Ask Stacy: How Do I Switch Brokerage Accounts?

Moving from one investment company to another is simple -- but prepare for an unpleasant surprise.

Ask Stacy: How Do I Switch Brokerage Accounts? Photo by crazystocker / Shutterstock.com

Welcome to “Ask Stacy,” a short video feature answering money questions submitted by readers and viewers. You can learn how to send in a question of your own below.

If you’re not typically a video watcher, give it a try. These videos are short and painless, and you’ll learn something valuable. But if you can’t deal with video, no problem: Just scroll down this page for the full transcript of the video, as well as some reader resources.

Today’s question is about how to move from one brokerage firm to another. This one is up my alley, since I worked as a Wall Street investment adviser for more than 10 years. Although it was a long time ago, the transfer process is the same, with one notable exception. Check out the video to see what it is.

For more information on this topic, check out “8 Basics That Beginning Investors Must Know” and “Ask Stacy: How Do I Invest in the Stock Market?” You can also go to the search at the top of this page, put in the word “investing” and find plenty of information on just about everything relating to this topic.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your money Q&A question of the day. I’m your host, Stacy Johnson, coming to you live and in color from Fort Lauderdale, Florida, the yachting capital of the world.

This answer is brought to you by MoneyTalksNews.com, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Catherine:

“I’ve been with Edward Jones for a long time, but I wish to leave them and buy index funds from Vanguard. How do I do that? Do I pick the index fund first? Do they tell Edward Jones, or do I? There shouldn’t be a charge for leaving Edward Jones, but I’m concerned there may be. Please advise.”

Let’s answer these questions one at a time.

How do you transfer from one investment firm to another? It’s pretty easy. You’re going to pick up the phone and call the firm you’re transferring to and get the ball rolling. If it’s Vanguard, you’ll call them on their 1-800 number. They’re going to get you something called an “automated customer account transfer service form,” aka an ACATS form. You sign it, and that gives Vanguard permission to transfer your account and everything in it from Edward Jones.

They basically do all the work, and you don’t have to notify Edward Jones; Vanguard will do so. It will take from a few days to a week or so to get all your securities over to Vanguard. Once there, you can decide to sell what you want sold — if anything — and buy what you want bought, like index funds.

As for your question about a charge for leaving Edward Jones, your concern is valid.

I looked up Edward Jones’ schedule of fees, which you can do yourself by searching “schedule of fees Edward Jones.” I found that they have a $95 charge to transfer accounts out.

Many years ago, I was an investment adviser for two Wall Street firms: E.F. Hutton and Shearson Lehman. Back then, this fee didn’t exist. Now, in the age of the never-ending fee, investment firms are apparently reaching into your pocket one last time when you take your money elsewhere. Is it fair? Heck, no. It’s an insult. But it is what it is. So, while you can always ask to have the fee waived, you’ll probably end up paying $95 to transfer your account to Vanguard.

That’s all we’ve got for today — except, of course, for our quote of the day. Today’s quote comes from RuPaul, the singer, songwriter and famous drag queen.

“All sins are forgiven once you start making a lot of money.”

There’s your thought for the day. Make it a profitable one, and meet me right here next time!

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The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Got more money questions? Browse lots more Ask Stacy answers here.

Stacy Johnson
Stacy Johnson @moneytalksnews
I'm the founder of Money Talks News and have spent the last 40+ years in the personal finance trenches. I'm a CPA, author of a few books and multiple Emmy recipient. I'm ... More

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