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Major U.S. Brokerage Firms Are Closing Foreign-Owned Accounts

Many people who are living abroad but who have U.S. investment accounts have recently been receiving an unpleasant notice from their account custodian that their accounts are being closed and must be moved. This is true no matter whether the person is a U.S. citizen or permanent resident (Green Card holder), or a non-resident alien for U.S. tax purposes. Many affected people are wondering what is behind this, and what can I do to fix the problem? Unfortunately, the solution to the problem is not so easy in today’s world.

 

Recently financial institutions have been weighing the profitability of foreign client relationships against the compliance risk, and many have decided that the increased reporting scrutiny and regulatory costs are not worth the relationship. As a result many institutions are refusing to open new accounts with foreign addresses in countries such as France, The Netherlands, the United Kingdom, Australia and New Zealand, Singapore, and many more. We’ve been surprised to see a substantial increase in this over just the past few months.

 

Some of these institutions are even going as far as terminating existing relationships and forcing account closures. This is putting many expats and cross-border individuals at risk of having their assets sold and distributed to them, thus causing unwanted tax implications and the forced sale of viable investments. Many of these investors are being pushed into finding creative ways to find a new home for their investments to avoid these unwanted consequences.

 

We have recently heard that brokerages and custodians such as Merrill Lynch, Charles Schwab, Fidelity Investments, Morgan Stanley, and Wells Fargo are all turning away new clients with international addresses and many have been sending client termination notices with a firm deadline of when their accounts and investments will be terminated and distributed to them.

If you are running into any of these issues or fear that your investments may be at risk, Worldview Wealth Advisors is here to provide solutions to help. If you are currently living abroad or have a non-U.S. address with investments held in the U.S. please call 1-800-237-9004 to discuss how we may be of help.