InvestSMART does not allow investors to transfer existing shares in or out of a Professionally Managed Account to facilitate initial funding, contributions or withdrawals.
We believe this decision is in the best interest of our clients for the reasons below.
Transferring shares, called an in-specie transfer, can be a very expensive process as brokerage services will charge a fee between $30 and $90 per security transferred to cover the time dedicated to facilitating the transfer.
For example, transferring 15 stocks could cost between $450 and $1,350.
Unsurprisingly there is a lot of paperwork involved for the investor, us and the current broker holding the shares on their platform.
Investors are required to sign, scan and return a transfer request for each security along with a detailed cost base breakdown to ensure that tax implications are calculated accurately on any future transactions.
Share transfers require not only all the paperwork to be completed by the investors, but paperwork and administration to be acted upon by the brokerage service transferring the shares and the brokerage service receiving the shares.
It is not uncommon to see this process take anywhere from 2 weeks to 2 months during which your investments are in limbo, which is dangerous should there be short-term volatility and you may wish to trade upon them.
We do not expect that many clients will hold the same investments, nor the same weightings, as the Model Portfolio(s) they have selected for their Professionally Managed Account (PMA).
What this means is that even once you have paid the transfer fees, completed the paperwork and waited for the process to be finish - it is still very likely that we will need to sell some, or all, of your shares to rebalance your investments with the Model Portfolio(s) that you selected.
While these rules are in place we're always open to discuss your transition to invest with us, so please feel free to contact us at firstname.lastname@example.org