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Transferring Stocks from Robinhood to Fidelity

If you’re considering transferring your stocks from Robinhood to Fidelity, you’re not alone. Investors often switch brokerages for a variety of reasons, such as seeking better customer service, more robust trading platforms, or differences in fees and offerings. In this guide, we’ll walk you through the process of transferring your stocks using the Automated Customer Account Transfer Service (ACATS), common questions and misconceptions, and what you can expect during the process.

Understanding Stock Transfers

Transferring stocks from one brokerage to another is a common financial activity. The process is governed by the ACATS, which is an electronic system operated by the National Securities Clearing Corporation (NSCC). This system is designed to facilitate the prompt and secure transfer of securities from one brokerage firm to another.

Why Transfer Stocks?

  1. Fees and Commissions: Some brokerages have higher fees, which can eat into your profits. Switching to a firm with more favorable pricing can result in considerable savings.

  2. Platform and Tools: Investors may seek more advanced trading platforms or better analytical tools that a different brokerage might offer.

  3. Customer Service: The quality of service varies across brokerages. If you’re unhappy with the service at Robinhood, moving to Fidelity might offer a more supportive customer experience.

  4. Account Options: Different brokers offer unique account options, investment products, and services. Fidelity might provide accounts or products that better align with your investment goals.

  5. Consolidation: Simplifying your portfolio by consolidating accounts is a common goal for investors seeking easier management of their investments.

Preparing for the Transfer

Before initiating the transfer, take these steps to ensure a smooth transition:

Review Your Holdings

  1. Check Restrictions: Not all securities held in your Robinhood account may be transferable. Confirm with Fidelity beforehand whether they can accommodate all your investments.

  2. Outstanding Orders: Cancel any open trades or orders to prevent complications.

  3. Crypto and Fractional Shares: Robinhood offers crypto trading and fractional shares. Be aware that these may not transfer and could need to be sold and repurchased.

Document Verification

Ensure your information matches across both brokerage accounts. Discrepancies in personal details like name, address, or Social Security Number might halt the process.

Account Types

Make sure that the type of account on Robinhood matches the one you’re opening or have at Fidelity. For instance, if it’s an individual brokerage account at Robinhood, it should be the same at Fidelity.

Initiating a Transfer

Step-by-Step Guide

  1. Open a Fidelity Account: If you don’t have one, you’ll need to set up an account at Fidelity first. This can be done online, and the account setup is usually straightforward.

  2. Gather Information: You’ll need your Robinhood account number and data about the stocks you plan to transfer.

  3. Log into Fidelity: Once logged into your Fidelity account, navigate to their account transfer section or ACATS.

  4. Begin the ACATS Process:

    • Select Robinhood: As the source account from which you’ll transfer securities.
    • Specify Assets: Indicate whether you want to do a full or partial transfer.
    • Review Details: Ensure all information is accurate before submitting.

  5. Submit Your Request: Fidelity will initiate the transfer process and communicate with Robinhood to move your assets.

Expected Timeframe

Typically, the transfer process takes about 5 to 7 business days. This can vary depending on the completeness of the information provided and any issues that might arise.

Understanding Fees and Restrictions

Possible Fees

  • Robinhood: While Robinhood does not typically charge for stock sales, they may impose an account transfer fee. Be sure to check their fee schedule.

  • Fidelity: Usually, Fidelity does not charge for incoming transfers, but it’s good to confirm this with their customer service or through their fee schedule.

Retrictions and Securities Types

  1. Fractional Shares: These might not transfer directly and could be liquidated.

  2. Crypto Holdings: Fidelity does not facilitate cryptocurrency trading directly, thus crypto will need to be sold before the transfer.

  3. Non-Conforming Assets: Some niche securities might not be supported and may need to be managed separately.

Addressing Common Questions and Misconceptions

FAQs

  • Can I transfer my entire portfolio automatically? Yes, using ACATS you can opt for a full account transfer, which moves all eligible assets.

  • What happens to dividends or pending transactions during a transfer? Any scheduled dividends will still be processed by the originating brokerage and then transferred as cash into the new account when settled.

  • Will my cost basis information transfer? Generally, the cost basis and acquisition dates of your securities should transfer. Verify this information post-transfer to correct inaccuracies.

Misconceptions

  • Transfers are instantaneous. While ACATS aims to simplify the process, transfers are not immediate and involve multiple steps over several days.

  • You cannot trade during the transfer. Trading in the assets being transferred is typically not possible, but other securities in your accounts may be traded.

Tips for a Smooth Transition

  • Stay Informed: Keep track of communications from both brokerages during the transfer.
  • Maintain Records: Document all trade confirmations, prior to, and post-transfer statements for future reference.
  • Contact Support: Don’t hesitate to reach out to the customer service departments of both brokers for clarifications or concerns.

Considering Alternatives

If you are unsure about a direct transfer, you could also:

  1. Liquidate and Reinvest: Sell your assets and transfer cash to purchase new securities in Fidelity. Be wary of potential tax implications.

  2. Transfer by Certificates: Although less common, transferring physical stock certificates can be another method but is often more complex and time-consuming.

Transferring stocks from Robinhood to Fidelity can enhance your investment experience provided it aligns with your financial goals. By understanding the process and preparing sufficiently, you can ensure your assets are moved smoothly and promptly. For more information, feel free to explore investing strategies and brokerage comparisons on our website.