Moving a retirement account to another institution sounds like one operation. It is at least two, and the mechanics differ in ways that matter for anyone doing it.
Direct movement never touches the account holder
In a direct transfer, the funds move from one custodian to another without the account holder receiving them. Instructions go from the receiving institution to the sending one.
Because the money never leaves the retirement system, the transaction is administratively simple and the account holder's involvement ends with the paperwork.
This is the mechanism institutions generally prefer, and it is what is happening when a new provider offers to handle the move on the customer's behalf.
Indirect movement puts funds in the holder's hands
An indirect rollover distributes the money to the account holder, who then deposits it into another retirement account. The funds sit outside the system in between.
That gap carries a deadline. Rules specify a limited window in which the deposit must be completed, and missing it changes the character of the distribution entirely.
Withholding may also apply to the distribution, which means the amount received can be less than the amount that has to be deposited to complete the move.
Account types constrain what is possible
Retirement accounts come in several forms with different tax treatment, and not every combination can be moved between freely. Some moves are conversions rather than transfers.
Employer plans have their own rules layered on top, including whether a former employee may leave funds in place and what the plan permits on the way out.
Because the interaction between account types and plan rules is where most errors happen, this is territory where a tax professional's involvement is genuinely useful.
What moves and what does not
A transfer may move cash or the holdings themselves. Moving holdings in kind avoids selling and repurchasing; moving cash requires liquidation at the sending institution.
Not every holding can move in kind, since the receiving institution has to be able to hold it. Proprietary funds are the common obstacle.
Where liquidation is required, the account is out of the market for the period between sale and reinvestment, and that timing is not controllable by the account holder.
Documentation outlives the transaction
Both mechanisms generate reporting to the tax authority, and the forms describe the movement even when nothing is owed. Ignoring them because no tax resulted is a common mistake.
Statements from both institutions showing the closing and opening balances are the record that reconciles the move, and they are easiest to obtain at the time.
Since the applicable rules, windows and withholding treatments are set by regulation and revised over time, current guidance should be confirmed before any move is initiated.