I often receive calls at my office from people who say that they have a problem with their American brokerage account because their U.S. investment advisor asked them to change firms. It’s not because they don’t meet the minimum balance requirements. Rather, it’s just because they have chosen to live overseas.
For various regulatory reasons, several large investment companies in the United States have decided to stop servicing clients who live abroad, many American olim included. Stringent legislation designed to prevent terrorism, money-laundering, and other criminal activities has made it much harder for U.S. brokerage firms to deal with cross-border finance. For this reason, some firms that used to work with U.S. citizens living overseas have decided that it is no longer worth their while to do so. Despite the legislators’ intentions to hurt terrorists, many law-abiding citizens who live overseas are also feeling a negative effect from the war on terror.
If you’ve recently gotten a phone call or a letter from your mutual fund company or brokerage firm in America, don’t worry. There is a solution (other than selling your assets and transferring to Israel – an especially tax-disadvantageous move if you own American tax-deferred accounts like IRAs).
How to easily transfer your account to another American brokerage firm
Not every American brokerage firm rejects multi-nationals. Indeed, some major companies embrace the potential of overseas business. You can easily transfer your account to a company who welcomes Americans with foreign addresses. Just fill out an “account transfer form.” Within a short period of time, your old firm can simply transfer the assets to the new firm and you can continue with all of the same types of investments (and tax-beneficial accounts like IRAs) that you’ve always done. In any case, it is a good opportunity to review your investment portfolio.
If you’re not sure why your current advisor has said goodbye to you or if you want to find out how easy it would be to transfer your account to a more Israel-friendly firm, use our new interactive form.
Douglas Goldstein, CFP®️ is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published July 12, 2016. Updated September 2019