Why the letter came, and what it usually says
Over the last several years, many large US brokerages have decided they will not service customers who live in certain countries. The reasons they give vary: the securities laws of the country you live in, the cost of complying with them, mutual fund distribution agreements that stop at the US border, or a general decision that non-resident accounts are not worth the trouble. Policies vary by firm and by country of residence, and they change. What one firm allowed last year it may not allow now.
The letter itself tends to come in one of three forms. The mildest says the account is “restricted” or “liquidation only” — you can sell and withdraw but not buy. The middle form says you must transfer the account to another firm by a date. The most serious says the firm will close the account and, if you do nothing, sell your positions and mail you a check. Read it twice and find those three things: the date, what you can still do, and what the firm says it will do if you do nothing.
Step one: reply in writing, and ask for time
Reply to the letter in writing — through the firm’s secure message center, by email to the address on the letter, or both. Say that you received it, that you intend to transfer the account rather than liquidate, and that you need a stated amount of time to do so. Sixty days is a reasonable request; many firms will give it if asked. Save a copy of what you sent and any response.
The purpose is not to argue. A firm is generally free to decide whom it will serve. The purpose is to create a record that you did not consent to a sale and that you were actively trying to comply. If the firm later sells your positions anyway, that record is the difference between “the customer ignored our notice” and “the customer asked for time and we sold anyway.”
Step two: find out what can move and what cannot
Most US-listed stocks, ETFs, bonds, and cash transfer between US brokerages “in kind” through the industry’s automated transfer system, meaning the positions move without being sold. Some things do not transfer cleanly. Proprietary mutual funds — the receiving firm’s competitor’s house brand — often cannot be held there. Some mutual funds cannot be bought or even held by a resident of your country. Annuities sit with the insurance company, not the brokerage, and are not part of a brokerage transfer at all.
Print your current holdings and mark each one: transfers in kind, must be sold, or unclear. For each “unclear,” ask the firm in writing. A sale you choose, on a date you choose, is very different from a sale the firm executes on the last day of a deadline.
Step three: find a receiving firm that will take you where you live
Before you open anything, ask the new firm the exact question in writing: “I am a US citizen and my residential address is in [country]. Will you open and maintain a taxable brokerage account and an IRA for me at that address?” Do not accept a general assurance from a sales representative. Ask for the policy, and keep the answer. Several US firms do accept non-resident US citizens for some countries, and a few specialize in it; which ones, and for which countries, is exactly the kind of thing that changes, so check the current policy rather than a forum post from three years ago.
Give your real residential address. Using a relative’s US address to keep an account open is a misstatement on account paperwork, and firms treat it as grounds to close the account on their own terms — which puts you back where you started, with less time and a worse record.
Step four: watch the “helpful” hand-off
A recurring pattern: the same firm that is closing your brokerage account, or a representative connected to it, offers a solution — an affiliate, an “international” platform, an advisory account, or an insurance product that “works anywhere.” Some of these are fine. Some carry an advisory fee on top of fund expenses, a surrender schedule, or restrictions you will not discover until you try to leave.
Any recommendation made during the transition is still a recommendation. It is covered by Regulation Best Interest and FINRA Rule 2111 like any other, and “the customer was in a hurry” is not a defense to selling a retiree a product that did not fit.
Step five: keep every letter
The firm’s letters, your replies, the transfer forms, the confirmations of any sales, and the statements before and after — keep all of it, as PDFs, in one folder. If the account is closed, your online access may end with it, so download statements and confirmations before the deadline, not after.
One caution that applies to every paragraph here: we are securities litigators, not tax advisors. Anything involving your US return, the foreign earned income exclusion, or how a sale is taxed belongs with a CPA who handles expats.
When a closure becomes a claim
The policy itself is rarely the claim. What can be a claim is the handling: positions sold without your instruction after you asked for time; a fund liquidated at the bottom of a down market when it could have been transferred; notice so short that no transfer was realistically possible; or a replacement product recommended during the transition that was unsuitable for a retiree on a fixed income. Each of those is evaluated on documents — the firm’s own letters and your statements — and pursued in FINRA arbitration, which does not require you to be in the United States.
- Forced sales after you asked, in writing, for time to transfer
- A liquidation with no notice, or notice that arrived after the sale
- Losses from selling into a down market when an in-kind transfer was available
- A replacement product with fees, surrender charges, or lockups you were not told about
- A tax bill from sales the firm chose, not you
Key takeaways
If you remember six things
- Find three things in the letter: the deadline, what you can still do, and what happens if you do nothing.
- Reply in writing and ask for time. Keep the reply.
- Transfer in kind wherever possible; sell only what cannot move, on your own schedule.
- Ask the new firm the exact question, in writing, about your country of residence.
- A recommendation made during the transition is still subject to Regulation Best Interest.
- The policy is usually legal. Careless execution of it can still be a claim.
Questions
Asked most often
Can a US brokerage legally close my account because I live abroad?
Generally, yes. A firm may decline to keep servicing a non-US resident. What it may not do is execute that decision carelessly — sell without authorization, give unreasonable notice, or steer you into an unsuitable replacement. The claim, if there is one, is about the handling.
What if the deadline has already passed and they sold everything?
Gather the letter, the sale confirmations, and the statements on either side of the sale, and have them reviewed. Whether the sale is actionable depends on what notice you were given, what you said in response, and what it cost you. The review is free and confidential.
Should I use a family member’s US address to keep the account open?
No. Account paperwork asks for your residential address, and a false one is a misstatement the firm can use to close the account on its own terms. Give the real address and find a firm whose current policy accepts it.
Do I need to fly home to deal with any of this?
No. Transfers, correspondence, and — if it comes to that — a FINRA arbitration claim are all handled electronically, with hearings by video.