InvestSMART does not allow investors to transfer existing shares, holdings, or assets, in or out of a Professionally Managed Account (PMA) 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 costly. Brokerage services will charge a fee between $30 and $90 per security to cover the time needed to facilitate 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 wish to trade upon them.
We do not expect that many clients will hold the same investments or 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 finished - it is still very likely that we will need to sell some, or all, of your shares to rebalance your investments based on the Model Portfolio(s) that you selected.
We want to make your transition to investing with us as easy as possible, so please feel free to contact us at firstname.lastname@example.org