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I work with US citizens scattered across ~26 countries, so I recently asked my go-to AI which U.S. investment firms handle expats the best. Here’s the short version on Schwab, Fidelity and Vanguard.
1. Charles Schwab — Best for U.S. Expats
Schwab is easily the most expat-friendly of the major brokerages. It allows U.S. citizens abroad to open and maintain accounts, including its dedicated Schwab International Account. Trading stocks and ETFs is usually unrestricted, customer service understands expat needs and the linked Schwab Bank makes moving money internationally simple.
Bottom line: The smoothest choice for most expats.
2. Fidelity — Works Only If You Already Have It
Fidelity generally won’t open new accounts for Americans living overseas. Existing customers can usually keep their accounts, but certain trades—especially mutual funds—may be limited.
Bottom line: Fine if you already use Fidelity, but not ideal for new expats.
3. Vanguard — The Most Restrictive
Vanguard typically requires a U.S. residence for full service. Expats often face blocked account openings and limits on buying Vanguard mutual funds from abroad.
Bottom line: Usually not practical for Americans overseas.
Recommendation
For U.S. citizens living abroad, Charles Schwab stands out for flexibility, access and expat-friendly policies.
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I personally use Vanguard, I am considering making a change. But I am not sure the juice is worth the squeeze.
I retired and moved to Mexico 5 years ago. My personal experience is that Schwab is the best investment firm to work with.
1) Schwab refunds all ATM fees worldwide (you can use your Schwab debit card at any ATM) and charges no foreign transaction fees. I can access my U.S. funds either by ATM withdrawal or by sending a wire transfer from Schwab to my Mexican bank. (It’s always good to have multiple ways to access your money back in the U.S., because stuff happens). Some of us keep our U.S. Schwab accounts while others open a Schwab International account if Schwab operates in their country. Schwab is also good about mailing your new debit card to a foreign country when the old one expires. And it’s easy to have your Social Security check direct deposited into your Schwab account, and transfer money as needed to the country you live in.
2) I’ve been able to keep my Schwab and Vanguard accounts, and can sell my existing investments. I can have dividends deposited automatically, but can’t buy new mutual funds although Schwab does let you buy ETFs (I don’t think Vanguard does). This is fine for me as a retiree in the decumulation phase of life, but challenging for Americans working abroad and trying to save for retirement. It’s also hard to find a a U.S. financial advisor who can work with clients abroad.
3) Your financial life will be much easier abroad if you keep a U.S. mailing address and a U.S. phone number. To get access to U.S. financial accounts, you often have to receive a six-digit code by text. Many U.S. financial institutions will only text that code to a U.S. phone number. It’s also a good idea to keep your U.S. credit cards. You won’t have a credit history yet in your new country, so it can take a few years to get local credit cards or other forms of credit.
What about Merrill Lynch?
I had to close my Merrill Lynch account when I retired abroad.
I am an expat who had long standing accounts at Fidelity and Schwab, before I departed the US.
1) Fidelity sent me the warning letter that they knew I was outside the US and would be restricting my account activity, with a gentle suggestion to leave. According to others, this letter is often followed by a termination by Fidelity and a request of where to send your proceeds. I’ve confirmed with two different offices that I would need to make plans to leave at some point, and rather than having to deal with this problem as a surprise, I began the process of finding a solution.
2) Schwab has an international branch to which customers can transfer accounts for management. However, they do NOT cover all countries. My home country (Italy) is not covered, so I was on borrowed time with Schwab.
3) My choices were limited. I first placed my accounts with Creative Planning, the international unit. It was more expensive than I’m used to paying, and my advisor was dismissive of my Boglehead portfolio and me. After paying the AUM fee for awhile, I kept my ears open for another option.
This year, a friend suggested Interactive Brokers. Their reputation was that their website was complicated to navigate, and their low cost strategy does not include hand-holding. And, several comments were made that it could take weeks to open a new account. But, I was tempted by the lack of fees for advisory services. So, I decided to open an account and see how it went. Well, I had no problems opening the first account. And I was offered an online introductory session with an advisor, which gave me a chance to ask questions. I cruised around the website/app, and won’t be using any of the fancy stuff available (made for day traders, options traders, etc. etc.). I’ve made draws and it was fast and seamless. The transfer of my accounts was easy, same as my experience with Schwab and Fidelity when I set up with them. So far, so good.
P.S. for cash withdrawals, I use my WISE debit card. I’m leary of using a debit card attached to a large account outside the country of the ATM, so I never used my Schwab nor Fidelity cards at ATMs.
Good personal experience addition to an already useful post. I’d be curious what @OldITguy knows about security at Interactive Brokers.
Hi Michael. Sorry, but I don’t have anything to share about Interactive Brokers security as I’ve never used them.
Your depth of personal experience is helpful.
#3 restrictions may not matter if you already have all your accounts open and you only buy ETFs.
Good to know… This info should just be the start of someone’s research. I have been told that Charles S. also allows free ATM’s around the world but that should be verified.
I believe Fidelity does too.
Thanks for this information, William. I have an expat family member who uses the third option. I will make sure the person sees this article and considers changing. First time that I recall this issue being on HD – Thanks. I’m sure it affects many besides me.