club_cafe: Withdrawal questions

iras1 on

In a message dated 3/25/2007 4:01:13 P.M. Eastern Daylight Time, cpapke@mindspring.com writes:

We have a member withdrawing next month. Three questions:

1. I understand that we can transfer stock with the signature of one club
member, does that member need to have a medallion signature guarantee? If
so, does that come from our broker?

It's your broker who decides whether it requires a medallion signature. If so, you can get it at any broker, it doesn't have to be your own.

2. The withdrawing member has an account with a different broker than the
one the club uses. How difficult would it be to transfer stock to her
existing account? Or should the club require her to open an account with
the club's broker?

That's up to your club's broker. Many will not transfer stock to an account at another broker that isn't titled the same as the one at its brokerage. The solution is to have the member open an account at the club's brokerage, transfer the stock to that account, then the withdrawing member can transfer the stock from her new account at the club's brokerage to her account elsewhere.

3. About how long will it take for the stock to transfer after the broker
has received notification? (We use TD Ameritrade.)

It could be anything from several days to several weeks. However, there is another wrinkle with TD Ameritrade. If your club's account was a TDWaterhouse account, they are only opening new accounts at TDAmeritrade and ex-TDW accounts are considered a different brokerage than the TDA accounts. If this applies to your club, get talking to a supervisor at TDAmeritrade now so that you can request special review of the transfer request. Otherwise they will suggest having both the club and the withdrawing member open new accounts and make transfers from old club account to new club account to member account.

Ira Smilovitz

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