Transfer A Brokerage Account: How Much Does It Cost?


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On June 19, 2012
Last modified:October 29, 2012

Summary:

The cost to transfer brokerage account from one broker to another differs, with many charge about $50 for an account transfer out. However, many brokers at the receiving end of the transfer reimburse their new customers for the transfer fee, reducing the actual cost of the transfer.

Nowadays, there are many online discount brokers to choose from if you want to open a brokerage account and begin trading stocks and/or options on you own. Of course, every broker is different in many ways including fees, services, and tools, and there are lots of things to compare and contrast before the final decision on which broker gets your business is made. And from there, the happy trading and investing, hopefully, begin after a long and thorough research.

Though I think the brokerage industry is relatively stable comparing to industries, such as banking, in the financial sector, there are still plenty of new developments. In the past few years, I have seen some brokers adjusted their commissions, a few new brokers emerged, and some got swallowed by their larger rivals  (most recently the merger of TradeKing and Zecco). If any of these happened to your broker, another review should be in order to determine whether or not the broker could still meet your needs after the change. If the conclusion is negative, one of the potions you could take is transfer your account to another broker that can better serve you.

I have in the past moved my brokerage account from one broker to another twice. Once from ShareBuilder to Zecco, and once from Firstrade to TradeKing. I also did an IRA transfer from Scottrade to Vanguard a while ago and had a very bad experience that I don’t even want to mention. For me, the main reason for those switches was to save on commission, even though I don’t trade a lot so the savings from switching to a cheaper broker isn’t that significant when looking at the fees I paid in one year. Over the long term, however, I do hope that the move could result in a larger benefit.

Usually, transferring account from one broker to another is quite simple. All you need to do is

  1. Open an account with the broker you want to transfer to if you don’t already have an account with them;
  2. Initiate the account transfer process by submitting a Automated Customer Account Transfer (ACAT) form;
  3. Wait for the process to complete,
  4. Finally, request reimbursement of any account transfer-out fee charged by the other broker that you just left.

While the opening an account part can be done online and takes only a few minutes to complete, in most cases you do have to submit the ACAT form by fax or mail, which takes some additional time. The most time consuming part of the whole account transfer process is the waiting, which can go as long as a few weeks, for both transferring the account and getting reimbursed for the transfer fee.

On one hand you probably think that the broker you are leaving isn’t happy about losing you, so they may impose fees if you want to get out. That’s indeed usually the case. A $50 account outgoing transfer fee is pretty standard. On the other hand, the broker on the receiving end may not show their appreciation of having you as a new customer because a lot of brokers still want you, their new customer, to pay for the account transfer fee. Though this doesn’t sound right to me, that’s what happens at some brokers. Fortunately, there are also brokers do encourage account transfer-in by reimbursing the transfer fee.

Following are some information on how to transfer your brokerage account from one firm to another. I only list some discount brokers here because I feel that most of the time the reason for switching is commission. To me, it doesn’t make too much sense to transfer from a broker that charges $4 fee to another broker which has a $10 commission, unless there’s some serious mess up :)

Scottrade (reviews)

TradeKing (reviews)

  • TradeKing doesn’t charge a fee for incoming account transfer and it will reimburse up to $150 account transfer fee charged by other brokers;
  • Open a TradeKing account first and submit account transfer form (fax or mail);
  • Transfer takes up to 7 to 10 business days;
  • TradeKing commission: $4.95 per trade;
  • TradeKing account transfer-out fee: $50;

Zecco (reviews)

  • Zecco also doesn’t encourage account transfer-in because it provides no reimbursement or incentive to do so, but you get zero commission trades :) ;
  • Open a Zecco account first and submit account transfer form by mail or fax; scanned form is also acceptable;
  • Account transfer takes 10 to 20 days to complete;
  • Zecco commission: $4.95 per trade;
  • Zecco account transfer-out fee: $50;

Firstrade (reviews)

ShareBuilder (reviews)

  • ShareBuilder gives no benefit for transferring an account from other broker to them;
  • Open a SharBuilder account first and submit account transfer form by mail;
  • Account transfer can take as long as 4 to 6 weeks;
  • ShareBuilder commission: $9.95 per real-time trade, $4 auto investment plan;
  • ShareBuilder account transfer-out fee: $75;

E*Trade (reviews)

  • E*Trade is not any better than other brokers in terms account transfer-in: no fee reimbursement or anything;
  • Open an E*Trade account and you will have the opportunity to transfer the account in, or choose to send in the form later by mail or fax;
  • Account transfer usually takes 3 to 6 weeks;
  • E*Trade commission: $9.99 per trade;
  • E*Trade account transfer-out fee: $60;

OptionsHouse (reviews)

  • Options House also gives you up to $100 for transferring your account at other broker to Options House using promo code ACAT100REFUND
  • Open an Options House account, submit ACAT Account Transfer form and Change of Ownership form, and request fee reimbursement;
  • No expiration date;
  • Account transfer takes 5 to 10 business days;
  • Options House commission: $3.95 per trade;
  • Options House account transfer-out fee: $50;

optionsXpress (reviews)

  • optionsXpress reimburse you up to $100 charged by other brokers for transferring your account of at least $2,000 to optionsXpress;
  • Open a optionsXpress account, print and submit account transfer form, and request fee reimbursement;
  • optionsXpress commission: $8.95 per trade;
  • optionsXpress account transfer-out fee: $60;
The cost to transfer brokerage account from one broker to another differs, with many charge about $50 for an account transfer out. However, many brokers at the receiving end of the transfer reimburse their new customers for the transfer fee, reducing the actual cost of the transfer.

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