We recently onboarded a client whose U.S.-based broker dropped her after she moved to Israel, despite her being a loyal customer for 20+ years. In recent years, American brokerage firms have ended their financial relationship with clients living overseas, meaning someday you could find yourself in a similar situation. If so, what do you do next?
Many large brokerage firms in America aren’t willing to service clients who live outside of the country simply because of complicated compliance requirements. The 2001 Patriot Act introduced substantial oversight for financial firms, especially in regard to transferring funds.
If financial institutions allow money to be moved for illicit purposes, even by accident, the company might face criminal charges. Financial professionals (and their compliance officers) working in good faith with overseas clients certainly don’t want that level of risk. Rather than put themselves at risk or increase the bureaucratic procedures (and raising fees as a result of increased paperwork), they choose to part from their cross-border clients.
Talk to Your Broker
Talk to your broker immediately if you live overseas and have money in a U.S.-based account. It’s better to know what’s coming than to get blindsided by your broker at an inconvenient time (say when you’re in the middle of purchasing a property).
At Profile Investment Services, Ltd., we specialize in helping cross-border clients manage their U.S.-based accounts. We work with a U.S. broker-dealer who is familiar with the bureaucratic requirements and has systems in place for dealing with clients who live overseas. Accounts are carried by Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation. That means that all the assets are held in America, the statements are in English, and the accounts are compliant with IRS regulations. Transferring accounts is relatively simple, and normally doesn’t incur any tax-events. Working proactively allows you to maintain control over the situation, rather than reacting under pressure.
As an Israeli firm, we are also uniquely equipped to help our clients optimize their portfolios taking into consideration the fact that they are cross-border investors. Profile can open accounts for non-American residents because we have back-office systems and decades of experience that allow us to properly vet new clients and oversee their accounts.
To learn more about how we can help you meet your investment goals and manage your U.S.-based assets, reach out to us today, 02-624-2788, or sign up for a free Cross-Border Financial Evaluation at www.profile-financial.com/call.
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) 624-2788for 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 April 18, 2024.