Can I transfer my stocks to another broker? Is there a fee? What if my broker goes under?
Tech P asked:
I’m wondering what would happen if my broker goes out of business. How would I go about having my shares transfered to a new broker? Would that broker charge me a fee to do so (what would this fee be called, and do you know if/what brokers charge it)?
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I’m wondering what would happen if my broker goes out of business. How would I go about having my shares transfered to a new broker? Would that broker charge me a fee to do so (what would this fee be called, and do you know if/what brokers charge it)?
March 16th, 2009 at 12:14 pm
If your broker goes out of business, it should not affect your assets that they hold for you (unless you invest in shares of the brokerage itself, or the broker does something illegal). Many have insurance to protect up to $500,000 of your assets from anything that happens to your broker.
Some brokers might charge a nominal fee to close out an account. Some other brokers (like thinkorswim.com) might pay any close out or transfer fee your former broker charged, just to get your business.
If you transfer everything “in kind”, it just changes ownership of the equities or funds (assuming your new broker handles those) with no tax consequences. If you cash everything out in the process of the transfer, there could capital gain/loss for tax purposes (unless within an IRA).
March 19th, 2009 at 6:01 pm
My brokerage has been sold 3 times. It is pretty seamless. Everything just slides over. If a brokerage goes under the SIPC generally will arrange for the sale of the brokerage to a new brokerage and again the transfer is automatic. If you choose to move your assets to another brokerage there usually is a fee which can be reimbursed by the new brokerage if you have a large desirable account. Check your current brokerage’s fee section which will list the transfer charges.
Your brokerage should have SIPC insurance which protects the investor in case of failure. Read more at www,sipc.org and under “who we are” you can look up to see if your brokerage is a member in the member database.