I recently transferred my Roth from Schwab to M1 and ran into a transfer issue with OTC securities. I'm simplifying/optimizing my investments and M1 is the perfect solution for my Roth since I'm still contributing and I really like the auto-rebalancing functionality of M1. Mostly this went OK EXCEPT I had some BYD stock (BYDDF) which is an OTC security trading on the Hong Kong exchange in my Schwab Roth. What I should have done was to sell-off my BYDDF position FIRST (which was small and in the money so I didn't really care) before I initiated the broker transfer at M1. When you have unsupported OTC positions and you transfer them to M1, M1 will hold them outside of your "pie". If you're lucky it's one of the few OTC securities they support (in which case you can sell them at market). Here is their supported list of OTC securities:
https://help.m1.com/hc/en-us/articles/5 ... Securities
If you're unlucky (like I was) then M1 gives you three options:
1) Initiate a partial ACATS from another broker which supports the OTC security (i.e. transfer the position from M1 to another broker).
2) Have M1 liquidate your entire position for 1 cent (yes, that's right). Um...Pass.
3) Keep the unsupported security outside of your pie at M1 (indefinitely). If it's outside your pie it's useless.
Obviously the only sensible option above is to ACATS it out to another broker. So I had to open a new Roth at Schwab and then do a partial ACATS for the BYD position (easily done using Move Money from Schwab). ACATS is slow so this is like a 5-7 day process but it should work OK. Then liquidate the OTC security from a brokerage that supports it (or keep it there) and then ACATS the cash back to M1 (initiate from the M1 side).
All told a series of machinations I didn't need to do in the first place. Oh well - live and learn!
https://help.m1.com/hc/en-us/articles/5 ... Securities
If you're unlucky (like I was) then M1 gives you three options:
1) Initiate a partial ACATS from another broker which supports the OTC security (i.e. transfer the position from M1 to another broker).
2) Have M1 liquidate your entire position for 1 cent (yes, that's right). Um...Pass.
3) Keep the unsupported security outside of your pie at M1 (indefinitely). If it's outside your pie it's useless.
Obviously the only sensible option above is to ACATS it out to another broker. So I had to open a new Roth at Schwab and then do a partial ACATS for the BYD position (easily done using Move Money from Schwab). ACATS is slow so this is like a 5-7 day process but it should work OK. Then liquidate the OTC security from a brokerage that supports it (or keep it there) and then ACATS the cash back to M1 (initiate from the M1 side).
All told a series of machinations I didn't need to do in the first place. Oh well - live and learn!
Statistics: Posted by mbouck — Tue Feb 06, 2024 3:21 pm