Transferring Funds from one brokerage to another

I am considering changing brokerages for reasons. And from what I can tell online transfers are pretty easy I am a bit concerned about the brokerage specific index funds I have. I have Schwab funds and I’m unsure what happens when they are transferred to Fidelity. Do they directly transfer so that I end up paying a transaction fee when I sell them. Or do they convert to an equal fidelity fund?

Also when is the best time to make the change? At least for schwab the dividends come at the end of the year and I believe I had to have held the funds for X amount of time before qualifying for dividends (maybe I’m wrong) if I’m not wrong would it be best to make the change at the beginning of the year?


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Regarding the funds transferring, I think it depends on the funds and the brokerage. I’d probably call Fidelity and ask them. Even if the funds transfer, you’ll likely end up in a place where there’s a transaction fee to buy more or sell those funds. So you’re probably going to at least want to start investing in new Fidelity-friendly funds after the transfer. If this is inside a tax-advantaged account, I’d just bite the bullet and switch everything over to the new funds. If it’s a taxable account you might want to at least make the decision with some input from a tax advisor if we’re dealing with significant numbers.

Regarding the timing, I highly doubt it matters. If you can bounce around between brokerages and funds to get more dividends, people would definitely do that. But you could ask that of a Fidelity rep as well.

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