Are you an American expat who recently discovered that HSBC Premier is closing your brokerage account? Since the beginning of 2024, many American expat clients are scrambling to find a solution after the sudden news that HSBC will no longer offer them their investment services. This has left many former clients shocked, anxious, and worried about their retirement or investment accounts.
Dropping the ball
Even if HSBC has always been seen as a more “international” bank, unfortunately they are no longer willing to deal with the cross-border regulations of certain countries, in particular, France, Italy, Monaco and the U.K.. When pressed on the issue, HSBC customer service simply commented they “can no longer give advice to clients residing in those countries”. This has come as a surprise to their more affluent “premier” clients, who counted on HSBC to bridge the international banking dilemma of their internationally-mobile lifestyle.
Change of direction
For the past couple of years, HSBC has been restructuring its service offerings, parting ways with much of its retail operations in North America and Europe. For instance, many former customers now find themselves banking with Citizens Bank (USA), Credit Commercial de France (France), or Royal Bank of Canada (Canada), as well as the German and Russian branches possibly following suit. However, former CEO Noel Quinn had expressed the desire to continue to service their wealth and private banking clients, which one would imagine included its premier clients, but which are in fact serviced in the US under the HSBC service company.
The weight of cross-border regulatory compliance
Dealing with finances when you are a US-connected person living overseas is always a mess. The United-States is one of only two countries in the world to tax based on citizenship rather than residency, resulting in Americans having to file US as well as local taxes when they live overseas. US expats are therefore left to try and untangle the web of American and foreign country regulations when filing their taxes and investing their money.
FATCA and Reporting Requirements
In 2010, the United States imposed the stringent FATCA reporting rules for all banks holding assets for US clients, often requiring heavy reporting obligations or authorisations. Unfortunately, the backlash was quite dramatic, as many banks – American and foreign – simply no longer accept U.S. expat clients, leaving them with few banking options. In addition, American banks don’t necessarily have the required foreign licenses to trade or sell securities overseas, which is why your U.S. bank will occasionally keep your checking accounts, but will liquidate your investments.
What to Do Next: Find a partner adapted to your needs.
If your account is being closed, you will need to transfer your assets to a bank and custodian who will accept an overseas address. At Harrison Brook, we have done the legwork to find the partners who work with American expats and provide the solutions adapted to those living overseas:
- Accept overseas address
- Provide 1099 form for easy tax reporting
- Multi-currency accounts
- Access to stock, bonds and ETFs
- Allows rollovers of US retirement accounts such as IRA and 401(k)
- Bilingual advisors
- Advisors licensed in the US and the EU
- Manage finances for non-US spouses and local financial products
Find the right cross-border team for US expats living overseas
The sudden closures of U.S. investment accounts for expats is becoming increasingly common, as banks withdraw from international investment services due to the complex compliance requirements. This trend underscores the importance for U.S. expats to collaborate with a dedicated team of cross-border specialists to optimize their investments and avoid costly errors. At Harrison Brook, our advisors have the expertise to navigate these challenges, helping U.S. expats make informed financial decisions and remain compliant with all regulations. Ensure your financial peace of mind by scheduling a consultation with a Harrison Brook advisor today.
