US citizens living in Europe face many of the same opportunities and challenges as other expatriates when it comes to financial and investment management, but unlike other expats face a number of unique challenges, restrictions, reporting requirements and complexities that require careful decision making in how finances are managed.
Americans living in Europe actually need two financial guides: one, a US based accredited financial adviser to manage their domestic US based investments including their US pension assets; and two, a Europe based International Financial Adviser with local market expertise and US reporting knowledge to guide them through the complexities of their financial planning and investments in Europe.
A US adviser doesn’t necessarily understand the investment challenges & opportunities, or the tax implications of investments in Europe. They are US domestic market experts- great for your US assets and for when you return home. You need a professional in the European market, who knows the market.
A US adviser can’t legally advise you from overseas, they can only give you the advice when you’re in the U.S. This is vital. You need to make sure the advice you receive is from someone that is licensed and accredited in that market.
Some Americans simply transfer funds back to the US as their investment and financial planning strategy. We believe there are better options and that this is not necessarily the best option for the following reasons:
You can’t invest in mutual funds in the U.S. while you’re resident overseas.
More and more U.S. banks are closing brokerage houses to U.S. citizens with overseas addresses – will you be next?
The above two point’s mean your money will likely be stuck in cash. In this low interest rate environment your assets will be going backwards by the rate of inflation. Every year.
Many American(s) have a pension in Europe. To get the best returns, you’ll need advice on how to manage it in the future
Transferring money back to the US also requires currency exchange rate consideration. The current strength of the US dollar against the Euro and Pound Stirling means an investor sending money back to the US is not getting a good deal. Active exchange rate management can have a substantial impact, another reason why it can be preferably to invest within Europe.
There are very attractive investment opportunities in Europe however the structures are complex and more limited for Americans. Navigating it properly will produce the return on investment you seek. These complexities are typically not widely known to U.S. advisers
Finally though, as mentioned above if you don’t have an adviser in the U.S. – then you need one there too!
HOW TO FIND A GOOD ONE
Beacon American Advisors has done a lot of the hard work for Americans in Europe. We carefully assess all firms that would like to partner with us to manage the specific and unique needs of Americans. You can be assured that if they are working with us, they have met our stringent criteria to offer you
good, unbiased and relevant financial advice. Advice for Americans living in Europe. And we can help them to
collaborate with your US adviser to align your complete financial planning needs.
Remember, financial and retirement planning is some of the most important and impacting things you will undertake. But, most people spend more time planning their annual holiday every year than they do on their financial futures. If you invest the same time into your financial future with the experts within the markets you can continue taking holidays for as long as you want!
By David Bellingham