What Assets Cannot Be Transferred Through ACATS?
The automated system that handles most brokerage transfers is remarkably efficient for standard holdings, but it isn’t universal. Some investments simply fall outside what it’s built to process.
The short answer
Certain assets generally can’t move through ACATS, including proprietary investments unique to one firm, some annuities and insurance-based products, certain limited partnerships, and a handful of other specialized or illiquid holdings. These typically require either liquidation before the transfer or a manual, non-ACATS process instead.
Proprietary and firm-specific investments
The most common category is proprietary investments: mutual funds, managed portfolios, or other products created and sold exclusively by the firm that holds the account. Because an outside brokerage typically has no way to hold or administer these products, they generally can’t move in-kind to a new firm. The usual path is liquidating the position and transferring the resulting cash, or leaving it behind at the original firm if the account holder wants to keep it.
Annuities and insurance-based products
Annuities and certain insurance-linked investment products often sit outside ACATS entirely, since they’re technically insurance contracts administered by an insurance company rather than standard securities held in a brokerage account. Moving one of these typically involves a separate process specific to the product and its issuing insurer, which can take considerably longer than a standard ACATS transfer and may involve its own set of rules or costs.
Limited partnerships and illiquid holdings
Certain limited partnerships, non-traded real estate investments, and other illiquid or thinly traded holdings can also fall outside what ACATS supports, largely because these investments don’t have the standardized pricing and settlement infrastructure that publicly traded securities do. Transferring these often requires direct coordination between the account holder, the sponsor of the investment, and both brokerage firms, a manual process rather than an automated one.
Certain retirement plan assets
Some employer retirement plan holdings, particularly employer stock held in specific plan structures or assets inside a plan with unusual restrictions, may also require a different process than a standard ACATS transfer. This is a separate situation from a typical 401(k) rollover, which usually follows its own established procedure rather than the ACATS system used for brokerage-to-brokerage moves.
What happens instead
When an asset can’t move through ACATS, the account holder is generally left with a few paths: liquidate the holding and transfer the cash instead, initiate a manual transfer directly between the two firms, or simply leave that specific holding at the original firm while everything else moves normally. Which option fits best usually depends on the type of asset, the account it’s held in, and whether an equivalent investment is available at the new firm.
It’s worth checking with the new brokerage ahead of time whether a specific holding is expected to transfer smoothly, rather than discovering a problem only once the request is already underway. Many firms can flag likely exceptions in advance, which makes it easier to plan around a holding that will need a different path from the rest of the account.
The takeaway
Most of what’s inside a typical brokerage account moves smoothly through ACATS, but proprietary products, insurance-based investments, and illiquid holdings are the recurring exceptions. Knowing which category a holding falls into ahead of time makes it easier to plan around anything that won’t make the automated trip.