How Client Accounts Move When You Change Firms: ACATS, Repapering and What Clients Sign

The short answer: When an advisor changes firms, each client decides whether to follow, and each account then moves on its own rails. When the accounts change custodian or clearing firm, brokerage accounts, advisory accounts and IRAs move through ACATS, the industry's automated transfer system, in about three to four business days once the new firm submits the transfer. Annuities and 529 plans stay with the insurer or the plan, and the firm on the contract changes by form. Some assets cannot move at all, and the client chooses what happens to them. The transfer system is fast; the forms, and the holdings that need a decision, are what take time.

Our guide to how long a financial advisor transition takes covers the clock. This one covers the accounts themselves: what moves and how, what each client signs, and where transfers stall, with the rule behind each step. Much of it can be worked out product by product before a move, without sharing anything that identifies a client.

Who starts a transfer, and what happens after the client signs

"All transfers start and end with your new firm," in the SEC's words. The sequence runs under FINRA Rule 11870 and NSCC's ACATS process:

1. The client signs at the new firm. The client opens an account there and signs a transfer instruction, which the new firm must submit through ACATS immediately. Electronic signatures count. For an IRA, the new custodian has to accept the account before the instruction goes in.
2. The old firm validates, within one business day. It returns the instruction with a list of the account's positions and money balances, or takes exception to it on one of the grounds the rule lists.
3. The old account freezes. On validation of a full transfer, the old firm cancels open orders and takes no new ones, except for options expiring within seven business days.
4. The old firm completes the transfer within three business days of validation.
5. The stragglers follow. Dividends, interest or sale proceeds that land in the old account afterward must be forwarded promptly, and the old broker must send the new one a cost-basis statement within 15 days after the transfer settles.

The process got shorter in 2025. NSCC removed one processing day, called Settle Prep, from ACATS on October 17, 2025, and DTCC says a full transfer can now be processed in three to four business days, down from four to five. Transfers outside ACATS run on exchanged forms: banks, mutual fund companies, insurers and partnership sponsors are not required to use it, and the SEC says it is not uncommon for those transfers to take up to 30 days. When the old and new firm use the same custodian or clearing firm, ask the custodian how it handles the change, since the accounts may not need to leave it.

Every account moves because its owner asked for it. FINRA does not allow registered representatives to move accounts by negative consent, a letter saying an account will move unless the client objects, and it repeated that reminder in February 2026.

What moves, account by account

How each common account or asset moves when the custodian or clearing firm changes. What the client signs is set out further down.

Margin and option positions may need margin and options agreements at the new firm before they transfer. An inherited IRA moves into an IRA kept in the deceased owner's name for the beneficiary.

What happens to the assets that cannot move

FINRA Rule 11870 names six kinds of nontransferable assets:

• the old firm's proprietary products, unless the new firm agrees to accept them;
• third-party products, such as mutual funds or money market funds, that the new firm has no relationship to carry;
• assets the new firm's regulatory limits bar it from holding;
• bankrupt issues with no deliverable form and no transfer agent;
• securities whose proper denominations cannot be obtained, such as some foreign securities and baby bonds;
• limited partnership interests in retail accounts.

For each one, the client decides. The client can sell it, with any redemption or liquidation fee disclosed and taken from the cash due; leave it at the old firm; have it shipped in their own name; or, for a third-party product, transfer it to the product's original source, such as the fund company. Once the client instructs a sale or a transfer, the old firm has five business days to act on it. For a retirement account, the firm must warn that the choice can create taxes and penalties. The SEC adds two cautions: assets left behind in an inactive account may carry a fee, and physical certificates taken into the client's own hands can be lost or stolen.

Fractional shares are a separate case. FINRA tells investors that fractional shares cannot currently be transferred to another brokerage firm, so they are sold first, which can create a tax bill. Schwab, for one, lists restricted stock among assets that may not transfer.

What replaces a holding that cannot move is a supervised decision. FINRA has warned that newly hired representatives may be tempted to replace funds and variable products the new firm cannot service, and said that "a change of employment is not by itself a suitable basis for recommending a switch from one product to another." The same guidance says the new firm's due diligence should learn which fund and variable products the representative's customers hold, without the customers' nonpublic personal information. That is the right level for the work before a move: which products in the book the new firm can carry, which would need a decision, and what each kind of decision can cost a client in taxes, fees or surrender charges. Portability is one of the forces that decide what share of clients follow an advisor, and it is the one an advisor can know in advance.

Annuities, 529 plans and directly held funds: the firm on the contract changes

An annuity bought through a broker is held by the insurance company; the broker keeps a record of it and services it. When the client moves, the SEC explains, the old firm uses ACATS to change the broker of record to the new firm. DTCC automates that notice for insurers on its network, which it says connects more than half of the industry, and carriers also use their own change forms. Those forms take the owner's signature and the new agent's details, and an insurer can require the new agent to be appointed or contracted with it before the agent services the contract. The change needs a new firm that can carry the contract and an agent the insurer has appointed; without both, servicing stays where it is.

Changing who services an annuity leaves the contract with the same insurer. Replacing the contract is a separate decision, a 1035 exchange, and the SEC tells investors not to confuse the two. FINRA warns that an exchange may involve surrender charges and usually restarts the surrender period, which on variable annuities can run eight years or more.

Mutual funds held directly at the fund company work the same way. The account sits at the fund with a broker-dealer of record named on it. In 2004, NASD staff described changing that firm as mainly affecting who receives any fees and commissions, leaving the account's owners, assets and features as they were.

An advisor-sold 529 plan stays in the plan, and the firm on the account changes by the plan's own form, which the new financial professional completes and the owner signs. The new firm needs a selling agreement with the plan's distributor, and some plans let the owner change share class on the same form. Moving the money to a different 529 plan is a rollover instead: free of federal income tax if completed within 60 days for the same beneficiary or a family member, and, for the same beneficiary, generally limited to one rollover in 12 months. That is the federal rule; check the state plan's own rules before moving money out of it.

Is moving an IRA a rollover?

An IRA that moves through ACATS goes custodian to custodian, with no distribution to the client. A direct move between custodians is what the IRS calls a trustee-to-trustee transfer, and the IRS keeps it outside the rollover rules: it is tax free, and it does not count toward the limit of one IRA rollover in any 12 months.

The risk is a check made out to the client. That is a distribution. The client has 60 days to deposit it in an IRA, an IRA distribution paid to the owner is subject to 10% withholding, and the rollover counts toward the one-per-year limit, which applies across all of the client's traditional, Roth and SIMPLE IRAs together and runs from the date the money was received. The IRS can waive the 60-day deadline in some cases; it cannot waive the one-per-year rule.

Three more IRA points:

• Acceptance comes first. The new custodian accepts the IRA before the transfer instruction is submitted, so the IRA application and custodial agreement are signed first.
• Inherited IRAs have one route. An IRA inherited from someone other than a spouse cannot be rolled over; it can move only by trustee-to-trustee transfer into an IRA kept in the deceased owner's name for the beneficiary.
• Beneficiaries need checking. FINRA tells investors to confirm with the firm that beneficiary designations transfer with the account.

A client's 401(k) stays in the employer's plan when the advisor moves. Rolling it to an IRA is a separate decision and a separate recommendation. Money leaves only when the plan document allows a distribution, for example after the employee leaves the employer or reaches age 59 1/2, and a plan need not allow every distribution the law permits. Where a rollover happens, a direct rollover, paid by the plan straight to the IRA, avoids the mandatory 20% withholding that applies when the plan pays the participant, and recommending it requires the firm to deliver Form CRS to an existing retail client before or at the time of the recommendation.

What clients sign: the repapering list

Repapering means every client who follows signs new documents at the new firm, account by account. A household with a joint account, two IRAs and an annuity signs for each of them. The usual list:

• A new account application for each account. The firm will also ask for a trusted contact person it may contact about the account; the client can decline to name one.
• A transfer instruction for each account, with the name, title, account type, account number and tax ID exactly as they appear on the old statement.
• An IRA application and custodial agreement for each IRA.
• A new advisory agreement when the client moves to a new adviser. The Advisers Act bars an adviser from assigning an advisory contract without the client's consent, and in practice a client moving to a new adviser signs a new agreement with it. An advisor who owns the RIA and changes only the broker-dealer or custodian keeps the client agreements, since the adviser itself has not changed; leaving an independent broker-dealer covers that case. The new adviser delivers its brochure (Form ADV Part 2A) before or at signing, a brochure supplement (Part 2B) before or when each advisor begins advising the client, and, to retail clients, Form CRS.
• Supporting documents where ownership or names differ from the old account, such as death or marriage certificates, or a letter confirming that two versions of a name belong to the same person.
• Product forms: insurer forms for annuities, plan forms for 529s, sponsor forms for alternatives, and margin and options agreements where those positions move.
• Standing instructions. A standing letter of authorization, which lets an adviser send a client's money to a third party the client names, is an instruction the client gives one custodian, so a client who uses one should ask the new custodian how it is set up again.

For advisory accounts billed in advance, the old adviser's brochure explains how a prepaid fee is refunded when the agreement ends early.

If the new firm is a FINRA member broker-dealer, it has one more obligation. Under FINRA Rule 2273, for three months after a representative joins, the firm must give former retail clients FINRA's educational communication when it or the representative contacts them about moving assets, or with the transfer paperwork. The communication suggests five questions: whether financial incentives create a conflict, whether all holdings can transfer and at what cost, the short-term and ongoing costs, how products compare, and the level of service. Knowing the product answers in advance lets the advisor answer the second and third when a client asks.

Does cost basis follow the account?

ACATS moves the positions; federal tax rules govern how their cost basis follows. The old broker must send the new broker a transfer statement with each covered security's adjusted basis and acquisition date within 15 days after the transfer settles. Covered securities include stock bought for cash after 2010, mutual fund shares and other average-basis stock bought after 2011, and certain bonds and options bought after 2013 or 2015. For older, noncovered holdings, the broker does not have to send basis, and a new broker missing a complete statement asks once and may then treat the security as noncovered.

NASD, FINRA's predecessor, said in 2004 that refusing or impeding the delivery of electronically held cost-basis information violates the just and equitable principles of trade its members must observe. The practical step is simpler: keep the old firm's final statements and its gain and loss records, particularly for holdings bought before those dates.

Where transfers stall

The SEC says most delays come from incorrect or incomplete transfer forms. The usual sticking points are predictable:

• Mismatches. The rule's grounds for exception read like a list of common errors: an invalid account number, a Social Security or tax ID mismatch, a title or account-type mismatch, missing or improper authorization, missing documents such as a death or marriage certificate, and a duplicate request. FINRA's 2006 transfer task force found that account numbers on clients' statements sometimes differed from the numbers firms used in ACATS after mergers or clearing changes.
• Names. A custodian may ask for a marriage certificate or divorce decree when last names differ, and a one-and-the-same letter when first or middle names do.
• Holdings the new firm cannot carry. Each one waits on the client's decision, and the SEC notes that deciding can lengthen the transfer.
• Appointments and selling agreements. Annuity changes wait on the new agent's appointment with the insurer, and 529 changes on the new firm's selling agreement with the plan's distributor.
• Counterparties outside ACATS. Banks that do not use it, fund companies, insurers and partnership sponsors exchange paperwork, and some have asked for wet signatures and mailed forms. SIFMA urged them in 2022 to drop those requirements, and said medallion signature guarantees are meant for changes of ownership.
• Trading during the move. The SEC warns that buying and selling during a transfer can complicate and delay it, and the old account freezes once a full transfer is validated.
• Loans and debits. An account pledged against a loan or carrying a debit can hold a transfer up: the old firm may take exception for a conflict with its credit policy, the new firm may decline an account that fails its own credit policy or minimums, and FINRA's rule against interfering with transfers does not reach an account subject to a lien for money the client owes.
• The two-day limit. If the old firm takes no action, or an exception is not resolved within two business days, the request is purged from ACATS and the new firm has to submit it again.

The old firm's room to object is narrow. It may not take exception because of a dispute over positions or money balances, and FINRA Rule 2140 bars any firm or person associated with it from interfering with a client's transfer request tied to a representative's change of firm, including by seeking a court order against the request.

What the advisor may take, and what the old firm tells clients

The accounts move on the client's signature. What an advisor may bring to the new firm is a separate question. When both firms have signed the Protocol for Broker Recruiting, a departing advisor may take five items for the clients they serviced: name, address, phone number, email address and account title. The advisor resigns in writing, gives the branch a copy of the list, and may solicit those clients only after joining the new firm. Where the firm being left has not signed, the employment agreement governs, and counsel reads it before the resignation. Advisors launching their own firm have more steps, set out in can you take your clients when you start an RIA.

Regulation S-P has no exception for departing representatives. The SEC proposed one in 2008 and never adopted it, and its 2024 amendments did not add one. In 2008 an SEC decision imposed a $125,000 penalty on a broker-dealer for disclosing customers' nonpublic personal information to other brokerage firms, in a recruiting context, without notice or a chance to opt out.

The old firm has its own obligations. FINRA expects the firm a representative leaves to tell affected clients promptly and clearly how their accounts will be serviced. When asked, it may tell clients they can stay with a newly assigned representative or transfer their assets to another firm, and give the departing representative's contact details if the representative has agreed, and its messages must be fair, balanced and not misleading.

Transfer fees

FINRA Rule 11870 does not set or cap transfer fees. "Sometimes, transfer fees can be substantial," the SEC says: the old firm may charge to transfer an account, retirement accounts may add a transfer-out fee and a prorated custodial fee, and the new firm may charge too. The SEC suggests asking the new firm to waive or reimburse them, and FINRA notes that a new firm's waiver does not reduce what the old firm charges.

Planning the move, account by account

At an established firm, the transition team prepares most of these forms; at a new RIA, the founders or a service provider do. The client conversations belong to the advisor. What decides how smoothly the accounts move comes in two stages. Before the move, a product-level picture, with no client names in it, of which holdings move by ACATS, which move by form and which would need a decision. After joining, a household-by-household plan built from what each client provides. What the weeks after the resignation feel like is in the first 90 days after an advisor move.

Working out what a book's products need, before and after the move, is part of how we plan a move at Winthrop & Co., and the answer for your practice takes a conversation. Request an Introduction.