Are you ready to take control of your Roth IRA and move it to a platform that better suits your investment goals? Transferring your Roth IRA from Edward Jones to Fidelity can be a smart move for many investors, offering a wider range of investment options, potentially lower fees, and robust online tools. This guide will walk you through every step of the process, ensuring a smooth and successful transfer.
Understanding Your Roth IRA Transfer
Before we dive into the "how-to," let's quickly review what a Roth IRA is and why you might consider moving it. A Roth IRA is a retirement savings account funded with after-tax dollars, meaning your withdrawals in retirement are tax-free, provided certain conditions are met. Transferring it involves moving these assets from one custodian (Edward Jones) to another (Fidelity) without incurring taxes or penalties, as long as it's done correctly.
Step 1: Assess Your Current Edward Jones Roth IRA
First things first, let's get a clear picture of what you're working with at Edward Jones. This initial assessment is crucial for a smooth transfer.
Sub-heading: Gather Essential Information
- Account Statements: Locate your most recent Edward Jones Roth IRA statement. This document will contain vital information such as your account number, the types of investments you hold, and their current market value.
- Investment Holdings: Make a detailed list of all your investments within the Roth IRA. This includes mutual funds, ETFs, stocks, bonds, and any other securities. Note down their ticker symbols and the number of shares you own.
- Edward Jones Fees: Familiarize yourself with any potential transfer or termination fees Edward Jones might charge. While some custodians waive these fees for larger accounts, it's essential to be aware. Edward Jones charges a total transfer or termination fee, which was $95 as of April 1, 2023. They also have an annual IRA fee, which was $75 as of April 1, 2023, but this might be waived if the account has been open for at least 24 months.
Sub-heading: Consider "In-Kind" vs. "Liquidation" Transfers
When transferring your Roth IRA, you generally have two options:
- In-Kind Transfer: This means your existing investments are transferred as is from Edward Jones to Fidelity. This is often preferred if you're happy with your current investment allocation and want to avoid selling and rebuying. However, not all investments are transferable in-kind. Proprietary mutual funds offered exclusively by Edward Jones, for example, cannot be held by other firms and will likely need to be liquidated.
- Liquidation (Cash) Transfer: In this scenario, Edward Jones sells all your investments, and the cash proceeds are transferred to Fidelity. You would then reinvest this cash into new holdings at Fidelity. This might be necessary if your Edward Jones investments aren't transferable or if you wish to completely rebalance your portfolio.
Step 2: Open Your New Fidelity Roth IRA Account
Now that you know what you're transferring, it's time to set up your new home for your Roth IRA at Fidelity.
Sub-heading: Online Application or In-Person Assistance
- Online: Fidelity offers a straightforward online application process for opening a Roth IRA. You'll typically need to provide personal information like your Social Security number, address, and employment details.
- Phone or Branch: If you prefer, you can call Fidelity's customer service or visit a local branch for assistance with opening your account.
Sub-heading: Choose Your Account Type
Ensure you select a Roth IRA when opening your new account. Fidelity offers various types of accounts, so double-check you're opening the correct one for your retirement savings.
Step 3: Initiate the Transfer from Fidelity's Side
This is a critical step, as Fidelity will typically initiate the Automated Customer Account Transfer Service (ACATS) to pull your assets from Edward Jones. This is generally the easiest and safest way to transfer your Roth IRA.
Sub-heading: Fill Out the Transfer Form
- Fidelity's Transfer Form: You'll need to complete Fidelity's "Transfer an Account" form. This form authorizes Fidelity to request your assets from Edward Jones.
- Information Required: Be prepared to provide your Edward Jones Roth IRA account number and include a copy of your most recent Edward Jones statement. Accuracy is key here – even a small error can delay the transfer.
Sub-heading: Specify Transfer Details
- Full vs. Partial Transfer: Indicate whether you want to transfer your entire Roth IRA account or only a portion of it.
- In-Kind or Cash: Specify whether you want an in-kind transfer or if you want Edward Jones to liquidate your holdings into cash before transferring. Remember, if you have proprietary Edward Jones funds, they will likely need to be liquidated.
Step 4: Monitor the Transfer Process
Once you've submitted the transfer request to Fidelity, the waiting game begins. It's important to monitor the progress and be prepared to respond to any requests for additional information.
Sub-heading: Timeline Expectations
- Typical Duration: Most Roth IRA transfers via ACATS can take 3 to 5 weeks to complete once Fidelity receives your paperwork and deems it "in good order."
- Faster Transfers: If you are transferring assets in full and they are easily transferable (e.g., cash or widely held securities), the process may take less time.
- Potential Delays: Transfers involving foreign securities, limited partnerships, or proprietary mutual funds can take longer. Fidelity will contact you if additional information is needed.
Sub-heading: Communication is Key
- Check Your Fidelity Account: Regularly log into your new Fidelity account to check the status of your transfer.
- Contact Edward Jones (if needed): While Fidelity typically handles the communication, if you notice significant delays, you may want to contact Edward Jones to confirm they have received the transfer request from Fidelity and are processing it.
- Keep Records: Save copies of all documents related to your transfer, including the transfer forms, account statements, and any correspondence.
Step 5: Reinvest Your Assets (if applicable)
If your assets were transferred as cash, or if some of your investments were liquidated, this is the exciting part: reinvesting at Fidelity!
Sub-heading: Explore Fidelity's Investment Options
- Mutual Funds & ETFs: Fidelity offers a vast selection of commission-free ETFs and a wide range of mutual funds, including their own low-cost index funds.
- Stocks & Bonds: You'll have access to a broad market for individual stocks and bonds.
- Research Tools: Take advantage of Fidelity's comprehensive research tools and resources to help you make informed investment decisions that align with your financial goals and risk tolerance.
Sub-heading: Consider Your Financial Goals
- Diversification: Ensure your new portfolio is well-diversified across different asset classes.
- Risk Tolerance: Reassess your risk tolerance and adjust your investments accordingly.
- Long-Term Strategy: Remember that a Roth IRA is for long-term retirement savings. Focus on a strategy that will help you achieve your goals over decades.
Step 6: Confirm the Transfer is Complete
Once the transfer is showing as complete in your Fidelity account, and you've confirmed all your assets are accounted for, it's time to take a deep breath and celebrate!
Sub-heading: Verify All Holdings
- Cross-reference the investments in your Fidelity account with the list you made from your Edward Jones statement.
- Cost Basis Information: It can take up to 15 calendar days after the transfer settles for the cost basis information to be sent from Edward Jones to Fidelity. Don't be alarmed if this isn't immediately visible.
Sub-heading: Close Your Edward Jones Account (Optional)
If you transferred your entire Roth IRA, you might want to officially close your Edward Jones account to avoid any lingering fees or statements. Contact Edward Jones directly to confirm the closure process.
Important Considerations During the Transfer
- No Taxable Event: A direct transfer of a Roth IRA from one custodian to another is generally not a taxable event and does not need to be reported to the IRS. This is different from a "rollover" (which typically applies to employer-sponsored plans like 401(k)s) or a "conversion" (moving a Traditional IRA to a Roth IRA, which can be a taxable event).
- Stay Invested: While the transfer is in progress, your assets might be temporarily unavailable for trading. It's generally advisable to avoid initiating trades during this period to prevent complications.
- Residual Transfers: Occasionally, small amounts of cash from dividends or other distributions might arrive at Edward Jones after the main transfer is complete. These are often sent as "residual transfers" to your new Fidelity account for up to six months.
- Transfer Bonuses: While not directly tied to a Roth IRA transfer from Edward Jones to Fidelity, some brokerage firms do offer transfer bonuses for new money brought into their accounts. It's always worth checking Fidelity's current promotions before initiating a transfer, though IRA transfers may not always qualify for such bonuses.
10 Related FAQ Questions
How to check the status of my Roth IRA transfer to Fidelity?
You can typically check the status of your Roth IRA transfer by logging into your Fidelity online account. There will usually be a "Transfer Tracker" or similar feature that provides updates on the progress of your transfer.
How to avoid fees when transferring my Roth IRA?
While Edward Jones charges a transfer fee, Fidelity generally does not charge incoming transfer fees. To potentially offset Edward Jones's outgoing transfer fee, some investors with larger account balances might inquire if Fidelity offers any reimbursement programs, though this is not guaranteed.
How to know if my Edward Jones investments can be transferred in-kind to Fidelity?
The best way to determine this is to review your current Edward Jones holdings and then contact Fidelity directly. They can tell you which specific investments are supported on their platform for an in-kind transfer. Proprietary mutual funds from Edward Jones are usually not transferable.
How to handle untransferable investments during a Roth IRA transfer?
If some of your Edward Jones investments cannot be transferred in-kind, they will be liquidated into cash. You will then have the cash available in your Fidelity Roth IRA to reinvest as you see fit.
How to ensure my Roth IRA transfer is not a taxable event?
To ensure your Roth IRA transfer remains non-taxable, initiate a direct transfer (also known as a trustee-to-trustee transfer). This means the funds move directly between Edward Jones and Fidelity without you ever taking possession of the money.
How to get my cost basis information transferred to Fidelity?
Fidelity will automatically request your cost basis information from Edward Jones after the transfer is complete. This process can take up to 15 calendar days after the assets settle in your Fidelity account.
How to transfer a partial Roth IRA from Edward Jones to Fidelity?
When filling out Fidelity's transfer form, you will have the option to specify whether you want a full or partial transfer. If partial, you'll need to clearly indicate which specific investments or dollar amounts you wish to transfer.
How to contact Fidelity for transfer assistance?
You can contact Fidelity's customer service via phone (their main number is usually available on their website) or through their online chat support. You can also visit a local Fidelity Investor Center if one is available in your area.
How to reinvest my cash after a Roth IRA transfer to Fidelity?
Once the cash appears in your Fidelity Roth IRA, you can log into your account and use their trading platform to purchase new investments. Fidelity offers various research tools and screeners to help you find suitable investments.
How to close my Edward Jones Roth IRA after the transfer?
If you've completed a full transfer of your Roth IRA to Fidelity, you can contact your Edward Jones financial advisor or their customer service directly to confirm the account is fully closed and that there are no remaining balances or outstanding fees.
