So, you're ready to make a move in your investment journey, shifting your hard-earned stocks from E*TRADE to Schwab? That's a significant step, and we're here to guide you through it, making what might seem like a complex process feel smooth and straightforward. Let's get started!
Moving Your Investments: A Step-by-Step Guide from E*TRADE to Schwab
Transferring your brokerage account, or even just a portion of it, is a common occurrence. Whether you're seeking Schwab's diverse offerings, their robust research tools, or simply consolidating your financial life, understanding the process is key. The good news is that most brokerage transfers are handled electronically via a system called ACATS (Automated Customer Account Transfer Service), designed to make this as seamless as possible.
Let's dive in!
Step 1: Are You Ready to Make the Leap? Prepare for Your Transfer!
Before you even think about hitting that "transfer" button, let's take a moment to prepare the ground. This initial preparation can save you a lot of headaches and potential delays down the line.
Sub-heading: Confirm Your "Why" and "What"
Why Schwab? Take a moment to reaffirm your reasons for moving. Is it Schwab's reputation, specific investment products, lower fees, or enhanced customer service? Knowing your motivation will keep you focused throughout the process.
What are you moving? Are you transferring your entire ETRADE account* (a "full transfer") or just specific securities and cash (a "partial transfer")? Be clear about this. A full transfer is often simpler as it involves moving everything as is.
Sub-heading: Account Alignment and Information Gathering
This is where the nitty-gritty begins. You need to ensure that your existing E*TRADE account and your new Schwab account are perfectly aligned.
Matching Account Types: This is crucial.
An individual brokerage account at E*TRADE should transfer to an individual brokerage account at Schwab.
An IRA (Traditional, Roth, SEP) at E*TRADE must transfer to the same type of IRA at Schwab.
Joint accounts should transfer to joint accounts.
Trust accounts to trust accounts, and so on. Mismatched account types are a common reason for transfer delays or rejections. If you don't have a Schwab account yet, this is the time to open one, ensuring it matches your E*TRADE account type.
Gather Essential Information: Have the following details readily available:
Your ETRADE account number(s)*: This is the account you're moving from.
Your Schwab account number(s): This is the account you're moving to. If you haven't opened one, do so now!
Account registration details: Ensure the name(s) on both accounts, including spelling, Social Security Number (SSN) or Taxpayer Identification Number (TIN), and address, match exactly. Even a slight discrepancy can cause a hold-up.
Recent ETRADE statement*: This will provide you with all the necessary account details, including your holdings. It's helpful to have this in front of you.
Sub-heading: Tidy Up Your E*TRADE Account
Think of this as decluttering before a move. A clean account minimizes potential issues.
Settle Outstanding Balances/Fees: Any negative cash balances or outstanding fees at E*TRADE must be resolved before the transfer can proceed. Pay them off!
Address Margin Loans: If you have any margin loans against your securities at E*TRADE, you'll need to either pay them off or ensure Schwab is willing to accept the margin debt. Discuss this with Schwab beforehand.
Check for Non-Transferable Assets: Not all assets can be transferred in-kind (meaning, as they are).
Proprietary investments: Some mutual funds or specific products offered exclusively by E*TRADE may not be transferable to Schwab. These would typically need to be sold (liquidated) before the transfer, and the cash proceeds moved. Be aware of potential tax implications if you sell assets in a taxable account.
Fractional Shares: Generally, fractional shares do not transfer via ACATS. E*TRADE will typically liquidate (sell) any fractional shares you hold, and the cash equivalent will be transferred to Schwab as part of a "residual sweep" after the main transfer is complete.
Options contracts: While some options may transfer, complex or illiquid options might not. It's best to discuss this with Schwab.
Limited Partnerships (LPs) or illiquid securities: These often cannot be transferred via ACATS and may require special handling or liquidation.
Disable Automated Features: Consider disabling features like automated investments, dividend reinvestment plans (DRIPs), or bill pay with E*TRADE to prevent activity that might interfere with the transfer. You can re-establish these at Schwab later.
Step 2: Initiate the Transfer with Schwab – The Receiving Firm
This is where you officially begin the transfer process. Remember, the receiving firm (Schwab in this case) initiates the ACATS transfer on your behalf.
Sub-heading: Log In and Find the Transfer Section
Access Your Schwab Account: Log in to your Charles Schwab account online.
Navigate to "Move Money" or "Transfer Account": Most brokerage websites have a clear section dedicated to moving money or transferring accounts. Look for terms like "Transfers & Payments," "Move Money," or "Transfer an Account."
Sub-heading: Start the Account Transfer Request
Select "Transfer an Account from Another Firm": You'll typically be prompted to specify that you're transferring an account into Schwab.
Identify ETRADE as the "Delivering Firm": You'll need to select ETRADE (or Morgan Stanley, as E*TRADE is now part of Morgan Stanley) from a list of financial institutions.
Choose Your Account Type: Select the type of account you're transferring (e.g., Individual Brokerage, Traditional IRA, Roth IRA).
Enter Your ETRADE Account Number*: Provide the account number you gathered in Step 1.
Select the Schwab Receiving Account: Choose the Schwab account where you want your assets to be transferred. Again, ensure the account types match.
Sub-heading: Full vs. Partial Transfer & Authorization
Specify Transfer Type: You'll be given the option to perform a "Full Transfer" (transferring all assets and closing the E*TRADE account) or a "Partial Transfer" (transferring only specific assets). For most users, a full transfer is recommended if you intend to move all your investments.
If Partial Transfer: You will then need to list the specific securities (stock symbols and quantities) and cash amounts you wish to transfer. Be precise!
Review and Authorize: Carefully review all the information you've entered. Any errors here can cause significant delays. You'll then be asked to electronically sign or provide consent to authorize Schwab to initiate the transfer on your behalf. This authorization allows Schwab to request your assets from E*TRADE.
Upload Supporting Documents (If Required): In some cases, especially for trust accounts or if there are name discrepancies, Schwab might request additional documents like a recent E*TRADE statement, trust documents, or a letter of authorization. Be prepared to upload these securely.
Step 3: The Waiting Game – What Happens Behind the Scenes
Once you've submitted your transfer request to Schwab, the ACATS process kicks in. This is where the two financial institutions communicate and facilitate the transfer.
Sub-heading: The ACATS Process Timeline
Initiation and Review (1-3 Business Days): Schwab submits your transfer request through the ACATS system to ETRADE. ETRADE then has a few business days to review the request and either validate it or take exception (reject it) if there are discrepancies or issues (like outstanding balances, mismatched names, or non-transferable assets).
Transfer Execution (3-6 Business Days): If ETRADE validates the request, the actual transfer of securities and cash takes place. During this time, your investments might appear in a "transfer pending" status at both firms. It's normal for your account at ETRADE to show a zero balance temporarily, and your Schwab account to show the incoming assets as pending.
Settlement and Residual Sweep (Additional Days): After the primary transfer, there's often a "residual sweep" to catch any dividends, interest, or cash from liquidated fractional shares that might have accumulated during the transfer period. This can take a few extra days.
Overall Timeline: A full ACATS transfer typically takes 5 to 10 business days from initiation to completion. However, complex transfers, accounts with issues, or manual transfers can take longer, sometimes up to several weeks.
Sub-heading: Monitoring Your Transfer
Schwab's Transfer Tracker: Charles Schwab often provides an online transfer tracker or status updates within your account, allowing you to monitor the progress of your transfer. Utilize this feature!
Communication is Key: If the transfer seems delayed or you receive an exception notice, contact Schwab first. Since they initiated the transfer, they are best equipped to tell you why it's stalled and what action is needed. They will often communicate with E*TRADE on your behalf.
Step 4: Verify and Organize Your New Schwab Account
Congratulations! Your assets should now be safely nestled in your Schwab account. But the process isn't quite over.
Sub-heading: Confirm Accuracy
Compare Holdings: Log into your Schwab account and meticulously compare the holdings against your last E*TRADE statement. Ensure all your stocks, ETFs, mutual funds, and cash have arrived, and that the quantities are correct.
Verify Cost Basis: This is extremely important for tax purposes. While brokerages are required to transfer cost basis information, sometimes there can be delays or inaccuracies, especially for older investments. Check that the cost basis information for all your transferred securities is correct in your Schwab account. If it's missing or incorrect, contact Schwab immediately. You may need to provide old statements from E*TRADE.
Check for Residual Cash: Look for any small cash amounts that might have come through in a "residual sweep" from liquidated fractional shares or accrued dividends.
Sub-heading: Set Up Your New Financial Hub
Re-establish Automated Features: Set up any automated investments, dividend reinvestment plans (DRIPs), or other recurring transfers you had at E*TRADE.
Explore Schwab's Tools: Take the time to familiarize yourself with Schwab's trading platform, research tools, and other features. This is your new investment home!
Update Beneficiaries: Review and update your beneficiaries for your Schwab accounts, especially for IRAs and other retirement accounts.
Shred Old Statements (Carefully): Once you're absolutely certain everything has transferred correctly and your cost basis is accurate, you can safely dispose of your old E*TRADE statements and confirmations. Keep digital records or shred physical ones securely.
10 Related FAQ Questions (How to...)
Here are some quick answers to common questions about transferring stocks:
How to find my E*TRADE account number?
You can find your ETRADE account number on your account statements, trade confirmations, or by logging into your ETRADE online account and navigating to your account summary.
How to find my Schwab account number?
Your Schwab account number will be on your new account opening documents, account statements, or readily available when you log into your Schwab online account.
How to check the status of my stock transfer to Schwab?
Log into your Schwab online account and look for a "Transfer Tracker" or "Account Transfer Status" section, usually found under "Move Money" or "My Accounts."
How to avoid delays when transferring stocks?
Ensure all account information (name, address, SSN/TIN) matches exactly between ETRADE and Schwab, resolve any outstanding balances or fees at ETRADE, and confirm that all assets are transferable in-kind.
How to transfer an IRA from E*TRADE to Schwab?
Follow the same steps as a regular brokerage transfer, ensuring the account types match (e.g., E*TRADE Traditional IRA to Schwab Traditional IRA). This is typically an "in-kind" transfer, which avoids tax implications.
How to transfer fractional shares from E*TRADE to Schwab?
Fractional shares generally do not transfer via ACATS. E*TRADE will typically liquidate (sell) them, and the cash proceeds will be transferred to Schwab as a residual sweep after the main transfer.
How to deal with non-transferable securities?
Non-transferable securities (like proprietary mutual funds) will need to be liquidated at E*TRADE before the transfer. The cash will then be included in your transfer. Be mindful of potential tax consequences if in a taxable account.
How to check if Schwab will reimburse E*TRADE transfer fees?
Contact Schwab directly before initiating the transfer. Many brokerage firms offer to reimburse transfer fees from your previous brokerage if your transferred assets meet a certain minimum value. E*TRADE charges an outgoing full account transfer fee of $75. Schwab does not charge for incoming account transfers.
How to ensure my cost basis transfers correctly to Schwab?
While the ACATS system is designed to transfer cost basis, it's crucial to verify it in your Schwab account after the transfer. If it's missing or incorrect, contact Schwab's customer service and be prepared to provide E*TRADE statements as proof.
How to contact Schwab or E*TRADE for transfer assistance?
For Schwab, you can typically find their customer service numbers on their "Contact Us" page or within your online account. For E*TRADE, similarly, check their website for customer service contact details. It's generally recommended to work with Schwab's transfer team as they initiate the process.
