It is not uncommon for clients to consolidate investments to one financial institution. Let’s face it, sometimes it is just easier to have one person driving the ship. In the case that you have multiple investment accounts at multiple institutions, and you wish to move them to us, below are the four primary types of investments and accounts and how to move them to Davis Wealth Services.

Taxable Investment Accounts
A taxable investment account is simply an account where you have already paid the tax on the principal. Should you sell an investment in this account, you would incur either a taxable gain or loss. To transfer this account, simply fill out an ACAT form to transfer the account “In Kind”, meaning the investments come over as is. This does not create a transaction and thus does not create a taxable gain or loss. Your basis in your investments transfers over with the assets.

We use the ACAT process to electronically transfer your investments from your former investment institution to your account(s) at LPL Financial. This process generally takes two to four business days.

Once we receive your investments into your account, we will audit the account to make sure all assets were received. Any dividends that may be received by your old account will automatically sweep into your account(s) at LPL for sixty days.

Individual Retirement Accounts (IRA)
Whether your account(s) is a ROTH IRA or a regular IRA, transferring these accounts is much like transferring the taxable account listed above. Again, we use the ACAT system to move the account, but it is coded as an “IRA Transfer”. In doing this, we are moving from one IRA to another IRA which does not create a taxable distribution.

Employer Retirement Accounts (Rollovers)
When you change jobs or retire, it is common to have a retirement account from the employer that is dormant and unmanaged. To move these funds from the employer’s plan to an IRA, we process an “IRA Rollover”. Although each employer’s custodian is different, most allow this to be done by phone. We simply open an IRA in your name and make a phone call to the custodian. Some custodians mail a check to you and some will mail it directly to the financial institution. Regardless, the transfer is tax free. However, just as any regular IRA, you will pay tax when you make withdrawals.

Investments held directly by you (Stock Certificates)
Although it is rare in today’s electronic world, some investors still hold physical stock certificates. Moving these investments to us involves bringing the physical certificates to us and signing them. We make a copy of them for our records and send them to LPL Financial. LPL “books” them into your investment account. Additionally, by putting “Transfer On Death” to your account, you can pass these investments on to your heirs at your passing, avoiding timely and costly probate.

In General:
In moving investment accounts to us or any other financial institutions, there are generally “transfer fees” charged by the institution being moved from. We generally pay these costs in goodwill to you.