As a result of the Patriot Act, regulations were enacted that have made it difficult for U.S. investment firms to work overseas. Many firms have chosen to close down their operations outside the United States rather than adjust their compliance procedures. In fact, people living outside America have been receiving termination letters from companies like Wells Fargo, Merrill Lynch, and Morgan Stanley, just because of their foreign address.
The decision to stop servicing accounts doesn’t relate to citizenship issues. Rather, if the client isn’t on American soil, the broker may choose to restrict or close the account.
Company rules can harm clients
Big companies need to create rules that dictate how their business will run. These rules always have the company’s bottom line in mind, not their customer’s satisfaction. Recently I went to a large office supply store to buy a dozen black chairs for my office. Though they didn’t have the model in stock, they offered to order them. The only problem was that their system couldn’t place an order for twelve black chairs, but could order blue. When I explained that I didn’t want blue chairs, the salesman said not to worry. I could order them in blue, pay for them, and then come back a week later and switch my order to black.
“I’m sorry,” I said. “If you can’t service me in a reasonable fashion, I’ll go elsewhere.” Then, I walked into a small store, told the owner what I wanted, and received excellent service. In fact, three days later, I’m sitting in a brand new black chair.
Investments and chairs: the same thing?
My office is very busy servicing clients whose large American brokerage firms chose not to handle overseas accounts. Since we specialize in investment portfolios of Americans living overseas, we’ve been like the smaller furniture store described above: servicing clients to ensure they get what they want, where they want, and when they want. When handling your investments (and buying chairs), make sure that you get the level of service and respect that you deserve.
For more about what to do if your U.S. brokerage firm no longer wants to work with you, read this: Profile-Financial.com/WF-overseas.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published September 8, 2014. Updated August 2021