Advising Americans on Onshore Investments

If you are not American, you may not know this fact about investing for people from the US: Americans can’t invest offshore and enjoy all the tax haven status benefits. Due to their country’s laws, the no tax benefits of offshore investing don’t apply. For them, offshore investments are taxed same as domestic, onshore investments (Or rather their tax liability to the IRS remains the same). When they are living abroad, they might want to try to find a consultant that knows about what is available back in their home country.

Though Richard Cayne and the team of financial planning consultants at Meyer International focus on a mainly Japanese clientele, they have experience with clients all over the world.

Richard Cayne himself has advised lots of Americans about their onshore investing options and knows quite a bit about the subject.

Here is what he said about the challenges of this market segment and the complicated world of American onshore investments for expats:

Questions about Non-residents

American companies offering financial products don’t seem interested in non-resident business, even if it is coming from American citizens, according to Richard Cayne. “Because of certain legislature, restrictions and perceived risk in cross border issues they don’t want business from Americans living abroad. The paperwork and legality becomes complicated and difficult for them to deal with,” he said.

Questions always seem to come up about why an American is living in Japan or Korea or elsewhere in the world. To get around the messy paperwork, the salespeople at the banks and brokerage firms often ask for any American address that the expat client can use on their paperwork instead of their international address to get around the complicated legalities.

Regulations

For Americans living abroad, there are more investment regulations than ever before. Due to sections of the Patriot Act and the Foreign Account Tax Compliance Act (FATCA) that make the paperwork a nightmare, financial institutions such as Wells Fargo, Fidelity, Morgan Stanley, Merrill Lynch, and more are limiting or even refusing to deal with expat clients due to their status as non-residents.

Marketing

Since the US banks and brokerage firms are not actively soliciting business from non-residents, they certainly don’t do any marketing to this often wealthy clientele. This is unfortunate. According to Richard Cayne, “They don’t market at all to Americans living abroad. That’s a shame because many of those people are only living abroad for a few years – but they may have kept that brokerage account open for the rest of their lives.”

A Lost Market

In the interim, American expats are stuck doing almost nothing for their financial planning while they live abroad, which is not good. Whether these Americans are single, married or seniors; whether they have children of any age or not – it’s always important to be planning for the financial future.

Americans living abroad are finding it harder and harder to find anyone to help them invest. Due to the laws and restrictions in place, even when they find someone willing to work with them, the choice of products they can invest in is woefully limited.

For further information about onshore or other investment topics, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561