What It Costs to Leave Your Broker

An account transfer is a commodity process. Your holdings move in kind through the same automated system — ACATS — whoever you are leaving, and the receiving broker does most of the work. What varies is what the firm you are leaving charges you for letting go.

Every exit fee we could verify

E*TRADE publishes no transfer-out fee on any page we could read, which is not the same as charging nothing. SoFi’s schedule was unreadable to us, so it is absent rather than free.

The partial transfer is where it gets expensive

This is the column nobody publishes, and it is the one that catches people. Schwab and Merrill Edge charge their full fee to close an account and nothing to move part of it. Robinhood, Public, tastytrade and eToro charge the same fee either way.

The practical consequence: at Schwab you can move a single position to another broker for free and keep the account open. At Robinhood, moving one position costs $100 — the same as moving everything. If you were planning to split your holdings across two brokers, which side you start from decides whether that costs nothing or costs a hundred dollars.

Waivers, and who they are for

Vanguard’s $100 processing fee is waived at $5,000,000 in qualifying assets or with advisory enrolment. That is a real waiver, and it is available to almost nobody reading this. When a fee is waived at a threshold, check whether the threshold is one you will cross before assuming the fee does not apply to you.

The other common waiver is not from the broker you are leaving but the one you are joining. Several firms reimburse transfer fees to win the account, usually above a minimum balance. It is worth asking the receiving broker before you start, because the reimbursement is normally not automatic.

How to keep the cost down

1. Transfer in kind rather than selling. Selling to move cash can create a tax bill far larger than any exit fee
2. Check whether the fee is per account. If you hold a taxable account and an IRA at the same firm, you may be charged twice
3. Ask the receiving broker about reimbursement before initiating, not after
4. If you only want to move part of the account, check the partial column first — at some firms it is free and at others it is the full fee

None of these fees is large enough to justify staying at a broker that does not suit you. A $100 exit charge is recovered quickly by a lower margin rate or a cheaper options schedule. The reason to know the number is to avoid meeting it as a surprise, and to weigh it once rather than never.