A lot of people stay with an adviser longer than they want to, and it usually isn’t loyalty. Moving accounts sounds complicated, and nobody wants to sell everything, trigger a tax bill or have money sitting in limbo. In practice, a move between firms is mostly paperwork, and most of it is handled for you. This guide walks through what happens, how long it takes, what can get in the way and what it can cost.
If you move to Reese Legacy Capital, your accounts move to Charles Schwab, in your own name. The same process applies to most moves between advisory and brokerage firms.
The short version
- You usually don’t have to sell anything. Most stocks, ETFs, bonds and widely available mutual funds move as they are, which is called a transfer “in kind.”
- The new firm starts the transfer. You sign a transfer request, and the receiving firm sends it to your old firm. You don’t need your current adviser’s permission.
- Most transfers take about a week. Through the industry’s automated system (ACATS), the SEC says a transfer should take approximately three to five business days once it is entered, if there are no problems.
- Your cost basis comes with it. Your old firm must send the cost information for covered securities to the new firm within 15 days of the transfer settling.
- A few things don’t move cleanly. Funds that only your old firm offers, annuities and fractional shares are the usual exceptions, covered below.
Typical timeline
How long each part takes
You signThe advisory agreement and transfer request, much of it signed electronically.
Most assets moveTypical time through the automated transfer system once the request is entered.
Cost basis followsThe deadline for your old firm to send cost information after the transfer settles.
Harder-to-move holdingsTransfers outside the automated system, such as private investments, can take longer.
Typical times from the SEC and IRS rules cited in this article. Actual timing varies by firm and account.
How a move to Schwab works, step by step
Moving to Schwab, step by step
- Decide, and sign the advisory agreementYou receive Form ADV Part 2A, the firm’s disclosure brochure, before or when you sign. The agreement gives me limited authority to manage the accounts on your behalf.
- Open matching accounts at SchwabEach new account has to match the old one exactly: individual to individual, joint to joint, IRA to IRA, trust to trust. A mismatch is the most common reason a transfer gets rejected.
- Sign the transfer requestUsing your most recent statement from the old firm, the transfer is submitted for each account. Most of the forms can be signed electronically.
- The assets arrivePositions show up at Schwab in kind, usually within about a week. Small amounts, like a late dividend, can trickle in a few weeks later.
- Review before changing anythingWe compare the old and new statements, confirm the cost basis arrived, and decide what to keep, what to change and when, with the tax cost in view.
What may not transfer cleanly
The SEC lists several kinds of holdings that often can’t move through the automated system. It’s worth asking about these before you start, not after.
What moves, and what may need extra steps
Usually moves as is
- Individual stocks
- ETFs
- Bonds and Treasuries
- Widely available mutual funds
- Cash
May need extra steps
- Funds only your old firm offers
- Annuities
- Fractional shares
- Private placements and partnerships
General guidance. Ask your current firm which holdings can transfer before you start.
- Funds only your old firm offers. Some firms sell their own mutual funds or money market funds that other firms can’t hold. Those may need to be sold before or during the move. In a taxable account, a sale can create a capital gain.
- Annuities. An annuity is a contract with an insurance company, not a security sitting in the account, so it doesn’t move the way a stock does. Many carry surrender charges for the first several years. Often the right answer is to leave it in place and review it on its own schedule.
- Fractional shares. These are usually sold for cash as part of the transfer.
- Private placements, limited partnerships and some alternative investments. These can take longer and sometimes stay where they are.
Transfers that can’t go through the automated system still happen, just more slowly. The SEC notes that it is not uncommon for those to take up to 30 days.
Retirement accounts and old workplace plans
Moving an IRA from one custodian to another is handled as a direct, trustee-to-trustee transfer. The money never passes through your hands, so there is no tax withholding, no 60-day deadline, and it doesn’t count toward the IRS’s once-per-year rollover limit.
A 401(k) from a former employer works differently. It moves by rollover, and the details matter. I’ve covered them in 401(k) rollover in Lancaster, PA: direct vs. indirect, explained. A plan at your current employer usually stays where it is.
Retirement accounts: how each one moves
| Account | How it moves | Tax withholding | 60-day deadline |
|---|---|---|---|
| IRA | Direct transfer between custodians | None | No |
| 401(k) from a former employer | Direct rollover to an IRA | None if sent directly | Only if the check is paid to you |
| Plan at your current employer | Usually stays where it is | Not applicable | Not applicable |
General rules. A check paid to you from a 401(k) generally has 20% withheld. See the 401(k) rollover article for details.
Taxes: where the surprises come from
Moving a position in kind is not a sale, so the move by itself doesn’t create a tax bill. Taxes come from selling: either a holding that can’t transfer, or changes made after the move. In a taxable account, I don’t assume everything has to be sold on day one. Changes are planned around the tax cost, and coordinated with your CPA when it matters. Retirement accounts don’t have this issue, since trades inside an IRA aren’t taxed when they happen.
Fees to ask about up front
- Your old firm’s transfer or closing fee. Many firms charge one per account. Ask for it in writing before you start.
- Your old adviser’s final fee. Most advisers bill for the period they managed the account, so expect a last bill.
- Annuity surrender charges, if you decide to exit an annuity.
- The new adviser’s fee. At Reese Legacy Capital, that is an annual percentage of the assets I manage, billed quarterly in arrears. The full schedule and a calculator are on the fees page.
A few things that keep a transfer smooth
- Don’t trade in the old account once the transfer is submitted.
- Let the transfer close the old account, rather than closing it yourself first.
- Update anything automatic: deposits, withdrawals, required minimum distributions and bill payments.
- Confirm your beneficiaries at the new firm. Beneficiary designations on IRAs and transfer-on-death accounts may not carry over, and they override your will.
- Keep your last statements from the old firm for your records.
The conversation with your current adviser
You don’t have to have one. The transfer request is the notice. Some people prefer to send a short, polite note, especially after a long relationship, and that’s a fine thing to do. Your old firm may call to ask you to stay. That’s normal, and you’re free to say no.
How this works at Reese Legacy Capital
Accounts are held at Charles Schwab in your name. I coordinate the transfer paperwork with you, much of it signed electronically through Schwab, track the transfer until everything arrives, and walk through the new statements with you before any changes are made. You work with me directly the whole way, with no hand-off to a transitions team.
If you’re weighing a move, the first step is simply a conversation about what you hold now and whether the move makes sense. For what to look for in an adviser before you switch, see Financial advisor in Lancaster, PA: how to choose one, or start a conversation.
Common questions
How long does it take to move accounts to a new adviser?
Most transfers through the automated system take about a week once they are submitted. Transfers outside that system, or accounts with hard-to-move holdings, can take up to 30 days.
Do I have to tell my current adviser before I switch?
No. The new firm submits the transfer request, and that serves as notice to the old firm. Some people choose to send a note as a courtesy.
Will I have to sell my investments and pay taxes?
Usually not. Most stocks, ETFs, bonds and common mutual funds move in kind, which is not a sale. Holdings that only your old firm offers may need to be sold, and in a taxable account that can create a gain.
Will my cost basis transfer?
Yes, for covered securities. Your old firm is required to send it to the new firm within 15 days of the transfer settling. It’s still worth checking once it arrives.
Can I move only part of an account?
Yes. A partial transfer moves the positions you choose and leaves the rest in place.
What happens to my annuity?
Annuities don’t move like securities. Depending on the contract and any surrender charges, it may make sense to keep it, change the adviser on record, or exchange it later. It deserves its own review.
This article is for general educational purposes and is not legal, tax, or investment advice. Transfer procedures, timelines and fees vary by firm and account type, and the details of your accounts may differ. Reese Legacy Capital is a registered investment adviser in the Commonwealth of Pennsylvania. Registration does not imply a certain level of skill or training. For a full description of services, fees, conflicts, and risks, request Form ADV Part 2A.
Robert Reese
Founder of Reese Legacy Capital, a fee-only fiduciary adviser in Lancaster County, PA. About Robert
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