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|  |  | Transferring Your Brokerage Account:Tips on Avoiding Delays
Many investors transfer their accounts from one brokerage firm to another without a hitch. Ifyour transfer goes smoothly, count on the whole process taking two tothree weeks. But this time frame may vary depending upon such factorsas the assets involved, the types of accounts, and the institutionsbetween which the transfer occurs.

Transfers may be delayed if:
- the wrong transfer form is used;  
- the transfer form has been incorrectly completed;   
- the transfer involves a request to liquidate some or all of your assets; 
- the transfer includes a margin account; 
- the transfer is from one type of account into a different type of account; 
- a change in the account owner is made; or 
- the transfer involves a retirement account.

This document walks you through the transfer process and provides tips on how to avoid problems.
Use the Right Form
Use the correct form toensure your transfer goes smoothly. Some firms allow you to use oneform for all account transfers while others have different formsdepending on the type of account you are transferring (for example, anIRA account or a margin account). To get the right form, call the newfirm where you want to transfer your account or visit its Web site. 
Review the Form Carefully
As you start filling inthe transfer form, review the account statement from your old firmwhere your account is held. All firms require you to attach a copy ofyour most recent account statement to the transfer form. 

The form usually asks forthe name on your account, the type of account you want to transfer,account number, the firm where the account is held, and your socialsecurity or tax identification number. Be sure you provide thisinformation exactly as it appears on your old account. For instance, ifyour middle name or initial appears on your old account, you may runinto delays if you forget to include it. When transferring only some ofthe securities in your account, carefully list the securities you wantto transfer on the form.

The easiest way totransfer your account is to keep the type of accounts the same (jointaccount transfers to joint account; IRA to IRA) and account owner thesame. You can change account type or ownership at the time of thetransfer, but this may delay the transfer. You may need to providedocuments proving changes to ownership, such as a marriage certificate,divorce decree, or death certificate.

If you have questionsabout how to complete the form, contact the new firm for help. Oncecompleted, keep a copy of the form for your records.
Understand the Transfer Process
All transfers start and end with your new firm, but your old firm needs to take action too. 
Electronic Transfers
Most account transfersbetween brokerage firms are made using the Automated Customer AccountTransfer Service (or "ACATS") system. The National Securities ClearingCorporation operates ACATS, and both the New York Stock Exchange andthe National Association of Securities Dealers, Inc. require theirmember firms to use ACATS. 

These rules require firmsto complete various stages of the transfer process within a limitedperiod of time. If the transfer is made through ACATS, and there are noproblems, the transfer should take no more than six business days tocomplete from the time your new firm enters your form into ACATS.

During this time, yourold firm compares the information you provided on the transfer formwith its information. If the information matches, your old and newfirms review the transferable assets. If the transfer includes a marginaccount, the new firm also examines the account to see whether theaccount meets the firm's margin standards. Firms may have differentmargin standards about how much they will lend you to trade. While thetransfer is in progress, your account may be "frozen" for part of thetime. If this occurs, you may be unable to trade. Check with both yourold and new firms if you want to trade during the transfer process.

Under the "ACATS forBanks" program initiated by DTCC in February 1999, banks mayvoluntarily participate in ACATS. If a bank participates in theprogram, then a transfer from the participating bank to a brokeragefirm or vice a versa should occur in the standard ACATS time frame ofsix business days. If you are transferring your account to or from abank you should ask whether the bank participates in the "ACATS forBanks" program.

Be aware that delays mayoccur when you transfer a retirement account. Because retirementaccounts require a financial institution, such as a bank, to act as thecustodian or holder of the account, you must have a custodialarrangement in place at your new financial institution before thetransfer can occur. A delay may happen if you have not paid themaintenance fee to the old custodian or the new custodian does notallow a security in the retirement account to be transferred. Onceeverything is in place, the transfer can be made through ACATS.
Manual Transfers
Sometimes, a transferis made manually. This occurs when your assets are with a bank, mutualfund, credit union, insurance company, or limited partnership that doesnot participate in ACATS. This also may occur if you request aliquidation of assets other than the standard money market fund in youraccount. There are no set time frames for completing a manual transferwith these financial institutions. For that reason - and the potentialrisk of market volatility should there be any delay - you may not wantto liquidate any assets via instructions on the transfer form. 

A manual transfer mayalso occur when you request a partial transfer of your account betweenbrokerage firms. The rules of the NYSE and FINRA require firms toexpedite or complete these requests in a reasonable amount of time, butfirms have the option to make these transfers electronically throughACATS. If you are making a partial transfer, tell the new firm youwould like the transfer to go through ACATS.
Monitor Your Transfer
Since both the old andnew firms must act to complete the transfer, stay in touch with both ofthem. Make sure the new firm has received your transfer form. If yousent the form to a branch office, it may take a few days before it isreceived at the firm's headquarters for processing.

You may also want to askthe old firm whether it has received the transfer request. If thetransfer goes through ACATS, the old firm has three business days fromthe time it receives the transfer form to decide if it is going tocomplete or reject the transfer. If the assets in an account can betransferred through ACATS, a firm can reject a transfer request only ifthe form has been completed incorrectly or there is a question aboutthe ownership of the account or the number of shares. Ask the firmwhether it will transfer your account or if there is a problem withyour instructions. If there is a problem, ask for an explanation andhow to correct it.

If the old firm takes noaction on the request or a problem is not resolved within six businessdays, the transfer request is purged (or deleted) from ACATS. If thathappens, the new firm must start over by again inputting the transferrequest into ACATS.
Know Which Securities May Not Transfer
Some types of securities may not be transferred.  These securities include: 
- securities sold exclusively by your old firm; 
- mutual funds or money market funds not available at the new firm;  
- limited partnerships that are private placements; 
- annuities; or 
- bankrupt securities.
If your request includessome of these non-transferable securities, it may take longer tocomplete a transfer. Your old firm is required to transfer whateversecurities or assets it can through ACATS and ask you what you want todo with the others. You generally have two choices: either sell thenon-transferable security and transfer the cash, or leave the securitywith your old firm. Sometimes, you may be able to take possession ofthe security itself. Taking possession of a security may pose risks,such as the security could be stolen. Also, it may not be advisable forretirement plans.Keep These Final Thoughts in Mind
Your old firm maycharge you a fee for the transfer to cover administrative costs.Sometimes, the new firm will also charge a fee. These fees aretypically spelled out in your account agreements with the firms.

Expect delays inreceiving dividends, interest, and proceeds from sales of securities.They often arrive at your old firm after the transfer has taken place.Your old firm is required to transfer them to you at your new firm —within ten business days of receipts — for at least six months afterthe account transfer is completed. 

If you feel like youraccount has not been transferred in a timely fashion, ask to speak tothe compliance director at your old or new firm. If you are notsatisfied, contact the New York Stock Exchange or the FINRA, depending on where your brokerage firm is a member. 

Finally, Ask Questions!A simple error could significantly delay the transfer. Be certain yourold and new firms have the information they need to make the transferhappen in a timely fashion.

*http://www.sec.gov/investor/pubs/acctxfer.htm*Home | Previous PageModified: 04/16/2009 |
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