In June, and again in August 2021, US brokerage firm Wells Fargo sent letters to many of its clients living outside the USA saying that they need to move their accounts to another brokerage firm by the end of September 2021. The letter states in part that “Wells Fargo Advisors is exiting the international business segment” and that after September 30, 2021 the accounts will be moved away from the client’s advisor to their “International Centralized Group” service center and will be restricted to liquidating or closing transactions.
Several years ago Charles Schwab, Fidelity, and Merrill Lynch, among others, sent similar letters to their clients living outside the USA. This continues a multi-year trend of US brokerage firms closing accounts for non-US residents as a result of increasing compliance burdens associated with tax initiatives such as FATCA and regulations such as the EU GDPR and PRIIPs.
PRIIPs regulation is especially troublesome for US citizens living in Europe since it effectively bars them from investing in US mutual funds or exchange-traded funds. At the same time US taxpayers do not want to use non-US funds because they would be considered PFICs under US tax law and subject to expensive and complicated tax reporting.
Since 2002, our firm has specializing in investment management and financial planning services for Americans living abroad. International Asset Management (IAM) is a US Registered Investment Advisor with clients in over 35 countries. Our US citizen clients living abroad benefit from US tax-compliant portfolios that avoid PFIC issues and are customized for their investment profiles.