The following transcript was generated by AI and may contain inaccuracies.
At the 2026 US Expats Financial Conference, investment advisor Shane Clark of EuroAmerican Financial Advisors joined host Hugo Lesser to discuss financial planning considerations for Americans living abroad. Speaking from his base in Sevilla, Spain — and an expat himself for over 20 years — Shane walked through why financial life is uniquely complicated for US citizens overseas, from citizenship-based taxation and PFICs to choosing a broker who will keep your account open, before covering currency risk, portfolio diversification, buying property, and his outlook for the markets in 2026.
Hugo: Welcome, everyone. I’m here today with Shane Clark from EuroAmerican Financial Advisors.
Shane: Hello.
Hugo: And Shane, you’re dialling in from southern Spain, I believe.
Shane: That’s right — Sevilla, in Spain. We’ve turned the corner on winter down here. It’s already springtime.
Hugo: Nice for you.
Shane: Well, we had a lot of rain this year — a lot of storms, flooding, a lot of trees down, a lot of water in the fields. I think I read we had more water in early February than in any year since 1961. So it was quite a rainy couple of months.
Hugo: And I imagine it gets pretty dry in summer, so I guess that sets you up.
Shane: Yeah. Somebody was telling me there’s a cycle every six years where we get a lot of rain, it refills the reservoirs, and that’s good.
Hugo: The weather’s been freaky in a lot of places in the US this winter too. I don’t know if it’s part of the same storm system on both sides of the Atlantic — maybe the distance is too big.
Shane: We’d need a larger panel for that conversation.
Hugo: That’d be a different conference. We’re going to be discussing financial planning considerations today for Americans moving and living abroad. Shane, I’m sure you’ll mention it in the presentation, but how long have you been working with expats, and what led you to it?
Shane: I’ve been working with expats through our US firm, International Asset Management, for about eight years. I had my own business before that for a couple of years, and then we started our business here, EuroAmerican Financial Advisors, around four years ago. I’ve been an expat myself for around 20 years, and realising how incredibly complicated it is drew me into the expat financial space. Before that, I was working at a university in Glasgow, in Scotland.
Hugo: That’s a contrast to southern Spain, climate-wise. What took you abroad in the first place — university, or something else?
Shane: It was around 2008. I was working as a portfolio manager for a wealth management company in the US, and I was very interested in trading international bonds. I got a bit obsessed with it and wanted to find out more — about managing currency risk, hedging, all those things. So I did a master’s at the university in Glasgow, and then stayed on.
Hugo: That’s often the case. It’s always interesting working with expats — the reasons people move abroad are sometimes very deliberate and well-planned, sometimes coincidental, and they get a taste for it. But it’s always more or less life-changing.
Shane: Absolutely.
Hugo: Let’s dive in. I’ll read a short introduction and then hand over.
Welcome to day three of the 2026 US Expats Financial Conference, sponsored by Expat Focus, Wise, Global Citizen Solutions, and Advanced AI Services. We have a fantastic schedule for you, consisting of 17 sessions over four days, covering multiple aspects of financial information for Americans living abroad, with perspectives from some of the world’s leading experts in their fields.
For our first session of the day, I’m delighted to be joined by Shane Clark, who will be discussing financial planning considerations for Americans living abroad in 2026. Shane is president and co-founder of EuroAmerican Financial Advisors, and specialises in financial advice and investment management for Americans living in Europe. He has over 10 years of experience in international financial markets, and designs balanced, diversified global portfolios for long-term returns. Shane has been an expat for 20 years. He holds a European Financial Planner (EFP) designation, an MSc in Financial Economics, and an MPhil in Economics from the University of Strathclyde, and he currently resides in Spain.
Before we start, please bear in mind that the information presented is for general educational purposes only, and you should always seek your own personalised financial advice. Shane will be answering your questions at the end, so please add them to the Q&A pop-up at the foot of your screen throughout, and we’ll try to answer all of them. Without further ado, over to you, Shane.
Shane: Thank you, Hugo. Thanks for the introduction. I don’t think I can add much to that, but I’ll add that we’re headquartered in Sevilla and licensed with the Spanish investment authorities as an independent investment advisory firm, which is somewhat unique. There are many firms in the US that do what we do, but they don’t necessarily have a licence over here. We have a licence, a footprint, an office, and good connections, so I think it makes for an interesting partnership with our clients.
We also have a firm in the US called International Asset Management, founded by my partner, Tom Zachystal. It’s been around 25 years now. So between the two firms, we look at: you’re moving somewhere in the EU — how do we structure your investment portfolio in a way that’s compliant in both jurisdictions but also tax efficient? With that, I’ll dive into my presentation. Let me share my screen.
Hugo: Go ahead.
Shane: Investment and financial planning considerations. First, a brief overview of why this is so complicated and confusing for US expats, then some cross-border financial planning considerations. A question we often get asked is, “I’m moving abroad — where can I custody my assets?” So we’ll look at some brokers that are happy with you being an expat. We’ll talk about managing currency risk and moving money in the most efficient way possible — all things currency.
Then some portfolio considerations for expats. A lot of people these days are interested in having money in euros and outside of the US financial system, so we’ll present some opportunities there. Also buying real estate, then a recap of 2025 in the market, and a look forward to this year. And finally, a checklist for expats — dos and don’ts, things to be aware of before you move, and how it all fits into the big picture.
One big question people always ask on our initial call is, “Have I missed anything? What’s the one thing I shouldn’t do?” One thing people often want, to have diversification in their portfolio, is to invest locally. By that I mean: let’s say you move to France. You want exposure to the euro and to the European markets. If you go to a local broker or bank, they have no problem selling you a fund or a local exchange-traded fund — maybe in an insurance wrapper, maybe directly into a brokerage account. But those are called passive foreign investment companies, or PFICs.
If you’ve looked into this, you’ve probably read that PFICs are very bad if you’re a US citizen. It might be efficient for you locally from a tax perspective, but when you file your US taxes, that’s where the problem is. Whenever we talk about tax efficiency, I use the pills analogy — it’s how the two different pills interact that’s the problem. You might be solving your local tax problem in France, but how that interacts with your US taxes is the issue. So we don’t want to do that. Don’t buy PFICs.
Why is it so complicated? The big one is citizenship-based taxation. The US is different from every other country: if you’re born a US citizen or become one, you always have to file a tax return in the US. You might not have to pay, but you have to file every year. That creates a myriad of complications.
Another is the Foreign Account Tax Compliance Act (FATCA). You’ve probably noticed that if you try to open a bank account abroad, there are additional forms to fill out — passport, ID, citizenship, all those things. That’s a tax reporting form local brokers have to report back to the US. This is why a lot of banks, for example in Germany, won’t open accounts for US citizens.
The next one is FBAR — the Foreign Bank and Financial Accounts report. There are two different thresholds. If you have any accounts totalling over $10,000 at any point during the year — even if you have $5,000 in one and $5,000 in another — you need to report those accounts back to the US. And there’s a larger threshold with a different form as well.
PFICs we’ve talked about — don’t buy passive foreign investment companies, mutual funds, or exchange-traded funds. Whatever you’re trying to accomplish with them, you can do in a much more efficient way.
The next is MiFID — the Markets in Financial Instruments Directive. This governs us as licensed investment professionals. In the US, the SEC has a lot of laws dictating what brokers and investment advisors can do. It’s the same over here — MiFID sets out the whole framework for your rights as a consumer and our responsibilities as a licensed firm. This is important to note: if you’re going to work with an advisor in the EU, make sure they’re licensed. It’s the same in the US — you wouldn’t work with someone who doesn’t have a licence with the state or the SEC.
The final one is always a mouthful for me: packaged retail investment and insurance-based products (PRIIPs). You’ve probably read that if you try to buy US ETFs in your brokerage account once you live in the EU, they don’t let you. This is why. This EU legislation says each fund must produce a key information document (a KID statement). US ETFs can’t produce this document, because the SEC says you can’t forecast performance — and in the KID, you have to.
There is a workaround, luckily. Each broker in the US has to take a stance on how they interpret PRIIPs. Charles Schwab, for example, takes the stance that if you’re a retail client — meaning you set up your account yourself — they can’t sell you US ETFs once you move to the EU. But if you’re an institutional client — meaning you work with a US-based registered investment advisor — they can. So if you have a taxable brokerage account with Charles Schwab and you work with a US RIA firm, like ours in California, you can have US ETFs in your account.
What is cross-border financial planning? Maybe some of you have done financial planning with US-based advisors. This is pretty similar, but with the additional complications — different laws, different currencies, different taxes — and how all of that works within the framework of financial planning. That’s what separates cross-border financial planning from typical financial planning.
We create a comprehensive financial plan for you, including three personalised financial statements: a balance sheet looking at your total assets, an income statement looking at money coming in versus your expenses, and a statement of cash flow. We project that into the future and incorporate any goals you have, then run different scenarios.
So we might look at: do you want to buy a house or rent one? That’s a common and important question. In the US, we typically buy. Over here, it’s common to rent. If you’re moving to Paris for the first time, instead of buying on day one — or even before you move — you want to get to know the neighbourhood, see if there are other expats, get a feel for the vibe, see if you’d like it. So we always recommend renting for the first year.
Then there are hidden costs. In Spain there’s a wealth tax; in France there’s a wealth tax; in Italy there’s a wealth tax. You might not be aware of these before you move, so it’s important to have a consultation with a local tax advisor or immigration attorney. We can then incorporate all that data into the plan to get a more comprehensive picture of what your life is going to be like.
The last thing we do is incorporate estate planning. We don’t do the legal aspects — you need an estate planning attorney on both sides, the US and France, for example — but we do incorporate the planning element into your overall picture.
On custody: which brokers will work with you after you leave the US? There aren’t too many. Merrill Lynch doesn’t, Morgan Stanley doesn’t, Fidelity and Vanguard don’t. None of the big names typically work with you once you become an expat. They might tell you it’s not an issue, and then when you move and have a new address, they freeze your account or tell you they can’t work with you anymore.
The reason is that you probably have a good relationship with your broker or advisor, but they probably don’t have any clients who live overseas. So if you tell them you’re moving abroad, they might say “no problem” — but when they enter the new address into their system, it goes to their compliance department, and that’s when the problem is created. Then they come back and say they can’t work with you anymore.
The two that do work with you are Charles Schwab and Interactive Brokers — both are expat-friendly. I should note that Charles Schwab will maintain your account if you’re moving to France, for example: if you open it in the US, they’ll maintain it as you move. They don’t work with people moving to Italy, so there are a few EU countries where Schwab won’t let you open new accounts. Interactive Brokers works in every country.
Then there’s getting money outside the US financial system. Some folks are worried these days about what’s going on in the US: how do I get money outside the US financial system in a safe, compliant way where I still have US tax reporting that isn’t too expensive? That’s the other big issue. People reach out and say, “I want to custody in Switzerland.” You can, but it’s very expensive. In the US, we’re used to a lot of competition in the financial markets — with Charles Schwab, most of the trading we do on the US side is free. In Switzerland, and at a lot of EU banks, they might charge 1% of the value of the trade every time. If you trade twice during the year, that’s 2% just in trading, not including products or advisor fees.
So we always say that if you want to get money outside the US, Interactive Brokers is the best bet. It’s custodied in Ireland, with a very similar fee structure to the US Interactive Brokers — very nominal fees for trading and custody — and you get 1099s for US tax reporting.
Following up on those issues, tax reporting is super important. If you custody with a bank in the EU — any of the big ones, Santander, the French banks — they typically don’t produce 1099s. So any capital gains you have, even if it’s not a PFIC — on individual stocks, or a golden visa investment, for example — you’re going to be taxed. If you’re not a tax resident in the EU and you’re taxed in the US, you’ll be taxed at ordinary income rates on these investments, not long-term capital gains. That’s another reason to go with Interactive Brokers.
If we look at safety: in the US we have SIPC insurance, up to $500,000 per account. In the EU it’s much lower.
Currency risk. This is a big one. Last year was an exciting year in the currency markets — the euro appreciated around 13% against the US dollar. This is one of those conversations that doesn’t matter until it does, and 13% is a considerable difference. If all your money is in US dollars and all your expenses are in euros, and the euro appreciates 13%, you’ve lost 13% of your purchasing power in one year. So we need to mitigate that currency risk.
There are two ways to do it. Indirectly, where we custody the assets at Charles Schwab and buy US ETFs that own European companies — if the European ETF appreciates 13%, the price of the ETF goes up 13%. That’s the easy, compliant, fast way.
The other, more complicated way that we offer is to hold European securities directly. With Interactive Brokers, if it’s a taxable account, it’s in Ireland; with our US firm, we can trade on any exchange in the EU. We have two portfolios on the equity side — one of value stocks, one of growth stocks — and to complete it, we use European bonds. So it’s held in euros, with direct exposure to the euro and nice geographic diversification.
On US exposure: we actively manage our portfolio, which means we’re constantly making calculated decisions about which assets we want and how we shift between asset classes and geographies. About two years ago we shifted away from some of our US exposure, so now we’re around 50% exposure to the US and 50% to the rest of the world. If you’re living in the US with accounts at Merrill Lynch, for example, you might be 80% or 90% US exposure. So that’s a big difference in geographic portfolio management, and we do it to lower risk.
Another thing we have in our portfolios is gold — around 10% at any given time. It’s a good way to hedge against inflation, lower volatility, and in times of general market panic, the price of gold tends to go up. And we make sure everything is tax efficient and compliant.
Buying real estate is a tricky question from an investing standpoint. A lot of the time, people get emotionally involved with a real estate investment — you fall in love with a beach house, so you’re going to buy it. When we look at any investment, we have to approach it the same way: What’s the cost? What’s the cost of capital? What’s the yield? What kind of long-term capital gains are we expecting? We need to do the same with real estate.
So when people ask us to help evaluate an investment, that’s how we approach it. What’s the opportunity cost? What else can you get in the market? With any individual real estate investment, it’s risk and reward: an individual property is a concentrated risk, so there’s potential for more reward. If you buy a publicly traded real estate investment trust (REIT) ETF, it’s super liquid — we can get in and out easily — but we’re spreading the risk, so we expect a lower reward.
Moving currencies. There are really three ways to do it. You can go to your bank — go to Chase, tell them you want to wire money in euros, and they’ll charge probably between 3% and 5% of the total value. That’s not a good way to do it. If you go through a currency broker — someone like Spartan FX, Moneycorp, or Wise — they’ll usually charge between a quarter and half of 1%. Or we can do it for you on Interactive Brokers, usually around a quarter of 1%.
It’s important, though — if you’re buying a house, there’s a lot to consider when buying property abroad, and moving the currency is a big part of that. We recommend using a currency broker if you’re moving a sizable amount of money. They walk you through the whole transaction, help with timing using a forward contract, and advise on when to move and convert the money. It gives you peace of mind in a stressful, complicated transaction.
For the paperwork of buying a property, I always recommend using a local lawyer who also understands the US side. Do your due diligence with a lawyer to make sure there are no liens or back taxes, and have a tax advisor walk you through the tax consequences. For example, in Spain, if you’re a non-resident and buy a rental property, there’s an additional tax that a lot of people don’t know about until they have to pay it. Then they think, “This was a great investment, but now I’m paying so much more in taxes on the profit that it’s no longer a great investment.” So having a clear understanding of what you’re getting into ahead of time is paramount.
2025 — a year in review. We had a good year in the markets. On the equity side, it was mostly led by the AI sector and technology. The S&P 500 was up 16%, the Nasdaq up 20%, and the Dow — the more industrial, blue-chip stocks — lagged at 13%. In the EU, the UK’s FTSE 100 was up 21%, a lot of it led by defence spending. In the EU itself, with the euro appreciation, the markets were up around 36% compared to the US dollar and US market. Emerging markets in Asia had good years too — they tend to do better when the dollar depreciates, which is what we saw last year. In terms of volatility, we saw quite a bit, particularly in the spring due to trade and geopolitical tensions, and we expect that to continue in 2026.
Jumping into 2026: from what we’ve been reading, we expect a similar year to 2025, with equity markets doing quite well, continued momentum, and strong growth. The potential for interest rate cuts in the US would continue to lead to stronger outcomes on the equity side. We think the US may continue to outperform some global peers — there’s a lot of resilience in the US economy right now, and financial conditions are pretty strong.
There’s also talk of deregulating the banking sector. Whenever that happens, banks need to hold less money, which means they lend more money out. It greases the wheels — more money goes around for investment, which tends to reflect positively in the stock market.
In terms of risks, there are still a lot of concerns about the valuations of some AI companies, and I think that’s fair — the valuations are quite high. However, I don’t think it’s a fair comparison to look at the tech bubble of the nineties versus what’s going on now. In the nineties, there were typically no earnings, whereas today there’s strong earnings growth. If earnings start to fall off, or if rate cuts stall, that could slow things down. And geopolitical uncertainty remains a key issue.
To summarise what we do in-house: cross-border investment advice. We structure your portfolio to optimise taxes in both jurisdictions and maximise returns for your given level of risk, and we quarterback the situation — coordinating your financial team. We like to have a call with your local tax advisor and your US tax advisor to make sure everyone’s communicating. We’ve been doing this for years, so we’ve seen lots of different situations, which helps on those coordination calls.
For example, if you have stock options from a company you worked for in the US, you’ve moved to Spain, and after two years here you’ve received more stock options, we need your two tax advisors to talk — that can be quite complicated to treat. So it’s important to have someone who knows that.
And then financial planning — the three financial statements, the financial plan. We treat it as a living document, which gives you good information and peace of mind.
About ourselves: as Hugo mentioned, we’re licensed in both jurisdictions. We can passport our licence throughout Western Europe — Sweden, Portugal, Poland, and some Eastern European countries — about 16 countries in total now. In terms of advisors, I have the European Financial Planning (EFP) designation, and my partner has the US equivalent, the CFP. We’re both expats, so we’re happy to share any insights we have alongside the investment advice.
Something we always get asked, often on the initial call, is, “Is there anything I’m forgetting? Is there anything I’m missing?” The answer is almost always yes. When we bring on clients, we try to go through as many things as possible from a checklist like this to make sure we’re not missing anything big — or that you speak to the other professionals who can help make sure everything is aligned and taken care of before or after you move.
So there are issues before you move: Are you on the right visa? Did you sell your house? What relocation company are you using? Bank accounts — are you keeping a US bank account open? If you might go back to the US, you’ll want to keep a credit card, for example, to maintain your US credit history.
When you first move over, there are different issues. Looking at real estate — should I buy or rent? If you’ve got kids, what schools do I need to find? If you have life insurance, does it pay out now that you’re an expat? There’s a lot, and we try to help with all of it.
That’s the end of my presentation. I’ll go back to the beginning so you can see our contact information. I think we’ve got time for some questions now — is that right, Hugo?
Hugo: Yep, that’s great — lots of questions coming in. Before we dive into them, just a quick word about our sponsors.
Expat Focus is the web’s favourite destination for anyone moving or living abroad — find out more at expatfocus.com. Wise is a leading provider of fast, low-cost international money transfer services and multi-currency accounts for individuals and businesses — find out more at wise.com. Global Citizen Solutions provides second citizenship, residency, and relocation strategies for those planning life beyond borders — find out more at globalcitizensolutions.com. Finally, Advanced AI Services provides automated customer response solutions for businesses — find out more at advancedaiservices.com.
Thank you very much, Shane — great presentation, lots of useful information. We’ve got lots of questions coming in, so I’ll dive in.
Shane: Great.
Hugo: The first couple of questions aren’t related to the EU specifically, but I’ll throw them at you anyway. The first: “I have HMRC-qualified ETFs” — that’s the UK tax authority — “that I bought back in the US. Does that solve the PFIC and EU restrictions?”
Shane: I assume they live in the UK. That’s probably more of a one-on-one. If you’re a US citizen living in the UK and they’re US ETFs, then they’re not PFICs. If they’re UK ETFs that are compliant with UK tax authorities, then they could very well be PFICs. So we’d have to look at that.
Hugo: Thanks. Another question, for a completely different country: does Schwab and Interactive Brokers work for expats in Thailand?
Shane: I’d have to check on Schwab — we’re EU-focused. My partner Tom would know; he has clients in Thailand. I’m sure Interactive does, though.
Hugo: So there are always options. Somebody also asks, “How much cash or gold do you carry when flying abroad?”
Shane: It’d be heavy — huge checked-bag fees there. I’m not sure. I know on those forms you fill out when you fly in the US, if you have more than $10,000 in cash, you’ve got to declare it. But I’d probably not recommend carrying cash and gold when flying abroad — there are more secure ways to do that.
Hugo: Another question about Interactive Brokers and Charles Schwab accounts: do they have to be reported on an FBAR?
Shane: Let me preface this by saying I’m not a tax advisor. If it was Schwab domestic, it wouldn’t be an account abroad — all Schwab accounts are essentially held in the US, even Schwab international accounts. If it was an Interactive Brokers taxable account held in Ireland, then I’d assume — and again, I don’t know the answer — you’d have to report that on one of the equivalent foreign account forms.
Hugo: That makes sense, because both FBAR and FATCA relate to where the account is — if it’s outside the US, then yes. Can you talk a little about US pensions and European pensions? Can you receive both as an expat?
Shane: Good question. There are two types of pension over here: public and private. If you work in Spain, for example, paying into the Spanish social security system, you’d receive social security from the state of Spain when you retire — similar to US Social Security.
If you had a private pension, it’s a different system over here. What’s loosely comparable would be a 401(k) and a private pension. In the US, your 401(k) value is far higher than a private pension in Spain. In Spain, I think you can contribute only about €1,600 a year to a private pension, so it’s nominal. In the US, you can contribute around $66,000 with a maximum SEP IRA and everything else.
Going back to the public situation: if you contributed to US Social Security for 10 years and then Spanish social security for 15 years, they have a totalisation agreement where they communicate. So you can contact US Social Security, transfer credits to Spain, and receive all those years’ worth of credits on the Spanish system.
Hugo: That’s the same with most Western European countries — there are agreements so you can pool your contributions between the US and your new country. And again, as you mentioned, you’re not a tax advisor. A lot of pension questions relate to how they’re taxed, which depends on the tax treaties in different countries.
Shane: Yeah, I wouldn’t want to touch those.
Hugo: And if you’re an American working in Europe — or anywhere — you’re still able to contribute to US retirement plans, right?
Shane: You can. It’s not straightforward, and again, I’m not a tax advisor, so I’d always recommend you speak to your CPA, who’ll give you a plan for how to do it, and then we’d help you implement it.
As an example, let’s say you’re living in France. The way you file your taxes in the US is what gives you the right to contribute. Say you have a complicated situation: you’ve got a C corp in the US, you’re paid by a US firm to your C corp, and then you pay yourself a salary in France. When you file your US taxes, you’d typically use one of two exemptions — the foreign earned income exclusion or the foreign tax credit. If you file with the foreign tax credit, that technically counts as US-sourced income, whereas the foreign earned income exclusion does not. You need US-sourced income to contribute to a US retirement account. So if you use the foreign tax credit, you can contribute through your C corp to an IRA, a Roth 401(k), a cash balance plan, whatever you want. But speak to your US CPA about that.
Hugo: Thanks. The next question: could you explain a bit more about why expats shouldn’t invest in PFICs?
Shane: PFICs are any foreign mutual fund or foreign exchange-traded fund, and often they’re tax efficient in your country of residency. If you live in France, there are lots of insurance-based wrappers that make them more tax-advantaged there. The problem is, let’s say you file and pay taxes in France — you still need to file in the US. When you file in the US, they don’t want you to have money outside the US; that’s why this rule is in place. So they’ll tax you on unrealised capital gains essentially every year at the highest possible rate. You might even be double taxed on these investments. So it’s not tax efficient by any means — and these funds are typically much more expensive than the US equivalents.
Hugo: Thanks. There’s a question with reference to a London home — though I think it applies to any home outside the US: “If I sell my London home, do I pay capital gains in both the UK and the US? I have dual passports, but I’m not sure citizenship is a factor.”
Shane: I wouldn’t want to field that — it’s a very specific tax question. It’s better to speak to a local tax advisor in London who understands the US side, because there are probably some nuances and exemptions you could apply for that I’m not aware of.
Hugo: Just to reiterate as you leave your questions: Shane isn’t a tax advisor — he’s an investment advisor — but you work closely with both US and local tax advisors. That’s an important point: if you’re living abroad and investing, you ideally need a team, so you have the perspective of the US tax implications, the local tax implications, and how to invest compliantly. The next question: can I buy local life insurance as an expat?
Shane: Again, it’s complicated. In the EU there are many different types — in the US we have term versus whole life versus universal, and it’s similar here. What’s in the life insurance wrapper is usually a PFIC. So if someone sells you what we’d consider a variable annuity life insurance policy, the funds inside that wrapper are going to be PFICs. So it’s important to speak with a tax advisor and have someone review the holdings before you buy it.
Hugo: That probably answers the next question too. Somebody says, “If I have PFICs in a European account now worth over $200,000, what’s my best option?”
Shane: The tax advisors we work with typically advise selling those immediately, finishing the reporting for that tax year in the US, and then moving into something compliant. But I’d speak to a tax advisor on that.
Hugo: Elliot asks, “Do you help with mortgage assistance through relationships with EU banks — in brackets, France — for home purchases?”
Shane: We don’t do that ourselves, but I think we have a partner. There are three ways to do it. You can go directly to a bank that’s expat-friendly — in Spain there are many; in France it’s not as easy, but there are one or two — and take a mortgage directly. Another way is to use a mortgage broker, and some brokers are more familiar with expats than others. I believe we have a partner in France who’s a mortgage broker.
Hugo: I’ve dropped Shane’s contact details into the chat. Hopefully everyone can see them — just drop an email and we can help with that. Somebody asks, “How do I find US and UK tax advisors and an investment advisor, and not pay a fortune in fees?”
Shane: In general, you get what you pay for. Depending on how complicated your situation is, you might not need to pay a lot. You can go to a CPA to do your taxes, or to a small or large tax attorney, and what you get is entirely different. If you have a simple form to file because you’re an expat, that’s pretty straightforward — that’s more of a CPA. If you’ve got a company in France, you’re inheriting money in Sweden, and you have three passports, that’s going to be a tax attorney. And if you have a company in the US, a company in the UK, and a company in Spain, that’s when you need a big law firm with offices in all jurisdictions. I look at this as risk and reward: if you get something wrong on your taxes, that’s typically very expensive, so it’s better to avoid it if possible.
Hugo: Maybe worth making the point that, certainly for investment advisors, fees are typically lower with US advisors compared to foreign advisors. Is that right?
Shane: It’s a little misleading. In the US there are two options for investment advice. You can go through a registered investment advisor (RIA), which is typically fee-only based on the assets they manage, and they’re a fiduciary; or you can go through a broker. Brokers charge based on transactions, and they get a kickback from the funds they sell. If they sell you a mutual fund, it used to be common to have a load — maybe a 5% fee, or 1% or 3% upfront, and something on the back end — but they might not charge an advisory fee, or it might be a quarter of 1%.
So if you’re looking at an RIA who charges 1.5% and a broker who charges a quarter of a percent, it seems like you’d go with the broker. But when you add up all the fees in the funds, the platform, and the trading, the broker could be four times as expensive. It’s the same over here, where the broker route is more common: they often don’t charge a high advisory fee, but the products have many hidden and explicit fees — the platform fee, the trading fee. So you have to take a holistic view of fees.
Hugo: Do you work with Americans in Portugal?
Shane: Yes, we have many clients in Portugal and good partnerships. It’s a lovely country.
Hugo: And EuroAmerican Financial Advisors is licensed in 16 EU countries, I believe?
Shane: I think so — 16 or 17, something like that.
Hugo: Somebody asks, “Are the foreign equivalents of 401(k)s PFICs?”
Shane: In France there’s the Assurance Vie, which is kind of like a 401(k), and the structure itself isn’t a PFIC — what’s in the structure, the funds, are the PFICs. A 401(k) is just a structure; what you have within it are the funds. It’s the same here: usually there’s an insurance wrapper or structure, and within it some type of investment. It could be individual stocks or bonds — which would be extremely rare, but not PFICs — or it could be funds, which would be PFICs.
Hugo: Thanks. Somebody asks, “Does dual citizenship have very different rules?” I think it does, right? If you’re a US citizen, you’re affected by US rules in most countries, and tax systems relate to residents.
Shane: Usually the tax system relates to residency, and it’s more the US passport that creates the additional complications than the local passport. However — and again, this is where you’d speak to a tax advisor — having both passports, I believe, changes how the joint tax treaty works. From memory: if you’re living in Spain, for example, and you’re a US citizen only, you can rely on the joint tax treaty and lean into it — “I want to pay taxes on these dividends in the US first,” and then use a credit against that in Spain. But if you’re a dual citizen, you have to let your country of residence have first crack at it, unless something is explicitly written in the joint tax treaty that says differently. In some cases that does make a difference, which is why I bring it up.
Hugo: Interesting. Just to set that out: the US is one of, I think, two countries in the world that tax based on citizenship rather than residence or where the income comes from. That’s where the complications arise — for both taxes and investing — for Americans abroad. Somebody asks, “Is there a minimum amount needed to use your wealth management services?”
Shane: Yes. We have a minimum of $400,000 across all accounts, and we take a household view on that.
Hugo: “Is it a problem to use an American address with a US bank? Does this imply I live there?”
Shane: It’s different with banks. Banks often don’t care as much as brokers, because they’re regulated differently. I believe the Patriot Act states that you have to keep your actual address on file with a US bank, but they don’t necessarily ask you to update it. You should use your actual address, which has to be in the US for a US bank — so otherwise they’d have to close your account.
The workaround is either Wise, which isn’t a bank but has multi-currency accounts, or the State Department Federal Credit Union (SDFCU), which lets you use a foreign address. You can open an account if you’re a member of AARO. Do you want to tell them about that, Hugo?
Hugo: Yeah. AARO is the Association of Americans Resident Overseas — an organisation that advocates for Americans living abroad. If you’re a member of AARO — and I think the same is true of ACA — you can open an account at the SDFCU with a foreign address and have a US account that way.
A US citizen has a vested benefits account in Switzerland — are there investment options in Switzerland or Europe to convert the benefits account to?
Shane: I’d have to look at the statement and see.
Hugo: And can one hold PFICs inside a pension wrapper? This is in the UK. You touched on this just now with the structures for different foreign pension plans — so it would imply it’s what’s in it rather than the type of account.
Shane: Anything specific like that, you’ll want to speak to a tax advisor, because the general rule is what I gave, but there are always exemptions. It’s best to get expert advice before you make a move either way.
Hugo: Somebody asks, “Would you mention your fees and minimum?” The minimum you’ve mentioned — $400,000 USD. And your fees?
Shane: We have two fee structures based on the assets we manage. The first is all-inclusive, including financial planning, an actively managed portfolio, individual stocks, and individual bonds. For the first $0 to $500,000, we charge 1.5%; $500,000 to $1 million, 1.25% per year; and anything above $1 million, 1%. This is on our website as well.
The other fee schedule is if you only want ETFs — actively managed exchange-traded funds, no financial planning. For that, the first $1 million is 1%, $1 to $2 million is 0.85%, and above $2 million is 0.7%.
Hugo: I guess the normal first step is to have a conversation, so you get a better understanding of the situation and can recommend options.
Shane: That’s right.
Hugo: “If moving abroad on an opportunity visa to search for work, how much money would you recommend saving to support an individual?” I wonder if that’s about cost of living, or about having a backup fund.
Shane: The general rule in financial planning for an emergency fund is six months of expenses. So you’d have to know roughly what your expenses are going to be for six months. If you think you could find work sooner, you might not need as much; if it took longer, you might need more.
Hugo: Somebody says, “We spend 180 days a year in Italy and have moved €200,000 to Italy, placed in bank CDs insured there. The CDs only earn about 2.5%. We use Charles Schwab in the US, but they can’t provide assistance in Italy. How can we find investments in Europe with a better return for those euros?”
Shane: That’s tough, and we can help with it. European interest rates are much lower than in the US, so that’s a pretty typical return for fixed-income investments in Europe. This comes back to risk and reward: if you want a higher return, it’s going to be more risk, and that’s probably going to be in the equity markets. We could look at a value stock portfolio, but then we’d want to shift your exposure on the fixed-income side in your US portfolio to offset that additional equity exposure. So if you’re interested, let’s have a call and discuss it.
Hugo: “I’ve had both a US tax advisor and a local tax advisor for over 30 years, but never found someone who understands both. Are you the way to connect these two?”
Shane: It depends on the country. Most tax advisors only do one side or the other. We do have a unicorn partner in France, Benjamin Pik, who does both US and French. We can help coordinate that, but we can’t file the taxes on either side or provide the tax advice — we act as a coordinator and can provide good partners.
Hugo: “Will a foreign address cause the closing of bank and brokerage accounts in the US?”
Shane: Typically, yes. So what people often do is use a US address that isn’t their own, and keep the accounts open. The risks: if it’s in a high-tax state like California or New York, and it’s a taxable account, the tax authorities might come after you — “John Smith, why aren’t you paying taxes in California if you live here?” You can have a lawyer draft a letter showing you live in France, so there are ways around it, but it’s a hassle. The other issue is that if all your account statements go to an address that isn’t yours, there’s a risk of fraud if someone gets hold of them. So we always recommend using your actual address.
Hugo: Someone asks, is Schwab available in Germany?
Shane: Yes.
Hugo: Somebody says, “We’ve changed all our banking and credit cards to a virtual address in Texas. So far, no red flags. Is this a valid alternative or a ticking time bomb?”
Shane: I just answered that with the risks. In Texas there probably aren’t state tax issues, so the fraud issue is the other side. Lots of people do it, if that helps ease your mind. But if you can use a compliant bank and a compliant broker who doesn’t care that you live abroad, that’s the safer option.
Hugo: “Will beneficiaries on US brokerage accounts be voided if I become a resident overseas?”
Shane: It depends on the type of account.
Hugo: So that’s probably something we’d need more details on. Thank you very much — there were a lot of questions, and we’ve got through most of them. I’m sorry if we didn’t answer yours. Shane’s contact details are in the chat — the website is eurousafa.com and the email is [email protected]. So get in touch if you’d like to discuss your situation or the service EuroAmerican Financial Advisors provides.
All that remains is to say thank you very much, Shane, and thank you to our audience for joining us. Our next session is “Getting Ahead: Tax Planning for Americans Moving or Living Abroad,” which starts in an hour. If you haven’t already, you can register for it at usexpatconference.com. Thank you very much, Shane, for that excellent presentation, and I hope everyone has a great rest of the day.
Shane: My pleasure. Thanks, Hugo, for having me. Thanks, everybody. Take care.