Ready to take control of your investments and potentially reduce your fees? Transferring your brokerage account from Edward Jones to Vanguard can be a smart move for many investors, especially those seeking a low-cost, index-fund-focused approach. This comprehensive guide will walk you through every step of the process, ensuring a smooth transition.
Let's dive in!
Step 1: Determine Your "Why" and Assess Your Current Edward Jones Holdings
Before you initiate any transfer, it's crucial to understand why you're making this change. Are you looking for lower expense ratios, a broader selection of index funds and ETFs, or a more hands-off approach to investing? Understanding your motivations will help you navigate the process effectively.
Sub-heading: Why Vanguard?
Vanguard is renowned for its low-cost index funds and ETFs, often offering some of the lowest expense ratios in the industry. As a client-owned company, its structure aligns with investors' interests, aiming to return profits to shareholders through lower costs. This can significantly impact your long-term returns, especially as your portfolio grows. Vanguard also offers a range of services, from self-directed investing to robo-advisors and even human financial advisors for larger balances.
Sub-heading: Reviewing Your Edward Jones Account
Grab your most recent Edward Jones account statement. You'll need this as a reference throughout the transfer. Pay close attention to:
- Account Type: Is it a taxable brokerage account (individual, joint, trust), an IRA (Traditional, Roth, SEP), or another type of retirement account (401k, 403b)? It's generally easiest to transfer "like-for-like" accounts (e.g., IRA to IRA).
- Holdings: List out all your investments: stocks, bonds, mutual funds, ETFs, CDs, etc.
- Proprietary Edward Jones Funds: Be aware that Edward Jones might have proprietary mutual funds or other investments that cannot be transferred in-kind (as-is) to Vanguard. These would need to be sold and transferred as cash, which could trigger tax implications.
- Restricted Securities: Are there any illiquid or privately held securities that might not be transferable?
- Outstanding Balances or Loans: Ensure there are no outstanding balances or loans against your account at Edward Jones, as this can delay or prevent a transfer.
- Edward Jones Fees: Edward Jones may charge a fee for transferring out your assets. It's wise to contact them directly or review their fee schedule to understand any potential charges.
Step 2: Open Your Vanguard Account (or Designate an Existing One)
This is where the magic begins! You'll need a Vanguard account to receive your assets.
Sub-heading: New to Vanguard?
If you don't already have a Vanguard account, this is your first step.
- Visit the Vanguard Website: Go to Vanguard's official website (Vanguard.com).
- Select "Open an Account": Look for a prominent button or link to open a new account.
- Choose Account Type: Select the account type that matches your Edward Jones account (e.g., "Brokerage Account," "Traditional IRA," "Roth IRA," etc.). Remember, like-for-like transfers are generally the smoothest.
- Complete Application: Fill out the online application. You'll need personal information, employment details, and potentially bank account information for initial funding (though the primary funding will come from your Edward Jones transfer).
- Review and Submit: Double-check all information for accuracy before submitting.
Sub-heading: Already a Vanguard Client?
If you're already a Vanguard client, you'll simply designate an existing account to receive the transfer.
- Log In to Your Vanguard Account: Access your existing Vanguard online account.
- Navigate to Transfers: Look for a section related to "Transfers" or "Move Money."
- Initiate an "External Account Transfer": Select the option to transfer assets from another firm.
Step 3: Initiate the Transfer Request from Vanguard
This is the most crucial step, as Vanguard will initiate the transfer on your behalf through the Automated Customer Account Transfer Service (ACATS). You generally do not need to contact Edward Jones to initiate the transfer.
Sub-heading: Providing Edward Jones Account Details
- Select Edward Jones as the Originating Firm: On Vanguard's transfer initiation page, you'll be prompted to select the firm you're transferring from. Choose "Edward Jones."
- Enter Edward Jones Account Information: You'll need your Edward Jones account number(s) and potentially your online access username and password to connect directly to their system (if Vanguard offers this electronic connection). Having a recent Edward Jones statement handy will ensure you have the correct account numbers.
- Choose "Full" or "Partial" Transfer:
- Full Transfer: This moves all transferable assets and closes your Edward Jones account. This is often the simplest option.
- Partial Transfer: This moves only specific assets or a certain amount of cash, leaving the Edward Jones account open. If you have proprietary Edward Jones funds that won't transfer in-kind, you might choose a partial transfer and then sell those funds separately.
- Specify "In-Kind" or "Cash" Transfer:
- In-Kind Transfer: This is generally preferred as it moves your existing investments (stocks, ETFs, eligible mutual funds) as-is, without selling them. This avoids potential capital gains taxes and keeps you invested in the market.
- Cash Transfer: Your investments at Edward Jones will be sold, and the cash proceeds will be transferred. This can trigger capital gains or losses and means you're out of the market during the transfer period.
- Review and Authorize: Carefully review all the details of your transfer request. You'll likely need to electronically sign or provide an e-signature to authorize Vanguard to initiate the transfer.
Step 4: Monitor the Transfer Progress
Once you've submitted the transfer request to Vanguard, the ACATS system takes over.
Sub-heading: What to Expect During the Transfer
- Vanguard's Role: Vanguard will send the transfer request to Edward Jones.
- Edward Jones's Role: Edward Jones will then validate the request, ensure all information matches, and prepare the assets for transfer. They have a few business days to respond.
- Timeline: Most ACATS transfers are completed within 5 to 7 business days from the time Vanguard submits the request. However, if paperwork is required or there are any discrepancies, it can take longer (sometimes 2-4 weeks or even more).
- Tracking: Vanguard typically provides an online status tracker for your transfer. Check this regularly for updates. You might also receive email notifications from Vanguard regarding the progress.
- Cost Basis Information: Your cost basis information (the original purchase price of your investments) should transfer automatically with your assets. However, it can sometimes take up to 30 days after the transfer is complete for this information to fully populate in your Vanguard account. It's a good idea to keep your Edward Jones statements for historical cost basis records.
Sub-heading: Potential Delays and How to Address Them
- Mismatched Information: Ensure the name, Social Security Number, and address on your Edward Jones account exactly match the information on your Vanguard account. Even a minor discrepancy can cause delays.
- Unclear Instructions: If you opted for a partial transfer, ensure your instructions were very clear on which assets to move.
- Proprietary Investments: As mentioned, Edward Jones's proprietary funds might not be transferable in-kind. These will either need to be sold (and transferred as cash) or remain at Edward Jones.
- Account Restrictions: If your Edward Jones account has any restrictions (e.g., pledged assets, pending transactions, or a hold), the transfer can be delayed or rejected.
- Transfer Fees: If Edward Jones charges a transfer-out fee, ensure you have sufficient cash in the account to cover it, or the transfer might be delayed.
If you encounter a delay or a rejection, contact Vanguard's transfer department first. They initiated the request and will have the most information about the reason for the holdup. They can then advise if you need to contact Edward Jones.
Step 5: Confirm Transfer Completion and Rebalance (If Necessary)
Once you receive confirmation from Vanguard that the transfer is complete, it's time for the final checks.
Sub-heading: Verify Your Holdings
- Check Your Vanguard Account: Log in and ensure all the assets you intended to transfer have arrived and are correctly reflected in your Vanguard account.
- Compare with Edward Jones Statement: Cross-reference your new Vanguard holdings with your last Edward Jones statement to ensure everything transferred as expected.
- Confirm Cost Basis: While it might take a few weeks, verify that your cost basis information is correctly loaded. This is crucial for tax reporting.
Sub-heading: Rebalance Your Portfolio
Now that your assets are at Vanguard, this is an excellent opportunity to:
- Review Your Investment Strategy: Does your current asset allocation still align with your financial goals and risk tolerance?
- Consolidate and Simplify: With your assets at Vanguard, you can leverage their low-cost ETFs and mutual funds to simplify your portfolio. Consider consolidating multiple individual stocks or high-cost mutual funds into broader market index funds or ETFs.
- Utilize Vanguard's Offerings: Explore Vanguard's extensive range of funds, including their target-date retirement funds, which offer a diversified, age-appropriate portfolio in a single fund.
10 Related FAQs:
How to check the status of my transfer? You can typically check the status of your transfer by logging into your Vanguard account and looking for a "Track Your Transfer" or "Transfer Status" link within your account details. Vanguard also often sends email updates.
How to avoid transfer fees from Edward Jones? Edward Jones may charge a fee to transfer assets out. Unfortunately, these fees are generally unavoidable from their end. However, some receiving brokers (like Vanguard) may offer to reimburse transfer fees for larger accounts. It's worth checking Vanguard's current policy or asking their customer service.
How to transfer only a portion of my Edward Jones account? When initiating the transfer with Vanguard, you will have the option to select a "partial transfer" and specify which assets or how much cash you wish to move.
How to transfer Edward Jones proprietary mutual funds? Edward Jones's proprietary mutual funds often cannot be transferred in-kind to Vanguard. You will likely need to sell these funds within your Edward Jones account and then transfer the proceeds as cash. Be mindful of potential capital gains taxes if you sell appreciated assets.
How to ensure my cost basis transfers correctly? In most ACATS transfers, the cost basis information should transfer automatically. However, it's always a good practice to keep detailed records (e.g., Edward Jones statements) of your original purchase prices. If the cost basis doesn't appear after a few weeks, contact Vanguard's customer service.
How to transfer an inherited Edward Jones IRA? Transferring an inherited IRA has specific rules. It's best to contact Vanguard's retirement specialists directly to ensure you follow the correct procedures for an inherited IRA rollover or transfer to avoid any tax implications.
How to transfer from Edward Jones if I have a financial advisor there? While you can initiate the transfer yourself, it's often a courtesy to inform your Edward Jones financial advisor of your decision to transfer your account. They may try to retain your business, but ultimately, the choice is yours.
How to handle unsettled trades during a transfer? It's best to avoid making any new trades in your Edward Jones account once you initiate the transfer. Unsettled trades can delay the transfer process significantly.
How to transfer a joint account from Edward Jones to Vanguard? Ensure the exact names and Social Security numbers of all account holders on the Edward Jones joint account precisely match the joint account at Vanguard. Any discrepancies can lead to delays.
How to consolidate multiple Edward Jones accounts into one Vanguard account? Yes, you can consolidate multiple Edward Jones accounts (of the same account type, e.g., two IRAs) into a single Vanguard account. When initiating the transfer with Vanguard, simply provide the details for all the Edward Jones accounts you wish to transfer.
