Skip to comments.Fidelity Bans U.S. Investors Overseas From Buying Mutual Funds
Posted on 07/02/2014 9:05:47 AM PDT by reaganaut1
Fidelity Investments and other asset managers are telling U.S. clients who live outside the country that they can no longer buy or trade mutual funds in their brokerage accounts.
Stephen Austin, a spokesman for the financial-services firm, said the change, effective Aug. 1, was prompted by "today's continually evolving global regulatory environment," but he said it wasn't in response to a specific issue.
The change will affect about 50,000 accounts, or less than 0.3% of Fidelity's 20 million accounts, he said.
"Customers will not be forced to sell holdings simply because they live in a foreign country," Mr. Austin said.
Observers said fund managers are becoming more conservative in the wake of global developments such as the U.S. Foreign Account Tax Compliance Act and other U.S. efforts.
Following large settlements paid to the U.S. by Credit Suisse Group AG and BNP Paribas SA, "Other countries are getting angry about the size of the fines and are grumbling about retaliation," said Jonathan Lachowitz, a cross-border investment adviser based in Lexington, Mass., and Lausanne, Switzerland.
Mutual funds are regulated differently from other investments and could be a target, he said.
David Kuenzi, an investment manager in Madison, Wis., who works with Americans abroad, said that selling U.S. mutual funds to those investors had long been prohibited. "But it was matter of 'Don't ask, don't tell.' Now the firms are getting more aggressive about compliance," he said.
(Excerpt) Read more at finance.yahoo.com ...
Why would you want to pay mutual fund management fees when you can buy and sell Exchange Traded Funds?
They are doing those investors a favor by removing the option to invest in an underperforming asset class.
That’s all true, and I agree with you, but most investors wouldn’t know an ETF if they woke up next to it in bed.
I think what this really shows is how Progressives are destructive to free markets.
This is pure politics with no substance. Fidelity can't be saying that some member of the president's entourage can't go on line in his London hotel and place a trade. If he can, then the same applies for an Iowan farmer who's been working on an Australian station for the past two years.
My bet is what's really happening is that Fidelity's trying to sweet talk the IRS out of some big hit to their corp taxes. A hefty Dem campaign donation will soon follow...
There are index mutual funds with expense ratios about as low as index ETFs.
I suppose this includes Fidelity employees who live and work in London, Hong Kong and other global banking centers
What about all the internationally-based employees who have these funds in their retirement accounts and pension plans?
Fidelity is nasty anyway. I took all my money out years ago when they threw a corporate fundraiser for Barney Frank
Fidelity sucks. I left their overpriced brokerage years ago. Scottrade has better research tools and reasonable rates. They got my 401(k) rollover portion when I found out the portion of my company 401(k) in money markets and other near liquid investments was taking fees which resulted in negative returns. Screw that!
Agree totally. The only reason I have any mutual funds is because that’s all my 401k will allow, and I can’t pass up the employer match. But all my investments outside my 401k are stocks & ETFs and their performance kicks the mutual funds’ @ss
That's my story too --iirc my xfer happened about 15 years ago. ScottradeELITE is super, and just one of may advantages.
Might as well just order all expats (and more importantly, their assets) “Home to the Reich” right away. FATCA’s making it impossible for people to bank or invest overseas does the same thing.
According to the article the rule doesn't effect workplace retirement plans such as 401K and 403B. It does effect personal IRA's and regular accounts.
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