Her Old Brokerage Can Move Every Share to a New Firm Without Selling a Thing, and the New Firm May Cover the Transfer Fee

Many investors stay at the same brokerage because they assume leaving means selling every stock and fund and paying tax on the gains. Many investors stay at the same brokerage because they assume leaving means selling every stock and fund and paying tax on the gains. But most stocks, ETFs, and other eligible investments can move directly to a new brokerage without being sold. That generally avoids triggering capital gains taxes, and the new firm may even cover the exit fee your old firm charges.

How an In-Kind Brokerage Transfer Actually Works

In-kind means your investments move exactly as they are, with the same shares, the same funds, and the same amounts, and brokerages pass accounts to each other through an automated system called ACATS, short for Automated Customer Account Transfer Service. You open an account at the new firm and sign a transfer form. The new firm starts the request and moves the assets over. Since nothing gets sold, you don’t owe capital gains tax, the tax on profit when you sell something for more than you paid. In-kind moves generally avoid that tax when assets move between accounts with the same tax treatment and ownership.

FINRA Rule 11870 sets the timeline: your old firm has one business day to validate a transfer and three more to complete it. Validating means checking that the names and account details match. A mismatched form can stall the whole thing.

Your cost basis (what you originally paid) moves with the shares. Under 26 CFR 1.6045A-1(a)(3), the old firm must send the new broker a transfer statement within fifteen days after the date of settlement for the transfer. The regulation has separate rules for noncovered securities, so shares you bought long ago may come with incomplete basis. Check every position after the move.

Your IRA Moves Tax-Free, With No Yearly Cap

Retirement accounts get the same treatment. According to IRS Publication 17, a direct move between IRA trustees “isn’t a rollover”, and the publication adds, “Because there is no distribution to you, the transfer is tax free.”

A direct transfer also avoids the IRA rollover limit. Under 26 U.S.C. § 408(d)(3), you get only one rollover from an IRA to another (or the same) IRA in any 1-year period. And the IRS counts all your IRAs together. Publication 590-A states that “trustee-to-trustee transfers between IRAs aren’t limited.” With a rollover, the old custodian pays you, and you redeposit the money within the 60-day rollover period. A direct transfer skips that deadline completely.

Who Qualifies and Who Needs a Different Route

Taxable brokerage accounts and IRAs both qualify. The new account should match the old one’s owner and tax type, so an IRA lands in an IRA. Inherited IRAs can move only by direct transfer. The new account must be set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary. Workplace plans such as a 401(k) go through the plan’s own rollover process. The IRS proposed sample forms to speed those up in Notice 2026-49, released August 12, 2026. Those forms aren’t intended for IRA-to-IRA rollovers or transfers.

Steps to Move Your Account Without Selling

1. Open the same type of account at the new firm, registered exactly like the old one.
2. Move a recent statement so the name and account number on the transfer form match it exactly.
3. Sign the new firm’s transfer form. You can pick a full transfer or a partial one if you’d like to keep some holdings where they are.
4. Before you submit, ask the new firm whether it reimburses outgoing transfer fees and what proof it needs.
5. When the shares come, check the amounts and cost basis against your old statement.

Fees, Stranded Funds and Fractional Shares

Outgoing transfer fees are common, and many receiving firms reimburse them. Terms vary, so get the details in writing. Some holdings cannot move and need each client’s instructions. A firm’s own proprietary mutual funds may need to be sold or left behind, and fractional shares may be sold. In a taxable account, any of those sales can create a tax bill. According to IRS Publication 550, “any exchange of shares in one fund for shares in another fund is a taxable exchange,” even inside the same fund family.

Why Consolidating Before Required Withdrawals Pays Off

Lower fees, better tools, and better service are all good reasons to switch. Lower fees, better tools, and better service are all good reasons to switch. Consolidating can also simplify required minimum distributions as retirement approaches. The IRS requires you to calculate the minimum withdrawal for each traditional IRA separately, although you can generally take the combined amount from just one account. Fewer accounts mean fewer balances to track.

Publication 17 also notes that required distributions aren’t eligible for rollover treatment, another big reason to move money directly between custodians. Large pre-tax balances can also create a substantial tax bill when RMDs begin, and we explained how to plan for that years in advance in a free guide

Download This Before You Start

It’s really important to grab two things from the old firm while you still have access: a recent statement and a full cost basis report, since if your basis shows up wrong or blank at the new firm, that report proves what you paid.

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