Investing Tips: Transferring Mutual Fund Accounts

How to transfer mutual fund accounts, easily.

To transfer mutual funds from a mutual fund company to a brokerage, or from one brokerage to another, you'll need to fill out some paperwork.

You get the forms from the company that will be receiving the funds. For example, if you are transferring your funds from Brokerage X to Brokerage Y, contact Brokerage Y for the forms.

Some brokerages have the forms on the internet. You can fill out the forms online, print them out, sign them, and then mail them to the brokerage. Some of these brokerages also have step-by-step tutorials to help you fill out the forms. Alternatively, you can call the brokerage and ask them to send you the forms in the mail. In either case, you will need to attach a copy of your latest statement from your old company (in our example, Brokerage X).

If you are transferring the funds to a brokerage where you already have an account, the form you need to fill out is called an Account Transfer Form. If you do not already have an account at the brokerage, you can open an account and transfer funds at the same time by attaching an Account Transfer Form to your new account application.

Not all mutual funds can be transferred. In particular money market funds and proprietary funds cannot be transferred to a new brokerage company. A proprietary fund is one that is issued by the company you bought it from. For example, Brokerage X may have sold you shares in its own in-house fund called the "X Fund." You will not be able to transfer those shares elsewhere. Instead, you will have to sell your shares and then transfer the cash.

If the mutual funds you are transferring are in a retirement account that is NOT an account that you have through your employer, you should be able to transfer the funds using a form supplied by the receiving brokerage designed specifically for the type of account you are transferring -- i.e. IRA, Keough, etc.

However, if you want to roll over a fund that is part of an employee benefit plan, you should contact your plan administrator, rather than the receiving brokerage company. Your plan administrator will tell you if you are eligible to roll over your account and will explain what the procedures are. You might also want to talk to a tax advisor to see if there are any tax consequences to rolling over your account.

It should take less than a month to transfer your funds from one brokerage company to another. If it takes longer than that, first try to work with the receiving company, then with your old company. If that doesn't resolve the problem, contact the SEC, the National Association of Securities Dealers, or the state agency that regulates securities dealers.

Note: People often think that if they exchange their shares from one mutual fund for shares of another mutual fund within the same fund family, they are transferring the funds. However, this is not the case. What actually happens is that the shares from the first fund are sold, and then the proceeds are used to buy shares in the second fund. This means that there will be tax consequences, unless the funds are being held in a tax-free retirement account.

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