Ensuring a smooth transition when considering a change in broker

There are a wide range of reasons why you may want to change broker. Perhaps you are not happy with their services; perhaps you have found a broker that offers a better deal than your current one; or maybe you have just decided that you fancy a change. Whatever your reason to change brokers, there are always worries under the surface that the changeover may go wrong. What can you do to help make sure that your transfer to a new broker is a smooth process? 

Make sure that you factor in any fees in your calculations

There are usually fees involved when changing brokers. Depending on the size of your account, it could be a small fee or a significant fee. When you decide to make your broker transfer, you will usually calculate how much of an increase there will be in your investment yield. It is vital to factor in the transfer fee when working out your investment yield, because depending on the size of the fee, it could make the changeover less of a positive for your finances.

By the same token, it is important to find out what incentives your new broker is offering. Some brokers will offer a financial incentive, such as money being added to your account, in order to smooth out the transition. This could cover the fees that your old broker will apply to your transfer. There are also other incentives that are offered by brokers that may persuade you to move, while not covering any changeover fee. Items such as frequent-flyer miles or electronic devices could persuade you to make the change, but technically your investment yield will still be slightly down.

Check on what stocks you hold

Not everyone keeps a close eye on their portfolio. Stocks and shares are not quite the same as buying a house. A lot of people will leave their portfolio to be managed by their broker or in some cases leave it lying dormant in general. This can lead to the possibility of holding shares that have a value of nothing. If a business has gone bankrupt, then you will still hold the shares in your portfolio, despite them having no value. This can cause issues when you attempt to transfer your brokerage account.

In this case, when you attempt to make the transfer, your potential new broker may reject the account transfer. If your new broker does not allow you to hold stocks and shares in a bankrupt company, then this could lead to your account transfer being rejected. In this case, you may have to file the correct forms to carry out a partial account transfer. By checking what your portfolio contains, you will be able to file the paperwork in advance. This will avoid any potential delay that could occur by your account transfer being rejected. This is a very important aspect of changing your broker, as a delay could cost you additional money in terms of both extra fees and from missing out on the potential to trade. 

Never move blindly – research your broker

Comparing brokers before you make the change is a vital step. If you do not make a comparison between the services that brokers offer, then there is a good chance that you will not make the best possible choice. Looking through reviews, such as this Alvexo review, will ensure that you are fully informed on what different brokers can bring to your account management. It is not just the financial aspects that are covered. Other items that are less front and centre are covered in broker reviews, so you will be able to find out the quality of the customer service, the additional features that are on offer, and how long transactions might take, among other things. All of these are important aspects to choosing a broker but can often be ignored in favour of just looking at the financial implications.

By making sure that you follow all of these steps, you will be able to ensure that your broker change is as smooth a process as possible. As there is usually a delay on trading once you have moved to a new broker, it is important to make sure that it is carried out quickly. If you add an extra two days to the time that it takes you to transfer your account, it can mean that you miss almost a full week of trading. Make sure that this does not happen by facilitating a smooth changeover.