In recent years, Fidelity Investments has increasingly limited its ability to serve US citizens living abroad. While the firm does not always outright close accounts, many expats experience progressive restrictions that effectively freeze their ability to invest, and in some cases, relationships are terminated altogether.
Fidelity’s official policy on expats
Fidelity’s publicly disclosed policy is:
- The firm does not open new accounts for individuals residing outside the United States
- Existing clients who move abroad may keep accounts but with significant limitations
Once a client becomes a non-US resident, Fidelity may impose the following restrictions:
- No new account openings
- No additional deposits in some cases
- Mutual fund purchases prohibited
- Contributions to tax-advantaged accounts (e.g., HSAs, 529s) must stop
- Margin, options, and advisory services may be terminated
- Managed account relationships can be closed
In more restrictive jurisdictions, clients may be limited to “liquidation-only” status, meaning they can sell holdings but cannot buy new securities or reinvest funds .
Why does Fidelity restrict or freeze expats’ accounts?
Fidelity’s approach reflects a broader industry shift. According to financial industry analysis, many US brokerage firms, including Fidelity, have reduced or eliminated expat clients due to compliance risk and regulatory burden .
The main drivers for closing expats’ accounts are:
- Anti-money laundering (AML) and tax compliance requirements
- Difficulty verifying income sources for clients abroad
- Complex reporting obligations under international agreements
- Country-specific financial regulations (e.g., EU MiFID rules)
Rather than manage these complexities across dozens of jurisdictions, many firms choose to limit or exit relationships with non-US residents entirely.
Gradual restriction for expats with Fidelity accounts
Unlike some firms that send direct closure notices, Fidelity often uses a gradual restriction model.
Clients may initially retain their accounts but lose key capabilities:
- Unable to purchase mutual funds or certain ETFs
- Unable to add new funds
- Loss of advisory support
- Restricted trading functionality
Over time, this can leave expats with accounts that are operationally unusable for long-term investing, prompting many to transfer assets elsewhere.
In some cases, particularly involving managed accounts or specific product types, relationships may be terminated outright.
Country-specific treatment
Importantly, Fidelity’s policies are not uniform worldwide.
Restrictions depend on your country of residence, the local regulatory environment where you live, and Fidelity’s internal compliance thresholds.
Some expats may retain limited functionality, while others face full trading restrictions or forced changes to their account structure.
This lack of transparency makes it difficult for expats to predict outcomes before moving abroad.
What can US expats do?
Attempting to maintain a US address while living abroad may violate terms and lead to account freezes or closures if discovered.
Fidelity is not alone, as its policies reflect a broader trend across the US financial industry. While accounts are not always immediately closed, the restrictions placed on expat clients often amount to a de facto freeze.
Do not assume your Fidelity account will function normally after moving abroad. Even if accounts remain open, the inability to buy new investments severely limits portfolio management. Planning ahead, ideally before relocation abroad, is the best strategy to avoid disruption to your investment strategy.
Your best option if faced with your Fidelity brokerage account closing when you move overseas is to transfer your assets to an expat friendly broker.
Talk to an expat specialist financial advisor to discuss your situation, and they will walk you through your options.
At IAM Advisors, we have specialized in investment management and financial planning for US expats since 2002 and over 80% of our clients are Americans living outside the USA. We have helped hundreds of US expats invest compliantly and within the context of their long term plans and goals.
If you have any questions about financial planning as an American living abroad, get in touch.
This article is for informational purposes only; it is not intended to offer advice or guidance on legal, tax, or investment matters. Such advice can be given only with full understanding of a person’s specific situation.
