[US] Lock your Fidelity and Vanguard accounts from outbound ACATS transfers
-
This text description is mine, not from the article. The article linked goes into much more detail.
This is an anti-scam/anti-fraud protection measure. This is apparently a method folks are getting their accounts cleaned out by thieves. They get your SSN, name, and account number from one of the many data breaches that happen today, they open an another account at another brokerage in your name, then transfer your funds out to the new brokerage they control. The system used to do this is called ACATS which is designed to easily let customers transfer funds from other accounts, but it is apparently easy to abuse.
Fidelity makes turning on the block crazy easy just by logging into your account and setting the "Money Transfer Lock" to "on". If you ever do want to use the ACATS to legitimately move your money to another broker, you just need to go back in here and set it to "off", complete your transfer, and turn it back "on" if you still have funds remaining.
Vanguard has this feature too, but its super sketchy to get it turned on. You have to call the vanguard agent, pass an OTP code, try to get them to understand what you're asking for as the agent I talked to did, get transferred around again a few times, do another OTP to a different department and finally they enable it. However they say it takes 5-7 days to take effect. Better than nothing I suppose.
Currently Schwab doesn't have a feature to block ACATS transfers at all in any capacity.
-
This text description is mine, not from the article. The article linked goes into much more detail.
This is an anti-scam/anti-fraud protection measure. This is apparently a method folks are getting their accounts cleaned out by thieves. They get your SSN, name, and account number from one of the many data breaches that happen today, they open an another account at another brokerage in your name, then transfer your funds out to the new brokerage they control. The system used to do this is called ACATS which is designed to easily let customers transfer funds from other accounts, but it is apparently easy to abuse.
Fidelity makes turning on the block crazy easy just by logging into your account and setting the "Money Transfer Lock" to "on". If you ever do want to use the ACATS to legitimately move your money to another broker, you just need to go back in here and set it to "off", complete your transfer, and turn it back "on" if you still have funds remaining.
Vanguard has this feature too, but its super sketchy to get it turned on. You have to call the vanguard agent, pass an OTP code, try to get them to understand what you're asking for as the agent I talked to did, get transferred around again a few times, do another OTP to a different department and finally they enable it. However they say it takes 5-7 days to take effect. Better than nothing I suppose.
Currently Schwab doesn't have a feature to block ACATS transfers at all in any capacity.
You have to call the vanguard agent
Every millennial / Gen-Z person is not going to do this and get their money stolen. Why do companies do this?? It'd be more secure to even do this over live chat for a logged in session if they can't be bothered to add this to the account settings page.
-
You have to call the vanguard agent
Every millennial / Gen-Z person is not going to do this and get their money stolen. Why do companies do this?? It'd be more secure to even do this over live chat for a logged in session if they can't be bothered to add this to the account settings page.
Its slightly worse than you may think. Prior to about a year ago there were no mechanisms available to block this type of attack from a thief from any of the big three brokerages. I give a lot of credit to Fidelity for not only developing a tool, but making it easily user accessible through the customer's web session.
Six months ago Vanguard also had no mechanism. However between then and now, they've at least developed a process on the backend to put the functionality in place, but they have yet to make a tool that can enable it from the customer's web session. So while its a bother to call in (and many Vanguard agents don't know about it yet like the one I initially talked to), I appreciate there is an avenue to put the block on now instead of just hoping and praying the theft doesn't happen to you. I fully expect Vanguard to make accessing the tool much easier to turn it on an off in the near future.
Schwab hasn't even built an internal tool yet, so phone call or not, all those customers are still at risk.
-
This text description is mine, not from the article. The article linked goes into much more detail.
This is an anti-scam/anti-fraud protection measure. This is apparently a method folks are getting their accounts cleaned out by thieves. They get your SSN, name, and account number from one of the many data breaches that happen today, they open an another account at another brokerage in your name, then transfer your funds out to the new brokerage they control. The system used to do this is called ACATS which is designed to easily let customers transfer funds from other accounts, but it is apparently easy to abuse.
Fidelity makes turning on the block crazy easy just by logging into your account and setting the "Money Transfer Lock" to "on". If you ever do want to use the ACATS to legitimately move your money to another broker, you just need to go back in here and set it to "off", complete your transfer, and turn it back "on" if you still have funds remaining.
Vanguard has this feature too, but its super sketchy to get it turned on. You have to call the vanguard agent, pass an OTP code, try to get them to understand what you're asking for as the agent I talked to did, get transferred around again a few times, do another OTP to a different department and finally they enable it. However they say it takes 5-7 days to take effect. Better than nothing I suppose.
Currently Schwab doesn't have a feature to block ACATS transfers at all in any capacity.
I'm still salty that I have schwaub, only because they bought the brokerage I was using..dick holes.
-
I'm still salty that I have schwaub, only because they bought the brokerage I was using..dick holes.
On the plus side, ACATS is the feature/technology that makes moving brokerages so easy. I've got an account move in flight right now, and it took all of about 10 minutes to initiate. If you want out of Schwab you can probably ditch them if you like. If you're holding securities (stocks, bonds, etc), as long as they are transferable you can do an in-kind transfer (so the security never get sold to cash) and therefore there's no taxable event during the transfer.