Need brokerage advice, US person living abroad

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john77
Posts: 53
Joined: Fri Aug 17, 2012 6:15 am

Need brokerage advice, US person living abroad

Post by john77 » Tue Oct 16, 2018 5:38 pm

My wife has a unique situation.

We both are residing abroad in the European Union with intentions of returning to the US in a few years. While I’m a US citizen and we were married while we both were living in the US, my wife is not a citizen, although she is a US person (resided legally with green card in US fulltime from 1989-2010, social security number, owned property, etc.). I even file our US taxes each year as married/filing jointly.

She currently has her investments at Baird in the US, who is now telling her she's no longer able to keep them there due to some new Baird policy that requires her to be a US citizen or have US residency.

She has a couple of brokerage accounts and also an IRA, which was rolled over from an old 401K when she was working in the US. Baird has now really started to push this and will end up closing out her accounts if she doesn't do anything. It's an incredibly ridiculous situaiton that she is basically going to be forced to cash out the IRA and suffer all the penalties due to these ridiculous internal policies.

Can anyone recommend to me any of the brokerages that would allow her to move her current brokerage accounts and the IRA?

Pancho
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Joined: Sun Jan 28, 2018 6:39 pm

Re: Need brokerage advice, US person living abroad

Post by Pancho » Tue Oct 16, 2018 7:13 pm

You might want to check Schwab International or Interactive Brokers.

typical.investor
Posts: 351
Joined: Mon Jun 11, 2018 3:17 am

Re: Need brokerage advice, US person living abroad

Post by typical.investor » Tue Oct 16, 2018 7:54 pm

john77 wrote:
Tue Oct 16, 2018 5:38 pm
She has a couple of brokerage accounts and also an IRA, which was rolled over from an old 401K when she was working in the US. Baird has now really started to push this and will end up closing out her accounts if she doesn't do anything. It's an incredibly ridiculous situaiton that she is basically going to be forced to cash out the IRA and suffer all the penalties due to these ridiculous internal policies.

Can anyone recommend to me any of the brokerages that would allow her to move her current brokerage accounts and the IRA?
As suggested, try Schwab International. It depend on your current country of residence's laws whether Schwab can accept a client from there, but if they can, you'll be able to transfer things over. IB is good too but not as helpful with customer service (they expect people to be experienced traders) and has a monthly minimum commission fee if holdings are under $100k.

Note: For Schwab, residents of the UK, Ireland, France, Italy, Netherlands, Austria, or Sweden use the UK branch.
http://international.schwab.com/public/ ... intro.html

Or just give them a call.

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galeno
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Re: Need brokerage advice, US person living abroad

Post by galeno » Tue Oct 16, 2018 8:06 pm

I'm under the impression that Schwab International is for USA-NRAs.

I believe a US person would use regular USA Schwab. No?

We use to use Schwab International. Now we use Interactive Brokers.
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

typical.investor
Posts: 351
Joined: Mon Jun 11, 2018 3:17 am

Re: Need brokerage advice, US person living abroad

Post by typical.investor » Tue Oct 16, 2018 8:11 pm

galeno wrote:
Tue Oct 16, 2018 8:06 pm
I'm under the impression that Schwab International is for USA-NRAs.

I believe a US person would use regular USA Schwab. No?
No. US citizens use Schwab International as well.

Residents (including Americans) of other countries are not supposed to purchased mutual funds traded on US exchanges by regulation.

So unless you have a US address to use, US persons (green card holders, citizens) would use Schwab international too which is set up to comply with international regulations.

TedSwippet
Posts: 1867
Joined: Mon Jun 04, 2007 4:19 pm

Re: Need brokerage advice, US person living abroad

Post by TedSwippet » Wed Oct 17, 2018 5:26 am

john77 wrote:
Tue Oct 16, 2018 5:38 pm
We both are residing abroad in the European Union with intentions of returning to the US in a few years. While I’m a US citizen and we were married while we both were living in the US, my wife is not a citizen, although she is a US person (resided legally with green card in US fulltime from 1989-2010, social security number, owned property, etc.). I even file our US taxes each year as married/filing jointly.
This suggests that your wife has lived outside the US for eight years. In that case, you might want to be prepared for immigration hurdles on your planned return to the US.

The US can consider a green card abandoned after six months of non-US residence, although by using 're-entry permits' this can be extended this to a maximum six years in total. This is less than the apparent eight years in the dates above. More in this article: https://www.natlawreview.com/article/ho ... ing-abroad

There may be a workround for spouses of US citizens who are employed abroad by a US company, but guarantees appear thin on the ground. Details here: http://lawandborder.com/lpr-living-with ... andonment/

In practice, if her green card is now considered abandoned, as the spouse of a US citizen she should not have too many problems in obtaining a new one. The usual bureaucratic run-around and expense, but probably no special issues. More problematic may be how to unravel all of that tax-wise. For example, you cannot file US taxes as married filing jointly if your spouse is a non-resident alien at any time during the tax year. You may want to check your own situation carefully on your wife's 'US person' status, then. (You may be okay tax-wise here, but only because the US applies double standards to its immigration and tax policies that means they are not tightly coupled -- the first is implemented to be as exclusive as possible, the second to be as inclusive as possible).

As for brokerages... good ideas upthread, and I don't have anything more to add. Beyond this, if it were me I might next consider starting to move the IRA assets to a Roth account. That way, if the worst does occur and you have to withdraw from them fully you might, if you can get the timing right, at least avoid any added 10% early withdrawal penalty that would apply if below age 59.5.

Finally, good luck in resolving this. Do please report back if you find a good way around this (or if you don't). That will help others with similar problems in future. As a US non-resident alien currently holding an IRA and a 401k at Vanguard, each time I encounter a report of an issue such as this I feel incrementally more vulnerable to the threat posed by the increasing tide of poorly thought-out and overbearing US financial laws and regulations.

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galeno
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Joined: Fri Dec 21, 2007 12:06 pm

Re: Need brokerage advice, US person living abroad

Post by galeno » Wed Oct 17, 2018 12:49 pm

We (USA-NRAs) were with Schwab International for 18 years (1995-2014). No USA address. We used USA domiciled ETFs from Schwab for equities. We never attempted to buy any REGULAR mutual funds.

For our FI allocation we used USA FDIC insured CD from US banks (no 30% USA-NRA taxes on interest income). We made sure to keep our MMF below $60K.

Since 2015 we've been with Interactive Brokers which gives us access to other stock exchanges other than USA exchanges.
typical.investor wrote:
Tue Oct 16, 2018 8:11 pm
galeno wrote:
Tue Oct 16, 2018 8:06 pm
I'm under the impression that Schwab International is for USA-NRAs.

I believe a US person would use regular USA Schwab. No?
No. US citizens use Schwab International as well.

Residents (including Americans) of other countries are not supposed to purchased mutual funds traded on US exchanges by regulation.

So unless you have a US address to use, US persons (green card holders, citizens) would use Schwab international too which is set up to comply with international regulations.
AA = 40/55/5. Expected CAGR = 3.8%. GSD (5y) = 6.2%. USD inflation (10 y) = 1.8%. AWR = 4.0%. TER = 0.4%. Port Yield = 2.82%. Term = 33 yr. FI Duration = 6.0 yr. Portfolio survival probability = 95%.

john77
Posts: 53
Joined: Fri Aug 17, 2012 6:15 am

Re: Need brokerage advice, US person living abroad

Post by john77 » Mon Oct 22, 2018 2:32 pm

Many of you mentioned Charles Schwab International. Thanks for the tip but we checked with them and unfortunately we're in one of the few EU countries that they don't work with due to my resident country's laws and regulations. Ugghhhhh, I sometimes wonder what I'm still doing here :/

Any other suggestions? Someone here mentioned Interactive Brokers but we just aren't knowledgeable enough to go into something like that one without having a broker walk us through it. Everything I've heard about Interactive Brokers is that it's recommended we don't go into it as amateurish as myself and my wife are.

typical.investor
Posts: 351
Joined: Mon Jun 11, 2018 3:17 am

Re: Need brokerage advice, US person living abroad

Post by typical.investor » Tue Oct 23, 2018 12:58 am

john77 wrote:
Mon Oct 22, 2018 2:32 pm
Many of you mentioned Charles Schwab International. Thanks for the tip but we checked with them and unfortunately we're in one of the few EU countries that they don't work with due to my resident country's laws and regulations. Ugghhhhh, I sometimes wonder what I'm still doing here :/

Any other suggestions? Someone here mentioned Interactive Brokers but we just aren't knowledgeable enough to go into something like that one without having a broker walk us through it. Everything I've heard about Interactive Brokers is that it's recommended we don't go into it as amateurish as myself and my wife are.
I don’t know of an alternative to IB.

Have you tried their webinars?

https://www.interactivebrokers.com/en/index.php?f=14509

You could try looking at the recorded introductory ones. There is a filter for introductory to help you find them.

I can’t imagine buying ETFs is difficult. Currency conversion might be, but they have the best pricing so it is probably a worth it.

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