Leaving a Large Brokerage Firm? What to Know Before You Move

If you are considering a move from a large brokerage firm, start with three questions: What advice do I need? What do I actually pay? What would changing advisers involve?

This guide explains what to compare, how compensation and duties differ, and which holdings and account details need review before you authorize a transfer. A change should make sense for your circumstances, not just look attractive in a fee illustration.

Considering a move? Talk with Todd about your current costs, holdings and the questions to resolve before transferring accounts.

What is the difference between a wirehouse and a fee-only fiduciary?

A wirehouse is a large national brokerage firm, such as Morgan Stanley, Merrill Lynch, or UBS. These firms offer brokerage and advisory services. Integrity Financial Planning is an independent, fee-only fiduciary: clients pay us for investment management and personal financial planning, not for selling investment or insurance products.

That difference shapes the rules your advisor follows:

• In a brokerage account, a broker's recommendations fall under Regulation Best Interest. The SEC says brokers must act in your best interest "at the time the recommendation is made" (SEC).
• A registered investment adviser owes a fiduciary duty that, in the SEC's words, "applies to the entire relationship" between the adviser and the client (SEC).

Wirehouse advisory accounts are also held to a fiduciary standard. Understand the capacity in which the person is acting and how the firm is compensated. Fee-only compensation does not mean an adviser has no conflicts; ask every adviser to explain the conflicts in their disclosures.

What do Morgan Stanley, Merrill, and UBS charge?

Programs and negotiated terms differ. Review your current account documents rather than treating a firm's advertised or maximum fee as your own cost.

Program disclosure resources: Morgan Stanley Select UMA, Merrill Lynch Investment Advisory Program, and UBS wrap programs. Check the date and program before relying on a document; these links are not a quote of your current charges.

Do not add a charge twice if it is included in a wrap fee. Ask whether cash is billed, what rate it earns, and whether transfer or termination charges would apply.

If you are approaching retirement or already drawing income, review costs alongside retirement and withdrawal decisions, not in isolation.

Do fee-only fiduciaries cost less?

A fee-only adviser is not automatically less expensive. Compare your current advisory fee, investment expenses and any other applicable charges with the fees and services proposed for your accounts. Our published schedule gives you a starting point; the relevant comparison is what you actually pay.

Hypothetical annual cost comparison, not evidence of typical brokerage charges or guaranteed savings. The brokerage scenario assumes a 1.50% total annual cost. The IFP scenario uses the published advisory tiers plus an assumed 0.05% annual fund expense rate; actual investment expenses vary by allocation. The IFP figures exclude optional Altruist active tax management, which costs up to 0.10% annually on enrolled taxable assets, and other applicable charges.

If optional tax management were enrolled on the entire hypothetical balance at its maximum charge, it would add $1,000, $2,500 or $5,000 a year respectively, reducing the illustrated differences. In practice it applies only to enrolled taxable assets; IFP receives no part of that charge.

These are cost calculations, not forecasts of investment returns or a recommendation to change advisers. Fees are one consideration alongside the advice, investments and service you receive.

For clients with assets under management under $500,000, the Advisor reserves the right to charge an hourly fee for financial planning.

How can you judge the quality of advice?

That depends on the advisor, not the logo. Instead of taking anyone's word for it, look for things you can verify:

• Experience on both sides. Todd Smurl, CFA, spent 30 years managing portfolios, including roles at Goldman Sachs Personal Financial Management and Bank of America's Private Bank, before founding the firm. You can read his background on the Todd Smurl page.
• No products to sell. We earn no commissions, sales loads, or revenue sharing.
• Planning is included. Personal financial planning, including retirement income, Social Security, and estate coordination, is included in the investment management fee. See financial planning. For clients with assets under management under $500,000, the Advisor reserves the right to charge an hourly fee for financial planning.
• Tax-aware investing. Our Personal Index Portfolios hold individual stocks in place of a large-cap fund, which can reduce fund-level capital gains distributions and makes tax-loss harvesting possible in taxable accounts. Learn why direct indexes can be more tax-efficient than ETFs.

Active tax management is optional and applies to taxable accounts only. Altruist, our custodian, charges up to 0.10% per year on the enrolled assets for its tax-management tool, separate from our advisory fee; Integrity Financial Planning receives no part of it.

How do I move my accounts without selling everything?

You may be able to move eligible holdings without selling them. Before recommending a transfer, we review the account type, the receiving custodian's ability to hold each investment, existing gains and any applicable charges. Holdings that cannot transfer need a separate decision; a sale is not automatically the only option.

1. Review. Identify holdings, account registration, available cost-basis records and any transfer restrictions.
2. Agree on the route. Determine which assets the receiving custodian can hold and what should remain or receive separate handling before authorizing the move.
3. Authorize the transfer. Eligible brokerage transfers may use ACATS; other account types and assets can need different instructions. FINRA Rule 11870 sets out procedures and exceptions.
4. Review after arrival. Check the holdings and available basis records before agreeing on any portfolio changes, including the risks of selling or retaining existing positions.

Separate the account types. Moving eligible taxable holdings in kind, transferring an IRA between trustees and rolling assets out of an employer plan are different transactions. A distribution paid to you, an account-type change or a Roth conversion can have tax consequences. Review the route before giving instructions; see the IRS explanation of transfers and rollovers.

Watch for nontransferable holdings. Options can include retaining an asset at the current firm, another suitable arrangement or a sale, depending on the asset and account. Evaluate taxes, charges and other consequences rather than assuming liquidation is required (FINRA Rule 11870(c)).

Do not plan around a guaranteed completion date. Timing depends on the accounts, holdings and any exceptions. We explain the expected process and flag items that need separate handling before you authorize a move.

Questions to ask your current advisor

Whether you stay or go, these questions show you what you are paying and who your advisor works for:

• What is my total annual cost, including the advisory fee, manager fees, platform fees, and fund expenses, in dollars?
• Is my account a brokerage account, an advisory account, or both?
• Is my cash included in the advisory fee, and what rate does it earn?
• Do you or the firm earn anything from the funds or products in my account?
• Do any of my holdings fail to transfer to another firm?
• Who prepares my financial plan, and how often is it updated?

If an answer is vague, that is useful information too. Our article on mistakes to avoid when choosing a financial planner covers more questions to ask.

Ready to compare?

Start with a free, no-obligation conversation with Todd about your goals, your current advice and what you would like to change. If it makes sense to continue, we’ll agree on the information needed to review your accounts and explore next steps.

Schedule an introductory meeting with Todd Smurl, CFA. We work with retirees and pre-retirees in Houston and across the country.

This article is educational, not individualized investment, tax or legal advice. The cost table uses assumptions, not typical fees or an account quote; it excludes optional active tax management and other applicable charges. Actual fees, returns and tax results vary and are not guaranteed. A transfer can involve charges, restrictions or tax consequences. See our published fees and Form ADV Part 2A for full fee terms. Morgan Stanley, Merrill Lynch and UBS are trademarks of their respective owners and are not affiliated with Integrity Financial Planning.