How to Transfer a Betterment to Charles Schwab and Vice Versa
If you’ve used Betterment’s robo service but want to try trading on your own, you could move your account to Charles Schwab, who offers self-directed trading in many asset classes that Betterment doesn’t offer. And if you’re at Charles Schwab and want to try Betterment’s automated investing service, you can move in that direction, too. Here’s how:
Transferring from Betterment to Charles Schwab
The steps involved with transferring a Betterment account to Charles Schwab will depend on whether you’re moving an IRA or a taxable account.
IRA to IRA:
Betterment does not perform in-kind transfers for IRAs. An in-kind transfer is one in which shares of securities are moved. This process obviously avoids selling anything, which speeds up the process a little and makes everything easier.
If you want to move your Betterment IRA over to Charles Schwab, Betterment will sell all holdings in your account and send a check to Charles Schwab for the resulting cash balance. The total journey is a little more complicated than this, however.
You’ll want to log into your new Charles Schwab IRA (the one you just opened with the same name and same IRA type you have at Betterment) and request a transfer. Find the My Account link at the top of the site. Under this, you’ll see a section labeled Deposits & Transfers. Under this section, there will be a link that says Deposit. Click on this and you’ll get a list of options to transfer assets into your Charles Schwab account. In this case, you want to click on the green Transfer account button. This will give you Charles Schwab’s digital account transfer form, which is pretty easy to use.
With this e-form, you can submit a request to transfer your Betterment IRA over. You’ll need your Betterment account number, which can be found on a recent statement.
If you’re on the newly redesigned Charles Schwab website with the more elementary design (secure.ameritrade.com), you can simply click on Transfers in the top menu and then select From Another Brokerage from the drop-down menu. You’ll get the same transfer form.
A transfer can be requested through Charles Schwab’s mobile app as well. To use this platform, tap on the More icon in the bottom menu and then tap on Transfer funds. A new page will appear with a white Account transfer button. Tap on this and you’ll get Charles Schwab’s mobile ACATS form. You’ll need to supply the same pieces of information you would use on the web-based forms.
Once you have submitted an ACATS transfer request on any platform, Betterment will receive the request from Charles Schwab, and the process will begin. If your Betterment IRA is valued above $250,000, the transfer paperwork will have to be medallion signature guaranteed.
Betterment will send the cash proceeds from its liquidation directly to Charles Schwab. This means that the transfer isn’t a 60-day rollover.
Open Charles Schwab Account
Open Schwab Account
Taxable Account Transfer:
For the transfer of a regular brokerage account, Betterment does perform in-kind transfers. Fractional shares will be turned into cash and the entire account will be moved through the ACATS network. Betterment will only do a full transfer out of a taxable account. Any request for a partial transfer from a regular account will be rejected.
The basic process for conducting a transfer of a taxable account is the same as for an IRA. Log into your Charles Schwab account and click or tap on one of the transfer buttons noted above. Charles Schwab’s transfer form includes a list of logos of popular brokers, although Betterment’s isn’t among them. Searching for Betterment yields no results, so you’ll need to specify Betterment’s clearing firm. It is Apex Clearing Corporation.
Once again, Betterment makes the transfer a little more difficult than normal by requiring a medallion signature guarantee on the paperwork if the transfer is valued above $250,000. And for taxable accounts, a request below that level does require a notary stamp on the paperwork.
Alternative Method:
Because Betterment’s transfer policies are rather burdensome, it may be easier to simply withdraw cash from your account (taxable or IRA) and deposit the money into your new Charles Schwab account. Consult with your tax advisor before choosing this method for either account type as there may be tax consequences when selling and/or withdrawing.
Open Charles Schwab Account
Open Schwab Account
Transferring Charles Schwab Account to Betterment
The first step is to open a new Betterment account. You can get up to one year of service for
free if you use their promotion offer
for new customers.
Betterment’s policies continue to make transferring an account more difficult than normal. To
transfer a brokerage account into Betterment, you will first need to link the other account to
your Betterment account. To do this, click on the Connect new button that appears at the bottom
of Betterment’s website (after you have logged in).
You can link your Charles Schwab account using login credentials (via Plaid) or account information.
Once you have your Charles Schwab account linked, it’s time to make a request. To do this, click on the Transfer or rollover button at the top of the Betterment site. On the next page, you’ll be able to select either taxable or non-taxable as the account type. Select the one you have at Charles Schwab, and follow the prompts. You can specify either full or partial transfer of assets from Charles Schwab.
Remember that Betterment only offers trading in a small selection of ETFs. This could make transferring in this direction more difficult, depending on what you have in your Charles Schwab account.
Under no circumstances can cryptocurrencies be moved in an ACATS transfer. Options won’t be accepted by Betterment. If you move any stocks over, Betterment will sell them immediately. Mutual funds and ETFs that don’t align with Betterment’s investment strategy will gradually be liquidated. Funds will be used to buy more shares of the ETFs that do.
How Much Does a Transfer Cost?
Charles Schwab customers must pay $75 for a full outgoing transfer. The brokerage firm charges nothing for partial transfers. Betterment charges nothing for either type of transfer, and neither broker charges anything for an incoming transfer.
Getting the required authentications on the transfer paperwork to satisfy Betterment’s requirements could set you back up to $100 in total, although some banks are known to provide both services free of charge to their customers.
How Long Does a Transfer Take?
Charles Schwab’s website promises that an incoming full account transfer will take between 5 and 8 business days. Keep in mind, however, that this timetable will only be for taxable accounts that have all paperwork properly completed with notary stamp or medallion signature guarantee in proper fashion. Any failure to do the paperwork correctly will produce a delay.
Because Betterment will cut a check for IRA transfer requests, the process will most likely take longer for IRA transfers.
Betterment promises a turnaround time of roughly 5 to 6 business days for an incoming transfer to complete. If either broker-dealer needs more information, again this time frame could be longer.
Open Charles Schwab Account
Open Schwab Account
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