A shift among retail brokers to a zero-commission structure has led some investors to ask if it’s time to make a change. If you’re thinking about switching to TD Ameritrade, here are a few things you should know.
Here’s what you need to know about “in-kind transfers” and other basics
You probably spent a lot of time and effort constructing your portfolio—maybe you consider it a work of investing art and you’ve grown attached to it. Investors may be reluctant to take the plunge and switch to a new brokerage, worrying it will be disruptive and complicated. But switching to TD Ameritrade is relatively easy, doesn’t require you to close out your positions, and can offer benefits.
Here’s some information to help you get started.
From the powerful tools and trading platforms, to investing and retirement resources, it’s all about taking it to the next level. What’s more, as a TD Ameritrade client, you’ll gain access to a wide array of educational resources. Here’s a sample:
Most “total account transfers” are made through the Automated Customer Account Transfer Service (ACATS), a regulated service operated by the National Securities Clearing Corp. (NSCC), and take five to eight business days once initiated (see below for details on in-kind transfers).
Transfers from some smaller brokers that aren’t NSCC members are processed as “non-ACATS transfers,” and require a similar time frame.
An in-kind transfer is essentially about keeping it simple for investors. With an in-kind transfer, you can transfer your investments from one broker to TD Ameritrade as presently comprised—no need to sell anything and shift the cash proceeds.
Typically, most equities, bonds, mutual funds, and a few other asset categories can be transferred in-kind. TD Ameritrade accepts in-kind transfers, which can help you avoid tax implications (while you’re at it, brush up on possible capital gains taxes or any other tax consequences from selling shares).
Yes. For “partial” account transfers, you must complete a transfer form listing the specific number of shares for each asset to be moved. If you’d like to handle the process online, login to your account at tdameritrade.com. Under the My Account tab, select Account Transfer and follow the steps. Make sure you have a copy of the latest account statement for the account from which you’re transferring funds.
If you’d rather make your transfer request via paper, you’ll need to complete an External Account Transfer Form).
Partial transfers through ACATS are typically completed within 3-5 business days. Non-ACATS partial transfers could take 3-6 weeks (mutual funds held directly with a mutual fund company can also be transferred through the non-ACATS process).
Whether you’ll be charged fees for transferring will depend on your current broker. TD Ameritrade doesn’t charge clients a fee to transfer an account to TD Ameritrade. However, there may be fees attached to holding certain types of assets in your TD Ameritrade account.
For example, “non-standard” assets, such as limited partnerships and so-called private placements, can only be held in TD Ameritrade IRAs, and will be charged additional fees.
The “delivering” broker will usually charge fees to transfer the account out, which may result in a debit balance once your transfer is completed. Investors seeking to avoid transferring their account with a debit balance should contact the delivering broker before making any transfers.
If your broker does charge you a transfer fee, TD Ameritrade will refund you up to $100.
Yes. Good record-keeping is fundamental to sound investing practices and strategy.
Though a number of brokerage firms have moved to a zero-commission structure, not all brokers are the same.
Just know that, if you’re considering a move to a greener pasture for your investments, the physical transfer of your portfolio doesn’t need to be an impediment. The process can be relatively simple and straightforward.
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