What is Portfolio Transfer?

Portfolio transfer occurs when traders want to transfer their investment from one brokerage platform to another. The transfer takes place through a software-based system called Automated Customer Account Transfer.

This post will cover how this is carried out in both the US and Australia.

Reasons to Move Platforms

A few reasons a trader might want to transfer platforms include:

• Declining business in previous brokerage platform
• New brokerage platform increased commissions
• Lower fees in new brokerage platform
• To use features such as online research and robo-advisor algorithms available on new platform

It can be noted that traders are always searching for the best platform for their investments. For example, trading in Australia through Commsec might have transaction fees up to $30 while Stake offers just $3 for trades (see more here: Stake’s Now Offers $3 ASX Trades – Stake vs CommSec Comparison for 2022 ). Traders can also find more details on comparing platforms here (insert link for comparison between trading platform)

What Are Your Rights?

In most countries, the transfer of stocks between platforms is allowed and made easier through online processes such as ACAT. However, there is a required level of eligibility to use this system.

Process of portfolio transfer in the US

An investor can move stock from one trading platform to another using ACATS. The National Securities Clearing Cooperation introduced ACATS in order to transfer stocks, cash, bonds, mutual funds, etc. However, one must be an eligible member to use this system.

Many trading platforms accept an in-kind ACAT transfer where the existing investments of the user can be moved as it is. It also helps avoid tax issues that come with selling investments. The steps to make the transfer include:

1. Receiving the latest statement from the existing account. The new broker will require a number of important information such as account type and current investments.
2. Opening a new account at the new broker platform. One can note that most online platforms offer detailed instructions on ACAT transfer processes including the form.
3. Once the form for the ACAT process is filled and submitted, the new broker will require time to review the assets being transferred. They will then work with your old broker to transfer your assets.

Process in Australia

Similar to the United States, Australian portfolio transfers occur via in-kind ACAT. Many online trading platforms such as Commsec offer this on their site. In Australia, you will be required to complete a Clearing House Electronic Subregister System (CHESS) sponsorship that will facilitate the transfer of existing investments from one broker to another.

Conclusion

In conclusion, a portfolio transfer between trading platforms may sound daunting at first. It will be beneficial to the shareholder to research their rights and eligibility before applying to have an in-kind ACAT transfer in either the United States or Australia.