What does one do when you are no longer a resident in the United States and your US brokerage firm informs you that they can no longer service your account? Nardis Advisors specializes in helping resolve the financial issues faced by US expats.
Before we get started discussing our case studies on US expat financial issues, we have written many blogs on expat wealth management topics. Please take a moment to peruse our series on Moving to Israel, if this is of interest to you or anyone you may know.
Case 1: The Problem
K. spent over 40 years living in upstate NY but decided to move back to her native Holland. Over the years she built up a large portfolio of stocks and bonds. Now, to her surprise, her brokerage firm informed her that seeing she was no longer a US resident, their internal compliance policies did not allow them to continue managing her account.
This is a typical financial issue that many US expats face. Here’s what we did.
Nardis Advisors can manage investment accounts at its US-based custodian for certain non-US residents. K.’s situation was brought to the attention of Nardis by her CPA. He suggested that Norman Chait, Managing Principal of Nardis, travel to her home in the eastern Holland to consult with her.
As she was of advanced age, had mobility issues and did not have internet access, all the account opening and asset transfer paperwork had to be processed manually. Nardis had to ensure ahead of time that everything would be perfectly in order, because any corrections to the forms would have delayed the process significantly.
All the paperwork was scanned on site on an iPad and later that day sent via secure connection from Norman’s hotel in Amsterdam to Nardis’ office in Westchester, NY. The account was opened at Nardis’ custodian and we assumed the role of investment advisor to K.
Case 2: The Problem
A similar situation occurred with S. who moved back to live in Haifa, Israel. He spent many years in Maryland, USA after he was brought over by an Israeli manufacturer to work at their operation there. The company shut down their US subsidiary and S. returned home. The company closed its 401k retirement plan, issued him with a rollover check with instructions to open an Individual Retirement Account (IRA) at Fidelity Brokerage.
Here’s where this expat financial problem got complicated. The snag was that Fidelity was unwilling to open this account as S. no longer had a local address or valid American ID. In addition, according to US law, rollover checks must be deposited within sixty days into another retirement account (IRA or 401k) or the holder will be liable to pay taxes and penalties on the amount.
This type of financial issue is very common with US expats.
The CPA of the Israeli manufacturer where S. is employed contacted Nardis Advisors for guidance. Norman Chait immediately asked for a copy of the rollover check in order to see if sixty days had passed. Fortunately, they had not. Nardis was able to open an IRA for S. at our custodian within a few days, and deposit the rollover check, thereby saving him several thousand dollars in penalties and taxes.
Concluding thoughts on US expat financial issues
We hope you enjoyed our case studies on US expat financial issues. Please recognize that there are many ways to solve these problems, and our approach can not be interpreted as advice specific to any one individual. For specific recommendations applicable to your situation, consult a financial advisor.
We are a financial advisory boutique with advisors in the US and in Israel and serving expats globally. If you are moving to Israel or another country and don’t know where to start when it comes to the financial side of things, please contact us.
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Norman H. Chait, CFA, Managing Principal, Nardis Advisors LLC, May 4th, 2022
Disclaimer: Nardis Advisors LLC (“Nardis”) is a Registered Investment Advisory Firm regulated by the U.S Securities and Exchange Commission in accordance and compliance with applicable securities laws and regulations. Nardis does not render or offer to render personalized investment advice through this medium. The information provided herein is for informational purposes only and does not constitute financial, investment or legal advice. Investment advice can only be rendered after delivery of the Firm’s disclosure statement (Form ADV Part 2) and execution of an investment advisory agreement between the client and Nardis.