Investing > Complete Guide to ACAT Transfers

Complete Guide to ACAT Transfers

ACAT is one of the fastest ways to transfer your assets from one broker to another. 

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Reviewed by
Updated January 08, 2022

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

Does your current broker have more problems than a high-school math book? 🧮

Terrible interface, high commissions, or even a failing reputation – there can be many reasons why you no longer want the services of your current broker. Remember the uproar Robinhood caused after they halted the buying of GameStop stock? Many of Robinhood’s customers ended up wanting to leave the platform

If you are unhappy with your current broker, then you can consider switching to a new broker who can attend to your needs better. 

When you transfer your securities from your current broker to a new one, the transfer process will use the ACAT system. ACAT transfers or in-kind transfers are automated, secure, and fast – and should theoretically make switching brokers a straightforward process. But the transferring process could hit a snag. 

There is always the possibility of problems popping up while you transfer your assets, which is why you should have a good idea about what ACAT transfers entail before you think about switching brokers.

Let’s see what the fastest, safest, and hassle-free ways to go about this are. 🛡️

What you’ll learn
  • What is an ACAT Transfer?
  • How Does ACAT Transfer Work?
  • How to Switch Brokers in 5 Steps
  • ACAT Transfer Fees
  • Are ACAT Transfers Safe?
  • Make Your ACAT Transfer Quick
  • Conclusion
  • Choose Your Stock Broker

What is an ACAT Transfer? 🤔

ACAT stands for Automated Customer Account Transfer—it is a system that can help you transfer your securities from one trading account at a bank/broker to another. The ACAT system was developed by the National Securities Clearing Corporation (NSCC), DTCC’s subsidiary that provides the financial industry with services such as centralized clearing, risk management, information, and settlement.

Before the implementation of ACAT, the assets or securities had to be transferred manually. With the ACAT system, the transfer process was standardized and became completely automated. What this means is that an ACAT transfer will let you transfer whatever investments you have with one broker to another broker.

You do not have to sell your stocks with your broker and then invest the proceeds if you want to switch brokers—with ACAT, you can just move your investments.

All premium stock brokers accept ACAT transfers, so you should be able to transfer your investments with ease. But it will be subject to certain terms and conditions – that will vary depending on who your new broker is. Your new broker may not support certain investments, so you will need to sell those if you’re certain you want to switch brokers. 

How Does ACAT Transfer Work? ⚙️

While the ACAT system is automated, your new broker still has to initiate the transfer. The transfer can proceed when you, the client, sign the transfer documents. Once all the relevant paperwork is complete, your new broker will submit a request to your old broker using your account number. 

Every step of the transfer process can be conducted online. Most brokers will have the forms, called the Transfer Initiation Form (TIF), available on their website. If you have an account with the new broker, you can initiate a transfer by logging into your account and choosing the option that allows you to transfer assets from another financial institution. 

How Does ACAT Transfer Work
The delivering firm transfers the exact holdings to the receiving firm.

If the information that you have filled out on the transfer form matches with the information that your old broker has on their database, then the ACAT transfer process can begin. When they receive the transfer request, your old broker will send a list of your assets and securities to your new broker through the ACAT system. 

After receiving the list, your new broker will review your assets and securities, and then decide if they want to accept the transfer of the account. If your new broker accepts the transfer, it can take anywhere from three to six business days for the transfer to finish.

You should know that your new broker can choose to reject your account transfer. Your new broker will have the sole discretion in deciding which investments they want to accept. One of the most common reasons why your new broker may not be able to accept the transfer is their credit policies, where your account may not meet the minimum equity requirements of your new broker. 

What Securities Can You Transfer via ACAT? 👮

Usually, most publicly-traded stocks, exchange-traded funds (ETFs), bonds, options, mutual funds, and cash can be transferred through the ACAT system. As long as your bank is a member of the NSCC, you may even transfer certificated deposits. 

Types of Investments in Brokerage
Most brokerage accounts offer a wide variety of tradable assets.

It is not just securities that can be transferred through the ACAT – you can also transfer accounts including individual retirement accounts (IRAs), brokerage 401(k)s, taxable accounts, and trusts. Essentially, just about all of your investments are covered.

Ineligible ACAT Transfer Securities 🔒

While the ACAT system allows you to transfer most securities, certain securities cannot be transferred using the system. Funds that are held with an insurance company such as annuities cannot be transferred through the ACAT system. If you want to transfer an annuity, you will have to fill out forms that will start the transfer from the current agent of record (your insurance company) to another. 

Along with annuities, there are a few other securities that you cannot transfer through the ACAT system. Usually, the ineligible securities are either proprietary investments that belong to the institution or unlisted shares that may not be able to be transferred. 

With proprietary investments such as mutual funds and alternative investments, unlisted shares, and other securities that are traded over the counter – there may not be a way for you to move those investments anywhere. If you are no longer interested in working with your current broker, then you will need to liquidate your holdings. Your new broker may or may not have the same securities for repurchase.

How to Switch Brokers in 5 Steps 🔀

Switching to a new broker does not have to be a daunting process. In fact, you will not have to do much on your end. If you reach out to your new broker, they will be more than willing to guide you through the whole process. The best brokers want you as a customer and will be willing to help you transfer your account. The steps you will need to follow are:

1. Get the most Recent Broker Statement 🥇

When you transfer your securities to a new broker, they will need certain important information about your existing account. Your new broker will need to know your account number, the type of account you have, and your current investments. To access this information, they will need your most recent statement from the account that exists with your old broker.

2. Open Account with New Broker 🥈

You will need an account with your new broker if you want to transfer your securities. Most brokers do allow you to open an account online, so as long as you have all your pertinent information with you, you can open your new account at your convenience. Usually, your broker will ask you for some basic information including your name, address, your driver’s license number, and finally, your social security number. 

One point you need to keep in mind is that your new account should match your old one. For example, if you had an IRA account with your old broker, you should open an IRA account with your new broker. 

3. Initiate the Funding Process 🥉

Your new broker should help facilitate the funding process for you. On your end – you will need to fill out a transfer or ACAT form. Since the ACAT system allows automatic transfers, transferring your account should be really easy.

Couple at home using smartphone in front of laptop
The ACATS system is initiated when the new receiving firm has the client sign the appropriate transfer documents.

Most brokers will allow you to transfer your account from another financial institution from their website itself. You will need your account number and the name of the financial institution you are transferring from to start an ACAT transfer. 

After you fill out the form, you will simply need to wait while your new broker reaches out to your old broker to transfer your securities. If your old broker is making the transfer difficult, like Robinhood had during the GME debacle, you can reach out to the Federal Trade Commission and make a complaint.

4. Allow New Broker to Transfer your Securities 🎖️

Before your new broker can transfer your assets and securities, they will need to review what you will be transferring. A review is necessary because they need to check if all of your securities can be transferred in kind. 

Since certain items cannot be transferred, they need to ascertain that things are in order with your account. Only then can your new broker initiate the transfer process from your old broker. 

5. Operate your New Account 🏅

After you open an account with your new broker and initiate the transfer process – you will need to wait for a few days before accessing your new account. Usually, it takes 3-6 business days for the transfer to finish. 

It may take longer – but that is something that you will need to talk about with your new broker. Once the transfer is finished, you can start using the services of your new broker to trade or invest. 

ACAT Transfer Fees 🏷️

If you intend to transfer your account from one broker to another, chances are that your old broker will charge a transfer fee. Depending on the broker, the fees may range from $0 to $150. The average amount charged by most brokers is somewhere in the $75 ballpark. 

The costs of the transfer are a price you will have to pay – but your new broker may be willing to reimburse you the cost of the transfer somehow. Some brokers may have a reimbursement program in place, while others offer a cashback or free-trading bonus. 

Young man sitting in a cafe and smiling, reading about the 2 and 20 hedge fund fee structure
The account transfer fee, otherwise known as ACAT, is one of the brokerage’s fees that investors should be aware of.

There is also the possibility that your new broker may not offer a way for you to get your transfer fee back. In this scenario, you will have to bear the cost of the transfer. Since the transfer fees are a one-time payment, you may make your money back if your new broker charges less in commissions. 

Are ACAT Transfers Safe? 🔐

Transferring your securities through the ACAT system is a safe and easy process. To ensure that your account is transferred safely, your old broker and your new broker will make sure that a transfer has been initiated by you. When you make a transfer request, it is on your old broker to verify if you have made the request before initiating the transfer to your new broker.

To prevent an unauthorized transfer of your account, your old broker will match the information they receive from your new broker to the information they have on their database. If there is any discrepancy in your name or your Social Security number, then your old broker will reject the transfer request. In case the discrepancy was because of an error, then your new broker can correct the data and make the transfer request again. 

How to Make Sure Your ACAT Transfer is Quick 💨

When you transfer your securities from one broker to another using the ACAT system, it can take up to a week after the compilation of paperwork for the transfer process to be finished. You are merely changing the broker holding the assets or securities for you – there will be no change in the assets or securities you already own. 

While the process is fairly straightforward, the transfer process can be delayed by certain circumstances. There are a few reasons why your transfer may get delayed:

  • ☑️ You have used the wrong kind of transfer form.
  • ☑️ The transfer form has not been filled out correctly.
  • ☑️ The transfer form includes the instruction to liquidate your holdings.
  • ☑️ The transfer is from one type of account into another type of account.

To make sure that your transfer proceeds smoothly, make it a point to avoid the problems mentioned above. You must understand how ACAT transfers work and what securities you can or cannot transfer to make sure that your transfer to your new broker is completed as soon as possible. You can take the following steps to ensure prompt transfer of your securities:

1. Fill Out the Transfer Form Correctly ✍️

Delays usually occur because something is holding up the transfer. In many cases, the delay is due to your old broker rejecting the transfer because the information provided by your new broker does not match up with the information in their database. 

To prevent delays because of incorrect information, make sure that you fill out your transfer forms correctly. The account title, account type, tax ID, and Social Security number you put down on the transfer form should match with the information that your old broker has.

2. Ensure That All the Paperwork is Complete 📝

Other than the transfer forms, your old broker may also need additional paperwork. If your old broker requires a Medallion Guarantee or Signature Guarantee stamp, then make sure that you finish with the paperwork as soon as you can. If you do not get to the additional paperwork promptly, then there might be further delays in your account transfer. 

3. Monitor Your ACAT Transfer 🔎

Your old broker and your new broker must act to help facilitate the transfer – so you should monitor your transfer by staying in touch with both of them. After your new broker initiates the transfer, ask your old broker if they have received the transfer request. 

Make sure that there are no additional problems that can delay your transfer. If there is a delay, then get in touch with your old broker to check what the issue is – and then try to resolve it as soon as you can. 

Once the transfer process starts, you will have limited or no access to your funds. So you should make sure that there are no unexpected setbacks or delays. Remember that the transfer process will take anywhere from 3-6 business days after all the related paperwork is complete. A delay could mean missing out on the window of time when the stocks are on the rise – which happens very often.

Conclusion 🎬

So you have been looking to switch from your current broker to a new one – well, now you know all the pertinent facts. Congrats! 

The ACAT system has made switching brokers a relatively easy task. If you are unhappy with your current broker – either because of their lack of customer service or because they charge high commissions – then you can initiate the transfer to a new broker. The ACAT system is very efficient when it comes to the time as well as the costs associated with transfers. 

While the ACAT system makes switching brokers easy, you should remember that transferring your securities and assets from one broker to another can come with fees attached. Before you transfer your securities and assets, be absolutely certain that you want to switch brokers and make sure that you fill out the paperwork correctly. This will help the transfer process go forward without a hitch.

ACAT Transfer FAQs

  • What Kind of Accounts are Not ACAT Eligible?

    Certain financial institutions that do not participate in ACAT, and if you have an account with one such institution, then your transfer will not be ACAT eligible. Some of the institutions that do not participate in ACAT are banks, mutual funds, insurance companies, credit unions, and certain limited partnerships. 

  • If my Current Broker is not ACAT Eligible, what Should I Do?

    If your current broker is not ACAT eligible, then you will have to initiate a manual transfer if you want to move your account. You will need to fill out the proper transfer forms, and then wait for your account to be transferred to your new broker. Non-ACAT transfers can take longer than ACAT transfers - about 2 to 4 weeks. 

  • Can I Make Partial Transfers Using the ACAT?

    Yes, you can make partial transfers using the ACAT. Depending on what the policies of your new broker are, you will need to fill out the appropriate section of an account transfer form or a different transfer form. A partial transfer will take the same amount of time as a full transfer - that is, three to six business days. 

  • Can you ACAT Options?

    Yes, you can transfer options using ACAT as long as your new broker approves. You may need to apply for options trading with your new broker and be approved for it before they allow you to transfer options.

Choose Your Stock Broker

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Rating
Fees
Commissions

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$3 or $5/month

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$0 to open account

General
Best for

DIY stock trading

People who struggle to save

Highlight

Pioneer of commission-free stock trading

“Invest spare change” feature

Promotion

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Rating
Fees

Commissions

$0

$0

$3 or $5/month

Account minimum

$500

$0

$5 required to start investing

Minimum initial deposit

$0

$0

$0 to open account

General

Best for

Beginners and mutual fund investors

DIY stock trading

People who struggle to save

Highlight

Low fees

Pioneer of commission-free stock trading

“Invest spare change” feature

Promotion

Free stock

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on tokenist.com. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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