Account Transfer from ShareBuilder to Zecco: The Information You Need
Last week I posted an entry on transferring my account at ShareBuilder to Zecco. After the post was published, I got an email from Drew who is interested in some more information about the transfer:
I enjoyed your current posts on Zecco and moving from ShareBuilder to Zecco. I currently have a portfolio with ShareBuilder but I’d like to move onto Zecco – would you mind posting more on how you initiated your transfer, what happened to your partial shares, and fees?
The actual transfer process is quite easy (how long it will take to complete and whether the process can go smoothly are separate issues). If you determined to make the shift, then all you need to do is download an account transfer form from Zecco website (PDF file), fill it out, and send it over.
1. Information in the form
There are three sections on the form that you need to fill out. The first part is your account information (click the following image to enlarge).
I was a little confused about the “Title of Your Account” when I got the form, so I called Zecco and was told that the title of your account is actually the type of your account: individual account, joint account, or IRA account, like that. However, the form doesn’t ask the name(s) of the account holder(s). To be safe, I put Joint Account and our names anyway.
The second half of the first section is information about your ShareBuilder account. In addition to the account title, account number and name of the brokerage, you will also need ShareBuilder’s Broker Clearing No. This information is not available on ShareBuilder website, so I had to call them to ask for it (ShareBuilder customer service number 1-800-747-2357) and was told the number is 0443. The form also requires ShareBuilder’s mailing address:
1445 – 120th Avenue Northeast
Bellevue, WA 98005
The second section of form concerns how you want your account at ShareBuilder transferred.
Here, you will have to choices: In Kind Transfer, which means you will transfer whatever you have at ShareBuilder as they are; Liquidate, meaning your positions at ShareBuilder will be liquidated first and the proceeds will be transferred to Zecco. For me, I chose In Kind Transfer, so I got to keep all the shares I have. If you choose Liquidate and it’s a regular account (as oppose to IRA account) , you will be responsible for taxes for any gains realized from this transaction.
On the account transfer form, you will also find the following paragraph:
I authorize you to liquidate any non-transferable proprietary money market fund assets that are part of my account and transfer the resulting credit balance to PFSI.
This refers to any uninvested cash in your ShareBuilder account, which is held in the money market account as shown in the following image.
My understanding is this part will be liquidated and transferred as cash to your Zecco account.
The last part of the form is where you sign and date the form. It also has a section for Medallion Signature Guarantee, but I was told that the signature guarantee is not necessary.
2. Send your form
Once you are done with the form, you can fax it to Zecco to get the transfer process right away (Zecco fax number is 1-909-657-6638). However, you still need to mail the original form back to
P.O. Box 4328
Ontario, CA 91761
Considering that it will quite some time (20 business days) for the transfer to be completed, it’s better to fax them your form first.
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3. Fractional shares
Though Zecco doesn’t support fractional share purchases, there shouldn’t be a problem if you make in kind transfer from ShareBuilder, which allows you to buy fractional shares. My reason is since Zecco supports dividend reinvestment, they will purchase fractional shares for you with your dividend distribution anyway.
Update: After getting a comment from aschmuck, I searched Zecco’s website about partial share transfer. Here’s the policy regarding partial share transfer:
Can I transfer stocks to Zecco Trading in kind?
Yes, in order to transfer your positions in kind, without having to liquidate, you will need to fill out the ACAT (Account Transfer) form. Please keep in mind that only full shares of equities can be transferred.
Related information can also be found on ShareBuilder website (Help -> Help Topics -> Transferring Account Assets), which says
As only whole shares can be transferred, any partial shares that you have will be sold and the proceeds will be transferred with the money market cash balance.
There is a fee of $50 for a full account transfer to another brokerage. This includes the transfer of all whole shares of securities held in your ShareBuilder Account, the liquidation of any partial shares (as needed), and the transfer of the money market cash balance.
Thus, ShareBuilder will liquidate the partial shares you have and the transfer the proceeds as cash. Since ShareBuilder charges $15.50 per real-time trade, my following comment on selling shares instead of transferring them for small accounts makes more sense.
As you can imagine, since Zecco wants your business, they are not going to charge you for transferring an account to Zecco and that’s indeed the case, though there’s a $50 fee listed in their fee schedule for account transfer. I assume that’s for account transfer out. Then, since ShareBuilder is not happy for you leaving them, they will charge you $50 for your departure.
If you have a small account at ShareBuilder and only make a small profit (or a small lose), I feel that it’s better to just sell all your shares and close the account than transferring it out. From ShareBuilder’s website, it doesn’t seem ShareBuilder charges fee for closing the account. In this case, paying $50 account transfer out fee isn’t worth it.
These are the issues I can think of regarding account transfer. Since the transfer is still in progress, I don’t know if there will be any other problems and exactly when the transfer will be completed. I will post any development when it occurs.
If you are interested in getting a Zecco brokerage account, either opening one directly or through account transfer, check out my Zecco review first for more details about the discount broker. See discount broker comparison for how Zecco compares against other discount brokers.
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