Stock brokerage account types
In an effort to help investors better understand the account transfer process, we are issuing this educational information to provide some basic facts about the account transfer process.
Most customer accounts are transferred between broker-dealers through an automated process. Transfers involving the most common assets, for example, cash, stocks and bonds of domestic companies, and listed options, are readily transferable through ACATS. Individuals wanting to transfer their securities account from one broker-dealer to another initiate the process by completing a Transfer Initiation Form TIF and sending it to the firm to which they want to transfer their account.
The firm a customer is transferring the account to can provide the form to facilitate the transfer. The new firm is called the "receiving firm. Although automated, the account transfer process is somewhat complicated and is impacted by certain factors and regulations, the most important of which are discussed below. Once the receiving firm obtains the TIF, it enters certain customer data, including the name on the account, Social Security number, and account number at the delivering firm into ACATS.
Shortly after the data is entered, an automated function permits the delivering firm to see that a request to transfer the account has been made. If the account request is rejected, the new firm may correct the data from that which it originally entered or it may have to contact the customer to make sure the information on the TIF form is correct. Once the customer account information matches, the transfer request is considered to be validated.
In most cases, the validation process will take about three business days to complete once the new firm enters the request into ACATS. Once the transfer request is validated, the delivering firm will send a list of the assets in the account to the receiving firm via ACATS.
The receiving firm will review the list of assets to decide whether it wishes to accept the transfer of the account. It is important for investors to recognize that broker-dealers are not required to open or accept the transfer of an account and can decide which investments they choose to accept. In this regard, a customer might initiate a transfer request only to find that the new firm has declined to accept the account. For example, the new firm may decide not to accept the account due to the quality of securities supporting a margin loan, or because the account does not meet its minimum equity requirements.
Once the customer account information is properly matched, and the receiving firm decides to accept the account, the delivering firm will take approximately three days to move the assets to the new firm.
This is called the delivery process. In total, the validation process and delivery process generally take about six days to complete. Factors that may result in additional time needed to transfer an account. Generally, transfers where the delivering entity is not a broker-dealer for example a bank, mutual fund, or credit union will take more time.
The tax rate depends largely on your income and how long you hold the investment. Trying to find the fastest road to riches could put your hard-earned savings at risk just as quickly. Particularly when making a shorter-term investment—less than 7—10 years, for example—you'll want to choose the combination of bonds and stocks that strikes the right balance between risk and reward.
Some investments have obvious costs—like trading commissions and service fees. But keep a keen eye on expense ratios too. While they don't show up on your statement as a debit, they can take a serious bite out of your savings.
It's easy to open joint accounts and individual accounts online, and it takes just a few minutes. You can choose an individual account in your name only or a joint account with multiple equal owners , or you can open other types of taxable accounts. You'll also be asked to provide your name, the name of any joint account owners, or the name of your organization, along with:. You can also complement your portfolio with funds and ETFs from hundreds of other companies, as well as individual stocks, CDs, and bonds.
If it's coming from your bank, provide your bank account and routing numbers for an electronic transfer or your bank name and wire date for a wire transfer. You can either electronically sign your application or print, sign, and mail the form to us.
Once your account is set up, there are a few things you can do to control your costs and make your investments easier to manage. The annual operating expenses of a mutual fund or ETF exchange-traded fund , expressed as a percentage of the fund's average net assets.
It's calculated annually and removed from the fund's earnings before they're distributed to investors, directly reducing investors' returns. An expense ratio includes management, administrative, marketing, and distribution fees.
It doesn't include trading or sales commissions, loads, or purchase or redemption fees. Guardian accounts , which are administered by a court-appointed guardian or conservator. Trust accounts , which hold assets held in a personal or retirement trust. This includes trusts created by a will. Estate and other organization accounts , which are owned by an entity versus an individual person. This includes accounts held by corporations, partnerships, professional associations, endowments, foundations, and other organizations.
Details are provided in each fund profile. Industry average expense ratio: All averages are asset-weighted. Industry averages exclude Vanguard. Vanguard and Morningstar, Inc. You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services we offer them commission-free or through another broker which may charge commissions.
See the Vanguard Brokerage Services commission and fee schedules for limits. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value. Investments in Target Retirement Funds are subject to the risks of their underlying funds.
The year in the fund name refers to the approximate year the target date when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date.