the form, the transfer process is mostly a hands-off affair. The action happens behind the scenes, as your new broker communicates with your old broker to get your investments moved over.
It usually takes six business days to transfer a brokerage account. Your old broker validates the information within three business days and transfers the assets within another three business days. It can take longer, though, particularly if there are any discrepancies during the validation process.
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Many brokers charge a fee when you transfer brokerage account assets. The typical fee ranges from about $50 to $100, but not every broker has an account transfer fee. The only way to know how much your old broker charges is to check its list of fees or contact customer service.
You may avoid this fee though, because your new broker may cover it. Brokers often do this as an incentive to attract new clients. If your old broker has a transfer fee, ask your new broker about footing the bill.
Even if your new broker doesn't offer this, it could still be worth the money to transfer a brokerage account. The potential benefits of switching brokers -- such as free trades or new account bonuses -- often far outweigh a one-time transfer fee.
There are a few things you should do to prepare and protect yourself before you transfer an account:
Investors don't change brokerages very often, but there are situations when it's for the best. Here are the most common reasons to consider moving to a new brokerage firm:
When you've found a new broker and set up an account, transferring your assets is simple enough. You just fill out the form to transfer the brokerage account. The brokers handle the rest. They'll let you know if there are any issues that need your attention, but in most cases, transfers are routine, and happen quickly.
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