2025 was the breaking point for US expats and their investment accounts. A collection of regulatory deadlines, trading platform updates, and risk-management initiatives reached critical mass, turning a slow bleed into a torrential deluge, with many US expats turned away from their US brokerage accounts.
Let’s dig into exactly why 2025 was the year US banks and investment platforms drew the line with expats, and what people are doing about it.
We had lots of new clients with anecdotes/comments of “my US broker/adviser dropped me” as well as people encountering (or suddenly discovering) such restrictions.
Reasons for US expat account closures
There are three precipitating events that are causing us to see this spike in 2025. All three of these items began occurring in late 2024 and continue throughout 2025.
Vanguard’s “Legacy Platform” Sunsetting
This was one of the biggest expatriate client “purges” last year.
- What happened? Vanguard announced they will be shutting down their old “legacy” mutual fund platform by the end of 2025.
- Why does it matter? Most old clients had been “grandfathered” on this old platform for years. To stay on Vanguard’s platform and continue trading, everyone was forced to migrate to their new brokerage platform.
- The kicker? Transferring to the new platform triggered a “Know Your Client” (KYC) review on all accounts. This new platform has “smarter” logic that immediately flags foreign addresses/IP addresses. Foreign expats who hadn’t been caught previously were immediately blocked from migrating their accounts unless they could provide a legitimate US residential address. Accounts were forced to liquidate or transfer to another provider.
Anti-Money Laundering Requirements for Investment Advisers (RIAs)
For many years US banks were heavily regulated for Anti-Money Laundering (AML) purposes, but independent Registered Investment Advisers (who don’t take custody of funds, but manage portfolios) were lightly regulated. There was an intention to increase the AML rules from 1/1/2026 but this has been delayed to 2028.
- What changed? In late 2024 / early 2025, the US Treasury/FinCEN finalised rules that also placed investment advisers under the same stringent AML requirements as banks.
- What does this mean? Small and mid-sized independent financial advisers are faced with significant regulatory expenses to “know” the source of all funds held for foreign clients. Rather than hire expensive compliance departments to service a few wealthy expat clients, many simply decided it was better to just “fire” all their non-US resident clients.
“Cost of Compliance” finally outweighs “Reward”
Assuming you have an account(s) with the big brokerage firms (Merrill Lynch, Wells Fargo, Raymond James, Morgan Stanley, etc) policy changes from central compliance team were that non-residents are not cost effecively monitored and compliance economic cost is too large compared to total fee income from non-US residents. Compliance costs are greater than ever before.
- Reason #1: FATCA fatigue. Running a brokerage that reports American accounts to the IRS ( FATCA ), and then additionally reports *all of their clients’* information to foreign governments ( CRS ) is expensive.
- Reason #2: MiFID II enforcement. EU rules prohibit the selling of US domiciled ETFs/S&P Funds/etc to EU residents without specific documentation. (This is called MiFID II). Basically, US firms don’t generate the documentation (known as KIDs) required by the EU (before buying anything).
- Foreign residency means deeper dives on verifying your identity, monitoring, and often tax/documentation overhead — such that servicing you may not be worth the cost for a “mainstream” brokerage account.
Financial advisers are breaking up with clients
2025 was the year they drew the line. Foreign residency means deeper dives on verifying your identity, monitoring, and often tax/documentation overhead — such that servicing you may not be worth the cost for a “mainstream” brokerage account.
Things Edale saw in 2025: Practical experience
Need some context for where the conversation is at right now? It’s no longer “how can I invest as a US expat?” its more about damage control or moving elsewhere.
Older “Stealth” Methods Are Being Detected
- Old Strategy: Use a parent’s or friend’s US address and a VPN.
- Newsflash: They have better tech now. Banks and brokerages aren’t accidentally catching foreigners with advanced fraud detection; they’re searching for them.
- You are likely getting caught on:
- Two-Factor Authentication (2FA) numbers (Google Voice / VoIP numbers are frequently getting rejected now…they want a “real” US mobile carrier that they can map to a cell tower).
- Logins: IP Addresses they know you aren’t living in (consistently logging into your account from say France even if you VPN to US. Sometimes the “leak” happens once, and that’s enough.
Nightmare scenario: liquidation panic
- Accounts are being given 30-60 days to transfer assets or be FORCED liquidated.
- If you get forced liquidation, the government doesn’t care that you didn’t want to sell everything. The financial institution triggered capital gains tax on everything at once. For long-term stockholders, this is literally an unpaid tax bill of thousands that you didn’t see coming.
What’s happening on paper versus in practice
The impact comes in different forms. The main action among big US institutions appears to be:
- “Hold-only / sell-only” mandates: retain existing positions, but new purchases are prohibited (triggered by adding a foreign address or for certain countries)
- Mandatory customer transfer: move to another custodian by a deadline (sometimes letting you ACAT “in kind,” other times forced liquidation)
- Straight-up account closure/relationship termination: common if a specific country is on a “no service” list, or where the account is advisory managed but the firm doesn’t do overseas advisory relationships
There’s no blanket US regulation requiring accounts to be closed upon moving abroad—it’s up to firms to decide whether to support certain residency statuses based on risk/cost/compliance factors.
Real stories of what Americans are running into/expats are discussing
Reddit is particularly illuminating here because you get the…human experience. Inconsistent answers from support/web forms, country-specific issues (revealing what firms can do still depends heavily on your residency), and “I didn’t know until I received the letter”. Stories and themes we saw over and over:
- “My broker halted my account or dropped me when my foreign address was added.”
- Confusion on the rules / being given incorrect assurances.
- US adviser terminating my relationship since I moved abroad!” US advisers are fundamentally “based at” their residency—you’ll see people share their adviser terminated their services due to relocation, typically because the adviser’s firm won’t permit servicing clients abroad due to compliance/ paperwork concerns.
- “Should I use a US mailing address?” Questions/swapping stories abound regarding the use of continuing to use a US address for brokerage/mail correspondence. (Fun fact: this can escalate to legal issues very quickly if it crosses into actual residency misrepresentation. Firms’ customer terms usually mandate providing accurate residency info)
Recommended actions for Americans moving abroad/not wanting surprises
2025 was the year the “grey area” disappeared so ideas gor getting ready if an expat with US accounts. Ideas:
- Know that your current provider(s) can change their stated policies. Don’t put eggs in one basket. If you’re at a brokerage firm with no reliable ‘Plan B’, look elsewhere and establish at least one alternative banking/brokerage relationship that explicitly covers your residency.
- Look for ‘portable’ custody arrangements ahead of time if you have taxable brokerage accounts (banks/brokers with pre-existing international support). Specialist advisers can use an international office to support “expats investing abroad”.
- For UK/EU residents, PRIIPs isn’t going anywhere. Even if your brokerage platform permits non-US residency for accounts, not all products they offer will be available for purchase.
- You really shouldn’t use a “US mailing address” to avoid detection. Ensuring your contact information is up to date is one thing. Intentionally omitting your move and providing incorrect residency information is risky and tends to catch up with people during transitions like transfers/distributions when the firm verifies.
- Run the “can you service me overseas” past your adviser first. If you work with an adviser, make sure it’s verified they can service your country of residency (US advisers technically can still advise abroad but may not have prepared cross-border paperwork up front). “My adviser wasn’t permitted to keep me” is common enough that it’s part of standard discussion.
US expat process to transfer accounts to a provider that allows non-residents
The majority of brokers will allow you to transfer your investment accounts to an expat-friendly brokerage company. You should review transfer policies and fees before making the move. If you choose to move your brokerage account (which you should do if you find a brokerage that caters to expats), you nearly ALWAYS want to request an “in-specie” transfer. Basically, “in specie” just means “as is”. You transfer your investments “as they are” (stocks, funds, bonds, etc.) to your new provider. Don’t sell them and transfer the cash, as this has tax consequences. When you sell all of your investments to move money, it creates what’s known as a “taxable event”. Basically, anytime you sell an investment for more than you bought it, you pay taxes on the gain at that time. Transfers between brokerages in the US are handled through the ACATS (Automated Customer Account Transfer Service). ACATS allows brokerages to electronically transmit your assets to one another. When you request an in-specie transfer through ACATS, you won’t get hit with a tax bill you don’t need and your money stays invested while the transfer occurs. Edale works with a platform in the UK that is connected to ACATS, making portfolio passporting easy and not disturbing your holdings.
While many US brokers refuse US expats, you still have investing options as an American living overseas. The best choice for you depends on your situation, including where you’re going, how long you’ll be there and your long-term goals. Speak with an investment advisor who specialises in working with expats. They can provide you with the tools you need to understand your options and make the most of your new life as an expat.