How to Change Investment Companies: ACATS Process and Fees

To change investment companies, you open an account of the same type at the new firm, submit a transfer form to that new firm, and let the Automated Customer Account Transfer Service (ACATS) pull your securities and cash from the old brokerage. Most holdings move in their original form, so you don’t have to sell and rebuy, and a clean transfer finishes within six business days.¹ Factoring in paperwork and non-ACATS assets, the SEC says the whole process more commonly takes two to three weeks.

Open a Matching Account at the New Firm First

Before you request anything, open an account at the receiving firm that mirrors the one you’re leaving. A Traditional IRA has to transfer into a Traditional IRA, a Roth into a Roth, a joint brokerage account into another joint brokerage account. A mismatch will either get the request rejected outright or create tax consequences you didn’t plan for.¹

The identifying information on both accounts also needs to match exactly. Something as small as including your middle initial on one side but not the other can stall the process. Get the name, Social Security number, and account type aligned upfront and you avoid the single most common source of delays.

Handle IRAs as Trustee-to-Trustee Transfers

If you’re moving a retirement account, make sure the new firm sets it up as a direct trustee-to-trustee transfer. The money goes straight from one custodian to the other, no taxes are withheld, and the IRS doesn’t treat it as a distribution.²

If the old firm cuts you a check instead, that’s a distribution. The firm withholds 10% for federal taxes on an IRA distribution, 20% on an employer plan like a 401(k), and you have 60 days to deposit the full original amount into a new retirement account. Miss the window and the distribution becomes taxable income, plus a 10% early withdrawal penalty if you’re under 59½.³ Because part of the balance was already withheld, you’d have to come up with the difference from your own pocket to roll over the full amount.

There’s a second trap with indirect rollovers: you’re only allowed one per 12-month period across all your IRAs combined. Trustee-to-trustee transfers have no such limit.² ACATS is a direct transfer, so as long as you’re using it rather than requesting a check, these pitfalls don’t apply.

Fill Out the Transfer Form

Your new firm provides a Transfer of Assets (TOA) form, sometimes called a Transfer Initiation Form (TIF).⁴ Have your most recent statement from the old firm in front of you. The form will ask for:

The old firm’s full legal name as it appears on your statement, not a parent company or marketing name
Your account number at the old firm
Your Social Security number or Employer Identification Number, matching what the old firm has on file
Whether you want a full transfer or a partial one covering specific positions

Most firms handle this through their online portal or as a downloadable PDF, and some ask you to attach a copy of your current statement so they can verify holdings and ownership. Accuracy matters. A wrong account number or a name mismatch is one of the most frequent reasons transfers get rejected.

What Moves In-Kind and What Gets Sold

An in-kind transfer moves your holdings as they are. Shares of stock, ETFs, bonds, and most widely available mutual funds arrive at the new firm without being sold, which preserves your market position and avoids triggering capital gains taxes. That’s the default for anything the receiving firm supports.

A few categories can’t make the trip intact:

Proprietary mutual funds exclusive to your old firm have to be sold before the transfer, and the cash proceeds move instead
Non-proprietary funds can still be blocked if the new firm doesn’t have a distribution agreement with the fund company
Fractional shares, often created by dividend reinvestment, are usually liquidated into cash by the old firm

Fractional-share liquidations in a regular brokerage account count as sales, so you’ll owe capital gains tax on any appreciation. The amounts are usually small. Inside an IRA or 401(k), the liquidation has no immediate tax consequence. If your portfolio includes securities the new firm won’t accept, the old firm transfers everything it can through ACATS and then asks you what to do with the rest: sell and move the cash, or leave them behind.¹

Options and Margin Accounts

Open options contracts can transfer through ACATS, but the receiving firm has to support options trading and may need to approve you for the same level of activity you had before. Positions expiring within seven business days of the transfer are exempt from the account freeze and can still be closed at your old firm.⁵

Margin adds another layer. The new firm has to independently approve you for margin, and if your portfolio doesn’t meet its requirements, you may need to deposit funds or pay down the balance before the transfer completes. The SEC lists margin as one of the factors that commonly causes delays.

How the ACATS Process Runs

You submit the completed transfer form to your new firm, never to the old one. The new firm enters the request into ACATS, the centralized electronic system operated by the Depository Trust & Clearing Corporation through the National Securities Clearing Corporation.⁴ From there the process runs largely on its own.

Your old firm has three business days to validate the request or flag a problem.⁶ Once validated, the old firm freezes your account. Open orders are canceled and no new trades can be placed. The old firm then has three more business days to deliver the assets to the new firm.⁵ If nothing happens and a problem isn’t resolved within six business days, the request is purged from ACATS and you’ll need to resubmit.

Plan trades around the freeze. If you expect to react to market moves, get urgent trades done before submitting the transfer form. The only exception during the freeze is options positions expiring within seven business days, which can still be closed.

After the main transfer settles, don’t be surprised if a small amount of cash or a few shares trickle in over the following week or two. These residual sweeps catch pending dividends, unsettled trades, and fractional-share liquidation proceeds that weren’t ready when the bulk transfer went through. They usually happen automatically.

Common Reasons Transfers Get Rejected

Most rejections are data problems, and most of them clear on a second attempt once corrected. The SEC identifies these as the usual causes:

The transfer form was filled out incorrectly or the wrong form was used
The account number or Social Security number doesn’t match the old firm’s records
The account types don’t match, such as an IRA being sent to a standard brokerage account
A name discrepancy or change in account ownership
A lien, legal hold, or collateral assignment on the account

If your transfer gets kicked back, the new firm should be able to tell you exactly why.¹

What It Costs

Most brokerages charge the departing customer a fee for a full account transfer out, typically in the $50 to $75 range. The fee comes from the old firm, not the new one. Many receiving firms will reimburse it for new customers, often with a minimum-balance condition, so ask before you start. Partial transfers sometimes carry lower fees or none at all. Check the old firm’s fee schedule, usually filed under commissions and fees or miscellaneous fees, so you know what to expect.

After the Transfer: Verify Holdings, Cost Basis, and Beneficiaries

Once your assets show up at the new firm, compare them against your final statement from the old one. Every security that was supposed to transfer in-kind should be there, and anything that was liquidated should appear as cash.

The more important check is cost basis, the original purchase price and acquisition date for each position. Your old firm is required to send a transfer statement with this data within 15 days of the transfer settling. If it doesn’t appear at the new firm in that window, call them. The new broker has to request the data from the old firm, and if it still doesn’t arrive, they can treat the securities as noncovered, meaning they won’t report cost basis to the IRS when you sell.⁷ That leaves you to reconstruct the purchase history yourself at tax time.

Beneficiary designations are the other thing that gets lost. If your old account had a Transfer on Death (TOD) designation, don’t assume it followed the assets. FINRA advises confirming beneficiary designations with the new firm after any account transfer. A TOD designation supersedes your will for brokerage assets, so getting it wrong has consequences well beyond paperwork.⁸

1
U.S. Securities and Exchange Commission. Transferring Your Brokerage Account: Tips on Avoiding Delays
2
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
3
Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts
4
DTCC. Automated Customer Account Transfer Service (ACATS)
5
FINRA.org. FINRA Rule 11870 – Customer Account Transfer Contracts
6
FINRA.org. Customer Account Transfers
7
Internal Revenue Service. Instructions for Form 1099-B (2026)
8
FINRA.org. Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death