Yes, you can transfer your individual brokerage account to another broker without selling your stocks. This is done through a standardized industry process called an Automated Customer Account Transfer Service (ACATS) transfer.
How a direct transfer keeps your investments intact
When you initiate an ACATS transfer, your stocks, exchange-traded funds (ETFs), and options move directly from your old brokerage firm to your new one. Your investments remain completely intact during the move, meaning you do not have to liquidate your portfolio or cash out your positions. Because you are not selling your shares, this process is completely tax-free and will not trigger any capital gains taxes.
The mechanism behind this is simple. Your new broker coordinates directly with your old broker behind the scenes. They transfer the registration of your shares electronically. During this time, which typically takes three to six business days, your account will be temporarily frozen. You will not be able to buy or sell shares while the assets are in transit, but your investments will continue to fluctuate with the stock market as usual.
Step-by-step guide to moving your account
To ensure your stocks transfer smoothly without any errors, follow this sequence.
- Open the new account first. Set up an identical account type at your new brokerage firm. If your current account is an individual taxable brokerage account, your new one must also be an individual taxable brokerage account.
- Gather your latest statement. Download your most recent monthly statement from your current broker. Your new broker will need your exact account number and the clearing number of your current firm.
- Initiate the transfer request. Log into your new broker account and find their account transfer section. Enter your information and upload your statement to start the ACATS process.
- Monitor the cost basis. After your stocks arrive, it can take an extra week or two for your old broker to send your cost basis data. Check your new account to make sure the original price you paid for the stocks updates correctly.
The fractional share trap that creates unexpected sales
While your whole shares of stock will transfer perfectly, fractional shares cannot travel through the ACATS system. If you own 10.5 shares of a stock, the 10 whole shares will move over to your new broker safely, but the 0.5 fractional share will be automatically sold off by your old broker.
The cash from that tiny sale will sit in your old account for a few days before being swept over to your new broker as cash. While this is normal, it does mean you will technically experience a taxable event for that tiny fraction of a share. Additionally, you should check the fee schedule of your current broker. Many firms charge an account closure or outbound transfer fee ranging from 50 to 100 dollars. Many major new brokers will reimburse this fee if you ask them nicely, but you usually have to submit proof of the charge after the transfer finishes.