A bad time to change financial institutions?
We have been wanting to move our investments from Edward Jones to Fidelity in order to save on fees. With the markets being down, is now a bad time to move our money? We would be selling low at EJ but also buying low at Fidelity. When is a good time in the market to make this transition?
Terry Says
Some of that depends on how your account is titled. Is it an Individual Retirement Account? If so you would do a rollover — and most rollovers are done in cash. But since those investments inside an IRA don’t get capital gains tax treatment, it really doesn’t matter if you sell and buy similar stocks or funds after you do the rollover. For instructions on how to roll over, read this recent column.
If your investments are stocks or mutual funds OUTSIDE a retirement account, they can be transferred to a new account “in kind” –without selling them and without any tax implication. But you have to give clear instructions to do it this way — NOT by liquidation. Not by selling your positions, which would generate tax consequences. Put that in writing. In that case, you would transfer to a new account with FIDELITY BROKERAGE — so they would hold your positions and you would maintain your cost basis for tax purposes, eventually.
