Ready to make a big move with your investments? Transferring your assets from Charles Schwab to Fidelity can seem like a daunting task, but with a clear, step-by-step guide, it's a process that can be managed smoothly and efficiently. Let's get started on your journey to a new investment home!
Moving Your Investments from Charles Schwab to Fidelity: A Comprehensive Guide
Moving your investment accounts between brokerage firms, especially large ones like Schwab and Fidelity, is typically done through a process called an Automated Customer Account Transfer (ACAT). This method is generally preferred as it allows you to transfer your investments "in kind" – meaning you don't have to sell all your holdings at Schwab, transfer the cash, and then re-buy them at Fidelity. This can help you avoid potential tax implications and maintain your existing portfolio allocation.
Step 1: Determine Your "Why" and Prepare Mentally
Before diving into the nitty-gritty, take a moment to consider why you're making this move. Are you looking for lower fees, different investment options, better customer service, or simply consolidating your accounts? Understanding your motivation will help you stay focused throughout the process.
Self-Reflection: What are your primary reasons for switching? Write them down! This helps in clarifying your goals with Fidelity.
Research Fidelity: Familiarize yourself with Fidelity's platform, tools, and offerings. Ensure it aligns with your investment strategy and needs.
Manage Expectations: While an ACAT transfer is generally smooth, there can be minor hiccups or delays. Patience is key!
Step 2: Open Your New Fidelity Account(s)
This is a crucial first step, as you need a destination for your Schwab assets.
Matching Account Types is Paramount: When opening your Fidelity account(s), ensure the account type exactly matches the account type you're transferring from Schwab.
Examples:
Schwab Traditional IRA Fidelity Traditional IRA
Schwab Roth IRA Fidelity Roth IRA
Schwab Individual Brokerage Fidelity Individual Brokerage
Schwab Joint Brokerage Fidelity Joint Brokerage
Important Note: If you're transferring an inherited IRA, you'll need to work with your current firm (Schwab) to place them in an Inherited IRA before transferring them to Fidelity.
Online Account Opening: Fidelity offers a streamlined online account opening process. Have your personal identification documents (driver's license, Social Security Number), current contact information, and bank details ready.
Consider New Accounts: If you're looking to consolidate or diversify your investment strategy, you might choose to open entirely new account types at Fidelity (e.g., if you only had a taxable account at Schwab, but want to open an IRA at Fidelity). In this case, you'd transfer cash after selling assets at Schwab.
Step 3: Gather Necessary Documentation from Schwab
Fidelity will typically initiate the transfer, but you'll need to provide them with accurate information from your Schwab account.
Most Recent Statement: Obtain your most recent account statement from Charles Schwab. This statement will contain crucial information such as:
Your Schwab account number(s)
The exact account type(s)
A list of your current investments (securities, mutual funds, ETFs, etc.)
Tip: A digital statement downloaded from your Schwab account is often sufficient and easier to share.
Cost Basis Information: For taxable accounts, your statements should detail the cost basis (original value) of your investments. While ACAT transfers generally include cost basis, it's always a good idea to keep a record of this information yourself. This is critical for accurate tax reporting when you eventually sell investments.
Confirm No Pending Activity: Ensure there are no outstanding trades, deposits, or withdrawals pending in your Schwab account. This can delay the transfer.
Step 4: Initiate the Transfer with Fidelity (The ACAT Process)
This is where Fidelity takes the lead. They want your business and will generally make the process as easy as possible.
Contact Fidelity: The most common way to start is by initiating the transfer directly through Fidelity's website or by calling their customer support.
Complete the Transfer Form: You'll typically fill out an online transfer form (often referred to as an ACAT form or Transfer of Assets - TOA form) on Fidelity's platform.
You will be asked to provide details about your Schwab account, including the account number and whether it's a full or partial transfer.
Full Transfer: This moves all assets and typically closes your Schwab account.
Partial Transfer: This allows you to transfer specific assets or a portion of your account, leaving a balance at Schwab.
Upload Supporting Documents: Fidelity may request you upload copies of your Schwab statement or other identifying documents to verify your ownership and account details.
Review and Authorize: Carefully review all the information you've provided before submitting the request. You'll likely need to provide an electronic signature to authorize the transfer.
Step 5: Understand Potential Fees and Tax Implications
While ACAT transfers are largely tax-neutral for in-kind transfers, it's important to be aware of potential costs.
Schwab's Outgoing Transfer Fees: Charles Schwab may charge a fee for a full account transfer (e.g., $50). This fee is often deducted from the account being transferred.
Fidelity's Incoming Transfer Fees: Fidelity generally does not charge incoming transfer fees.
Investment-Specific Fees: Certain investments, like specific mutual funds not offered by Fidelity, might need to be sold, potentially incurring transaction fees or short-term trading fees if held for less than 30-90 days.
Tax-Advantaged Accounts: For IRAs and other retirement accounts, a direct ACAT transfer ensures you won't incur any unexpected tax penalties or early withdrawal penalties, as long as the account types match.
Consider Selling Certain Assets: If you hold obscure mutual funds or highly illiquid investments at Schwab that Fidelity doesn't support, you might need to sell them first and transfer the cash. Consult with Fidelity before initiating the transfer if you have unique holdings.
Step 6: Monitor and Track Your Transfer
Once you've submitted the transfer request, it's a waiting game.
Fidelity's Tracking Tools: Fidelity usually provides online tools or a timeline to track the status of your transfer.
Typical Timeline: Most ACAT transfers are completed within 3 to 7 business days. However, certain investments or complex transfers can take longer (sometimes up to two weeks or more).
Communication is Key: If you notice a delay beyond the estimated timeframe, contact Fidelity's customer service first, as they are the initiating broker and handle the communication with Schwab.
Avoid Trading: It's generally advised to avoid making any trades within your Schwab account once the transfer process has begun. This can complicate or delay the transfer.
Step 7: Verify Assets in Your Fidelity Account
Once the transfer is marked as complete, it's time for thorough verification.
Cross-Reference: Compare the assets and their quantities in your new Fidelity account against your final Schwab statement. Ensure everything has transferred correctly.
Cost Basis Accuracy: For taxable accounts, confirm that the cost basis information for your transferred investments is accurately reflected in your Fidelity account. If it's missing or incorrect, contact Fidelity immediately to rectify it. This is crucial for calculating capital gains/losses when you eventually sell.
Dividend Reinvestment: Check your dividend reinvestment settings at Fidelity to ensure they align with your preferences.
Link Bank Accounts: Once your Fidelity account is fully set up and funded, link your external bank accounts for easy future deposits and withdrawals.
Step 8: Decide on Your Schwab Account
After a successful transfer, you have a couple of options for your Schwab account.
Full Transfer & Automatic Closure: If you initiated a full transfer, Schwab's system will typically close the account automatically once all assets are moved and any outstanding fees are settled.
Partial Transfer & Keeping Schwab Account: If you performed a partial transfer, your Schwab account will remain open. You can choose to keep it for specific purposes or proceed to close it manually.
Manual Closure (if necessary): If you wish to fully close your Schwab account after a partial transfer or if it wasn't automatically closed, you'll need to:
Ensure the balance is zero (transfer any remaining cash out).
Contact Schwab customer service to formally request account closure.
Confirm there are no pending transactions or remaining holdings.
Note: Schwab generally doesn't charge inactivity or account fees, so there's no inherent penalty for keeping a zero-balance account open.
Frequently Asked Questions (FAQs)
Here are 10 common questions about moving investments from Schwab to Fidelity, with quick answers:
How to Initiate the Transfer Process?
You initiate the transfer directly with Fidelity, typically by filling out an online "Transfer of Assets" form on their website or by contacting their customer service.
How to Know if My Account Types are Compatible?
Ensure the account types match exactly (e.g., Traditional IRA to Traditional IRA, Individual Brokerage to Individual Brokerage). Fidelity will guide you on compatible account types during the setup.
How to Transfer My Investments "In Kind"?
The ACAT (Automated Customer Account Transfer) system allows you to transfer most stocks, ETFs, and mutual funds "as is" without selling them, preserving your cost basis and avoiding immediate tax implications.
How to Find My Schwab Account Number for the Transfer?
Your Schwab account number can be found on your most recent account statement or by logging into your Schwab online account.
How to Handle Mutual Funds Not Offered by Fidelity?
If you have mutual funds at Schwab that Fidelity doesn't offer, you will likely need to sell them before the transfer, and the cash proceeds will then be transferred to Fidelity.
How to Track the Progress of My Transfer?
Fidelity provides online tools and a status tracker where you can monitor the progress of your transfer request. You can also call their customer service for updates.
How to Deal with Potential Transfer Fees?
Charles Schwab may charge an outgoing transfer fee (e.g., $50 for a full transfer). Fidelity typically does not charge incoming transfer fees. Be aware that these fees might be deducted from your transferred assets.
How to Ensure My Cost Basis Transfers Correctly?
For taxable accounts, the cost basis should transfer automatically via the ACAT system. However, it's crucial to verify it once the assets arrive at Fidelity and contact them if any discrepancies exist.
How to Close My Schwab Account After the Transfer?
If it was a full ACAT transfer, Schwab will usually close the account automatically. If not, or if it was a partial transfer, you may need to contact Schwab customer service directly to formally close the account after all assets and cash have been moved.
How to Get Help if I Encounter Issues During the Transfer?
Your first point of contact should always be Fidelity's customer service, as they are the initiating broker and will communicate with Schwab on your behalf to resolve any transfer issues.
