US investement firms closing accounts for US citizens living in the UK

Due to the increased scrutiny, FACTA, etc., ,many US investment firms are closing accounts (or have already done so) of US citizens living in the UK. My accounts have to be closed and all the big brokers will not open accounts for US citizens living in the UK.  Even the UK affiliate will not open an account for me. I have been using my brother's US address with TDA, but while this has been ok and under their radar, this is not sustainable.

Does anyone know of GOOD investment broker who one can transfer existing US accounts to who does not have this restriction? I know Interactive Brokers will do this; however, their reviews are horrendous.

I know there must be others in the same situation looking for the same answer.

Thanks.......

Can you provide specifics? It seems strange for FATCA to be an issue of US firms. It is difficult to open an account without a US address, but companies like Fidelity and vanguard will certainly allow you to keep and use accounts that you already have even if you don't live in the US.

Thanks. TD Ameritrade undertook an exercise two years ago to close accounts with UK mailing addresses. I've been in the UK for 13 years up to that point with no issues. It's all around the reporting to the IRS which companies will have to do in 2014. I checked with Fidelity and Vanguard and they will not open new accounts to UK residents. I could keep my brother's address with TDA and they would not know the difference. The TDA office in London will not open an account for US citizens, even though I am a dual national due to the reporting requirements to the IRS. You may want to check all the recent info by searching on FACTA or Form 8938. The reporting requirements for US citizens abroad is only going to increase.

Interactive Brokers does allow UK residents to transfer their US accounts to them; however, reading their reviews does not fill me with any confidence which is why I want to find out if anyone knows of others.

I understand the rationale for the reporting requirements and I complete my FBAR and now Form 8938 annually. My kids have dual citizenship and it does make me wonder if it is not better for them to expatriate.

Cheers

There are several investors in the UK who foolishly invest in toxic assets such as US domiciled mutual funds and ETFs; or non-US based unit trusts, investment trusts, OEICs or ETFs.

A good IFA familiar with such issues would be able to select one of the few investment houses who are both SEC and FSA regulated; together with offering a suitable platform that can provide both US and UK tax year reporting.

There are several investors in the UK who foolishly invest in toxic assets such as US domiciled mutual funds and ETFs; or non-US based unit trusts, investment trusts, OEICs or ETFs.

A good IFA familiar with such issues would be able to select one of the few investment houses who are both SEC and FSA regulated; together with offering a suitable platform that can provide both US and UK tax year reporting.

Or you could just invest money outside of retirement accounts in the US Vanguard ETFs that are on HMRC's reporting funds list. Unfortunately this isn't an option for US citizens resident in the UK if you don't already have an account as vanguard won't open new accounts for non-US residents. So the OP's children are basically screwed when it comes to mutual fund investing so they'll have to invest in individual stocks using a UK broker that is ok with their US citizenship or pay for one of the dual registered firms.....given the outrageous fees charged by UK investment firms I wouldn't be keen on either option.

FYI US and UK compliant products are being produced by various investment firms

http://www.ftadviser.com/2011/10/25/investments/praemium-unveils-us-tax-compliant-portfolios-I6Zc90EM4IqwZhlD7N8JkK/article.html

The thing that worries me is the lack of easily available information about fees. What does it cost for the US expat to invest in such funds through an IFA? I come from a US environment where I pay an average of 0.1% annual management fee on my mutual funds and don't need to pay an advisor. Hence my interest in UK fees.

Nun, I paid £2400 to set up a relationship with a dual U.S.-U.K. qualified I.F.A. certified financial planner back in 2011; she moved all my toxic P.F.I.C. investments into a dual -compliant portfolio with 'Praemium'. 

I'm sure the fund is expensive because it has annual management charges of 2%, plus my advice advisor takes another half a percentage in its value.  However, I sense that the portfolio is well-managed, plus it produces annual statements for both the IRS and HMRC. 

I recently renounced and have received my CLN but may keep my investments with Praemium at least till my statutes of limitations have run for all my tax returns and F-bars.  I suspect that I might still find it difficult to open another investment account due to my U.S. birthplace even though I'm no longer a U.S. citizen, as I am still a U.S. person for tax purposes at least till after I've filed my final tax return and 8854 next year to officially log me out.

Nun, I paid £2400 to set up a relationship with a dual U.S.-U.K. qualified I.F.A. certified financial planner back in 2011; she moved all my toxic P.F.I.C. investments into a dual -compliant portfolio with 'Praemium'.  

I'm sure the fund is expensive because it has annual management charges of 2%, plus my advice advisor takes another half a percentage in its value.  However, I sense that the portfolio is well-managed, plus it produces annual statements for both the IRS and HMRC.  

Thanks for those numbers. As usual they are almost impossible to find on any website.

As a comparison I currently manage my own investments and just buy low cost index funds. So my total fees are around 0.1%. I hate that your IFA is paid as a percentage, it should be a one time fee. In fact the whole set up is a real rip off and this and gets me pretty angry.

If your portfolio returns 5% then your IFA's and Praemium's 2.5% fee is 50% of your annual return. If you compound that over the years it's frightening. UK fees tend to be high, but there are some low cost tracker funds available. If you are comfortable with managing your own money and no longer have a US tax liability I'd get out of your current arrangement asap. Ask you IFA what they would suggest now that you are no longer a US citizen. The answer will tell you a lot.

Just reading Praemium's service for US citizen's and there's something that worries me.

Specialist investment solutions for US citizens

Manage your US clients’ accounts with confidence. With Praemium’s US citizen service, your clients will enjoy:

dps benefits
Tax efficiency
US tax regulations compliance.
Praemium US Managed Portfolios
Maintain your US client portfolios in wrappers such as:

GIA
ISAs
SIPPs
Other pension products.

Custody and tax treatment
Praemium’s US service ensures US Citizens are never taxed twice. As all investors on the platform complete a W9 or W8-BEN form, we can differentiate tax treatments between investors. Assets are administered in Jersey via our International service.

http://www.praemium.co.uk/portfolio-management-services/specialist-investment-solutions/us-service/

Why would a US citizen need to file a W9? and W8-BEN isn't even for a US citizen.

Over the years various people at TIAA made me fill out these forms, even though I pointed out that the one wasn't for US citizens, etc. In the end, I just gave up.

However, this year, for the first time, without any discussion, TIAA agreed not to withold any tax from my pension distributions,  just like Prudential.

Over the years various people at TIAA made me fill out these forms, even though I pointed out that the one wasn't for US citizens, etc. In the end, I just gave up.

However, this year, for the first time, without any discussion, TIAA agreed not to withold any tax from my pension distributions,  just like Prudential.

I remember you saying that before. I'd love to hear how you managed that because the IRS requires them to withhold either 10% or 20% (depending on type of account) tax when income is paid to US citizens abroad. I tried to argue with them about this using Article 23 of the treaty, but got no where. But at least the fees you are paying TIAA are probably a fraction of the 2% fee on the funds bought through the Praemium platform. If you are a US citizen with US based retirement accounts invested in low cost mutual funds and also have an existing US mutual fund brokerage account where you can buy Vanguard ETFs you can invest with fees that are a fraction of those charged in the UK and also avoid the tax pitfalls of US PFIC and UK non-reporting status. If you have US based ROTHs you also have the added benefit of all gains and income being tax free in both the US and the UK.