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How to Close an LPL Financial Account: A Comprehensive Guide

So, you’ve decided to part ways with LPL Financial. Whether you’re consolidating assets, seeking different investment strategies, or simply found a better fit elsewhere, closing your account requires a systematic approach. This guide will walk you through the process, ensuring a smooth and efficient transition. Closing an LPL Financial account involves submitting a formal request, either through written notification or by completing LPL’s specific account closure form. You’ll then need to decide how you want your assets distributed – transferred to another institution, liquidated and sent as a check, or a combination of both.

Understanding the Account Closure Process

Closing a financial account isn’t just about signing a form; it’s about carefully considering the implications and executing the necessary steps with precision. Here’s a breakdown of what to expect.

Initial Assessment and Planning

Before initiating the closure, take stock of your assets held within the LPL account. This includes stocks, bonds, mutual funds, ETFs, and any cash balances. Determine your preferred method for asset distribution well in advance. Will you transfer everything in-kind to another brokerage, liquidate the holdings and receive a check, or a combination of these approaches? Tax implications also come into play; liquidating investments may trigger capital gains taxes. Consult with a tax advisor to understand the potential impact.

Initiating the Closure Request

The formal process begins with notifying LPL Financial of your intent to close the account. While you can often do this through your financial advisor, it is essential to understand LPL’s preferred method of receiving closure requests. The options include:

Written Notification: A formal letter stating your account number, intent to close the account, and your preferred method of asset distribution. Sign and date the letter.
LPL Account Closure Form: LPL may have a specific form designated for account closures. Obtain this form from your financial advisor or potentially from LPL’s website. This form is the most structured and efficient method.

Completing the Necessary Paperwork

Regardless of the method, the closure request must include critical information:

Account Number: This is paramount for accurate identification.
Full Name(s) of Account Holder(s): Ensure the names match the account registration.
Contact Information: Provide a current phone number and address for communication.
Distribution Instructions: Be explicit about how you want your assets handled. If transferring to another institution, include the receiving institution’s name, address, account number, and any specific transfer instructions. If liquidating, specify the payee name and address for the check.
Signature(s): All account holders must sign the closure request.

Asset Transfer and Liquidation

Once the request is received and processed, LPL will execute your distribution instructions.

In-Kind Transfer (ACAT): If you opted for an Automated Customer Account Transfer Service (ACATS) transfer, LPL will initiate the transfer of your assets to the receiving institution. This process usually takes 5-10 business days. Keep in mind that not all assets are transferable; some mutual funds or alternative investments may require liquidation.
Liquidation and Check: If you chose to liquidate your assets, LPL will sell your holdings at the prevailing market prices. The proceeds, less any fees or taxes, will be issued in the form of a check mailed to your designated address. Note that market fluctuations can impact the final amount you receive.

Account Reconciliation and Confirmation

After the transfer or liquidation is complete, carefully review your final statement from LPL Financial. This will confirm that all assets have been properly transferred or liquidated and that the account balance is zero. Verify that all transactions match your expectations. If you spot any discrepancies, contact LPL immediately.

Follow Up

Keep communication open to avoid potential delays. Proactively contact your LPL financial advisor or LPL Financial’s customer support to track the progress of your account closure request and be sure to follow up regularly.

Frequently Asked Questions (FAQs)

Here are some common questions and answers related to closing an LPL Financial account:

1. Can I close my LPL Financial account online?

While LPL Financial may offer some online account management tools, account closures typically require a formal written request or a completed account closure form, which may need to be submitted via mail or through your financial advisor. It’s always best to check with LPL directly about their current procedures.

2. How long does it take to close an LPL Financial account?

The timeframe varies depending on the method of asset distribution. An ACAT transfer typically takes 5-10 business days. Liquidation can add a few more days, depending on the complexity of your portfolio and the volume of trading required.

3. Are there any fees associated with closing an LPL Financial account?

LPL Financial may charge fees for specific transactions, such as transfer fees or early withdrawal penalties on certain investments. Review your account agreement and consult with your advisor to understand any potential fees.

4. What happens to my recurring investments if I close my account?

You must cancel any recurring investment plans before closing your account to prevent further transactions. Failing to do so could complicate the closure process.

5. Can I close my account if I have a negative balance?

No, you must resolve any negative balances before LPL Financial will process your closure request. Ensure your account is in good standing before initiating the closure.

6. What happens to my dividend payments during the closure process?

Dividends earned during the closure process will be included in the final account balance and distributed according to your instructions.

7. Can I transfer only some of my assets to another brokerage?

Yes, you can request a partial transfer of assets. Specify which assets you want transferred and which should remain in the account (or be liquidated).

8. What if I change my mind after submitting the closure request?

Contact LPL Financial immediately to revoke the closure request. It may be possible to halt the process if it hasn’t progressed too far.

9. What if I am closing the account of a deceased person?

Closing an account after someone passes away requires additional documentation, such as a death certificate and potentially legal documents proving your authority to act on behalf of the estate. Contact LPL Financial’s estate settlement department for specific guidance.

10. How do I find my LPL Financial account number?

Your account number can be found on your account statements, online portal, or by contacting your financial advisor.

11. What happens to my tax documents after I close my account?

LPL Financial will continue to provide you with required tax documents (e.g., 1099 forms) for the tax year in which the account was closed. Ensure LPL has your correct address for mailing these documents.

12. What if I have a financial advisor associated with my LPL account? Should I inform him or her of my intent to close my account?

Yes, it is professionally courteous and beneficial to inform your financial advisor of your intention to close your account. They can help facilitate the process, answer questions, and potentially offer solutions to address your concerns that led to your decision. It also helps to maintain a professional relationship.

Closing an LPL Financial account is a straightforward process, but it requires attention to detail and careful planning. By following these steps and addressing any potential questions proactively, you can ensure a smooth and efficient transition. Remember to consult with your financial advisor and tax professional for personalized advice based on your specific circumstances.