Broker ACAT Fees (Account Transfer Out Cost and Reimbursement) in 2019


How much do brokerage firms charge in full and partial outgoing account transfer out fees? Compare ACAT fees, cost, reimbursement for moving eligible account (including IRA) from Ally Invest, TD Ameritrade, Vanguard, Wells Fargo, IB, Fidelity, Merrill Lynch, Etrade, and Charles Schwab.



What are ACAT Fees?


The Automated Customer Account Transfer Service (ACATS) is used by brokerages to facilitate the electronic transfer of accounts from one brokerage or bank to another. Entire accounts, or one or more specific securities, may be transferred from one institution to another. A fee is charged for using ACATS primarily due to the paperwork involved to verify ownership; provide necessary documentation for securities such as purchase date, number of shares, tax information; and execute the transfer.

Eligible securities include cash, equities, corporate and municipal bonds of domestic companies, listed options, mutual funds, unit investment trusts, and annuities. Depending on the two companies involved in the transfer, other assets may or may not be allowed to be transferred. Investors should always check with their brokers to make sure the assets they want to transfer are able to be transferred to the receiving account.


Full/Partial Account Transfer Fees Charged by Brokers



* $2,500 minimum equity balance must remain in the account; otherwise the $75 full transfer fee will apply


How Much do Brokerages Charge in Transfer Fees (ACAT Fees)?


Some companies — such as Vanguard, Schwab, and Ally Invest (formerly TradeKing) — don't charge fees for incoming transfers, while others may charge fees for inbound and outbound accounts. Fees vary, but $25—$100 is typical for discount brokers. Banks and full-service brokers may charge more.

Transferring an entire account usually costs more (full transfer fee) than only transferring part of an account (partial transfer fee). Many companies won't charge for a partial transfer if a minimum account balance remains in the account. For example, E*Trade charges $75 for an outgoing full account transfer and $25 for an outgoing partial transfer. However, the $25 fee is waived if the remaining account balance is greater than $5,000.

Some clients may find their broker doesn't charge to transfer cash. In that case, selling some or all assets and then doing an ACATS transfer may reduce the full transfer fee to a partial fee.

If a broker doesn't charge an account closing fee, then selling all assets, converting to cash, closing the account, and then sending the cash to the new broker may save the full ACATS transfer fee. Individuals who choose to sell any assets before transferring funds to a new broker must consider the tax ramifications of selling appreciated assets, since they may incur more in tax liabilities than they save in fees.

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Why ACATS at All?


In today's electronic trading age, investors want the freedom to trade fast and move money quickly as needed. ACATS speeds up the account transfer process to as short as six business days, which may still seem like an eternity to active traders. Simply eliminating the time it takes to mail physical documents back and forth via the US Postal Service may save weeks of inactivity.

Depending on the securities involved and the participating firms, investors who trade securities in accounts that are being processed via ACATS may slow down the processing time considerably. Most companies recommend not trading any account that is being transferred to avoid delays.


Main Reasons to Transfer an Account to a Different Broker


Cash bonuses, free trades, or discounted commissions. Some active investors may choose to move an account from one discount broker to another in order to earn a sign-on bonus, or a certain number of free trades or discounted commissions, based on a broker's promotion. A bonus of several hundred dollars, or 60 or 90 free trades or a similar discount (for example--free trades for 90 days) may well be worth a nominal transfer fee to some clients.

Better service. Clients may be dissatisfied with a broker's customer service, commission structure, record keeping, or trade execution.

Account consolidation. Many investors have numerous accounts for various reasons—diversification, access to better trading tools and advice, blending accounts via marriage, or simply inattention to how many accounts have been opened over the years. They may want to simplify their record keeping by consolidating accounts with similar registrations, such as 401(k)s that may have been started with different employers and then were converted into Rollover IRAs.

Avoid taxable events. Rather than sell all securities in the old account before transferring to a new brokerage, ACATS avoids creating a taxable event because securities aren't sold. The registration is changed to reflect the new brokerage, but the securities aren't sold and then repurchased when the funds arrive at the new broker. This could save hundreds or thousands of dollars for clients who have large accounts and would incur capital gains if certain assets were sold.

Converting a 401(k) to a Rollover IRA. This is popular with individuals at or near retirement who want more or different investment options. This also avoids the risk of what is known as "constructive receipt of funds" from a retirement account. Failure to re-invest retirement payouts into another retirement plan after 60 days causes the withdrawn funds to be taxed as ordinary income. Doing a custodian-to-custodian transfer using ACATS prevents the possibility of any tax liability. It should be noted that securities such as proprietary mutual funds or ETFs that aren't offered or traded by the new broker may need to be sold and converted to cash before transferring assets to that broker. This is common in 401(k) plans where certain funds are only available in that custodian's investment options.


Brokerage ACAT Fees Comparison Conclusion


Although the brokerage ACATS fee disclosure is usually buried deep in most brokers' websites, investors should always know what their current broker's fee is and find out what a prospective new broker's fee will be. Also, check to see if margin requirements for securities held in the old account will be different with the new broker. Some brokers don't make markets on certain exchanges or with certain stocks or other assets, which means the new broker might require the investor to sell those assets before doing a full account transfer. Moving an account from one institution to another can often be complicated, so do your homework and ask questions of both brokers, new and old, before starting the process.