Why US Brokerages Are Closing Expat Accounts, and What to Do About It

Victor E Gersten, M.S., CFP®

If your US brokerage has restricted your account because you live in Spain, the tax consequences of the fix matter more than the closure itself.

A letter that begins “we are no longer able to service your account” is one of the more unsettling things an American in Spain can find in the mail. It usually arrives without warning, gives you 30 to 60 days, and offers two paths: move the account elsewhere, or have the positions liquidated and the proceeds sent to you.

This is a very common situation for individuals who relocate internationally, and there are well-established procedures to handle it properly. That said, the consequences land entirely on you, including a tax bill in two countries whose timing you did not choose.

What follows is what is driving these restrictions, which firms have been publicly connected to them, what still tends to work in 2026, and the sequence to follow if a notice has already arrived.

Why US Brokerages Are Restricting Expat Accounts: The Regulatory Reason

A lot of writing on this topic points to one rule and treats it as the cause: FinCEN’s 2024 investment adviser rule, which extended Bank Secrecy Act anti-money-laundering requirements to registered investment advisers.

I want to be accurate about the status of that rule, because it is frequently described as being in force and it is not. It was finalized in August 2024 with an original effective date of January 1, 2026. FinCEN then issued an exemptive order in August 2025, proposed a delay in September 2025, and has since issued a final rule postponing the effective date to January 1, 2028.

So the compliance burden is coming, but it has been pushed out by two years. Meanwhile, account restrictions on non-resident clients have been happening steadily for well over a decade, which tells you the driver was never that single rule.

From a big-picture perspective, the honest explanation is a stack of overlapping costs rather than one regulation:

The FATCA piece is the one most people underestimate, because the reporting chain it creates runs through the financial institution as much as through you. The IRS publishes a plain summary of what FATCA means for individuals, and it is worth reading once.

Keep in mind that none of this is a judgment about you as a client. A firm that decides Spain is not a market it wants to be licensed in restricts every Spanish-resident account it holds, regardless of balance or tenure.

Which Firms Have Restricted or Closed Expat Accounts

I am going to be careful here, because most published lists of “brokers that close expat accounts” are copied from each other and cannot be traced back to anything.

What can be sourced: Merrill Lynch closed accounts belonging to US expatriate clients, as reported by International Adviser. Separately, a Cerity Partners analysis of the cross-border wealth market identifies Morgan Stanley, Wells Fargo, UBS, Ameriprise, Edward Jones and USAA as firms that have exited or restructured their cross-border operations. That second source is an industry analysis published by another advisory firm rather than a statement from the institutions themselves, and it is worth reading as such. I am repeating what has been reported, not making a claim of my own about any firm’s current policy, and none of these firms has confirmed anything to me. Policies also change, they differ between the brokerage arm and the retirement plan arm of the same institution, and they often turn on the address on file rather than on citizenship. Verify your own institution’s current policy with your own institution, in writing.

Other large fund companies and retirement providers get named constantly in expat forums, but I could not independently source those claims for Spain-resident clients, so I am not repeating them here.

The more useful point is how these policies actually behave:

• They change without public notice, and often without a press release of any kind.
• The brokerage arm and the retirement-plan arm of the same institution frequently have different rules, so your 401(k) and your taxable account can be treated in opposite ways.
• The trigger is usually the address on file, not your citizenship. Updating your address to a Spanish one is what surfaces the account in the firm’s review queue.

Because of all that, please verify your own firm’s current policy directly, in writing, rather than trusting any published list. That includes this one. A list compiled in August 2026 may be wrong by October.

Which Custodians Still Work for Americans in Spain

I am not going to publish a confident roster of custodians that “will take you,” because the roster changes and a stale answer here can cost someone real money. What I can describe are the categories that tend to work.

The first is a US brokerage with a dedicated international division. Schwab, for example, states on its own international site that it serves US expat clients with USD-denominated brokerage accounts while living abroad, with the explicit caveat that not all products, services or investments are available in all countries. It does not name Spain specifically, and that caveat is doing real work, so confirm your country before assuming.

The second category is a custody platform that supports non-resident clients through an adviser relationship. When the account sits on an adviser’s platform, the responsibility for knowing the client is structured differently, and some platforms accept residents of countries they would not accept directly.

Interactive Brokers is widely described by expat-finance sources as continuing to accept US citizens resident in Spain. I could not locate a primary statement from the firm confirming that for Spain, so treat it as a lead to verify rather than a settled fact.

In every case, ask a specific question rather than a general one. Not “do you accept expats,” but “do you accept a US citizen who is tax resident in Spain, with a Spanish address, and what restrictions apply once that address is updated.”

The MiFID II Problem: Why This Affects What You Can Buy, Not Just Where You Hold It

Even with an account that survives, a second layer of rules changes what you are allowed to buy. This is the part that surprises people who assumed the only issue was custody.

Under the EU’s PRIIPs Regulation, most packaged retail investment products, including ETFs, cannot be sold to an EU-resident retail client unless the manufacturer publishes a Key Information Document in the investor’s language. US ETF issuers generally do not produce PRIIPs KIDs, because nothing in US law requires one and the format does not map onto US disclosure.

The practical result is that EU-resident investors, including US citizens living in Spain, are generally blocked from buying US-domiciled ETFs. Two nuances matter. First, this restricts new purchases rather than automatically forcing a sale of what you already own. Second, the outcome varies by broker and by how you are classified, so two Americans in Madrid can get different answers from different firms.

The squeeze that defines cross-border investing

Now put that next to the US tax treatment of non-US funds. A European-domiciled fund or ETF is generally a passive foreign investment company for US purposes, which brings the punitive PFIC regime, Form 8621, and a tax calculation that can consume much of the return.

So the American in Spain gets pressed from both sides: EU rules restrict buying US funds, and US tax rules punish owning EU funds. That squeeze, rather than the closure letter itself, is the real planning problem, and it is why a portfolio that was fine before the move often needs rebuilding after it.

What Happens When Your Account Is Closed: The Forced Sale Tax Problem

If you let the firm liquidate the account, you have not just changed custodians. You have executed a taxable disposition on the firm’s schedule instead of your own.

In the United States, that liquidation realizes capital gains across every position sold. Years of unrealized appreciation can land in a single tax year, which may push you into a higher bracket, affect other thresholds tied to income, and remove the flexibility you would normally have to spread gains across years.

In Spain, the same sale is also a taxable event. Gains fall into the savings base (base del ahorro) and are taxed on a scale running from 19% to 30%, so a Spanish resident is looking at two calculations on one forced transaction.

The interaction between the two is not automatic. The foreign tax credit can relieve double taxation in many cases, but the two countries can sequence and characterize the same gain differently, and the credit is claimed on a return filed after the fact. Relief that arrives a year later does not help the cash flow of a sale that happened in March.

There is also the planning damage, which is harder to see and often larger. A multi-year Roth conversion sequence, or a capital-gain harvesting plan built around Spain’s savings-base brackets, can be undone by a liquidation nobody planned.

What to Do If You Receive a Closure Notice, Step by Step

The order of operations matters more than any single step. Here is the sequence I would work through.

• Read the notice for two things, the exact deadline and the default action if you do nothing. The default is usually liquidation, which is the outcome you are trying to avoid.
• Find out whether this is a closure or a restriction. Some firms restrict the account to sales only, or to holding cash, without closing it, and that changes your timeline considerably.
• Pull a full position list with cost basis and lot detail before anything moves. Basis information can be harder to recover after a transfer, especially for older lots.
• Check the address on file, and whether any US address still on the account is genuinely yours. Do not solve this by supplying an address you do not live at.
• Open and confirm the receiving account first. Confirmed means the new firm has accepted your Spanish residence in writing and told you which of your holdings it will accept.
• Get the two-country tax picture before authorizing any sale, including which positions would generate gains and what that does to your US bracket and your Spanish savings base.
• Treat retirement and taxable accounts as separate projects, because the mechanics and the consequences of getting them wrong are different.

That sixth step is where a cross-border adviser earns the fee, and it is also where the split between a tax preparer and a financial planner tends to fail people. The question of what a forced sale costs you and the question of how the money gets reinvested afterward are the same question, and they need to be answered in one conversation.

How to Transfer Your Holdings and Avoid an Unnecessary Sale

The mechanism that helps most here is an in-kind transfer between US brokerages, processed through ACATS. An in-kind transfer moves the securities themselves rather than selling them. Because there is no sale, there is generally no disposition to report, which is the whole reason to prefer it over liquidating and re-buying. That said, whether any particular transfer is free of tax consequences in both countries depends on the account type, the holdings and your own position, so I would confirm it for your accounts rather than assume it.

The practical constraints are where people get hurt. The receiving firm has to accept both your country of residence and your specific holdings, and those are two separate approvals. Some funds are closed to new accounts, some are proprietary to the delivering firm, and some cannot be held on the receiving platform at all.

A transfer can also fail partway. The bulk of the account arrives, a handful of positions reject, and those rejected positions stay at the old firm against a deadline that is still running. If you have not planned for that, they get liquidated by default.

Retirement accounts follow a different path. Moving an IRA is a trustee-to-trustee transfer rather than an ACATS transfer in the ordinary sense, and an employer plan may have its own rules about non-resident participants.

The point worth repeating is that once positions are sold, there is no undo. A transfer that fails can be retried, but a liquidation cannot be reversed, and the gain is realized in the year it happened.

Setting Up Your Accounts Before You Move: The Checklist

Almost everything on this list is easier before you leave the United States, and several items become impossible afterward. The account you can open before you move is often not available to you once your address changes.

• Ask every institution you hold, in writing, what its current policy is for a client who becomes tax resident in Spain. Keep the reply.
• Find out what happens to your employer 401(k) when you leave the country, and whether the plan permits a non-resident participant to remain in it.
• Consider consolidating accounts before the move rather than after. Fewer relationships means fewer policies that can change on you.
• Keep a US address only if it is genuinely yours. Giving a broker an address you do not live at creates problems with the firm, with FATCA reporting and with Spanish residency questions.
• Confirm your US bank will keep the account you need for estimated tax payments and IRS refunds, since a Spanish address can affect banking relationships too.
• Rebuild the portfolio for the destination, not the origin. Holdings that are efficient for a US resident may be unbuyable or unwise once PRIIPs and PFIC rules apply.

Work With a Cross-Border Advisor Before Your Account Gets a Closure Notice

What a cross-border adviser actually does here is fairly concrete. We inventory where your assets sit and which of those institutions are likely to restrict a Spanish-resident account, and we confirm current policies directly rather than relying on lists. We map the in-kind transfer, including which specific holdings the receiving firm will accept, before anything is initiated. And we model what a sale would cost in both countries, so that if some positions have to be sold, they are sold in the order and in the tax year that makes the most sense for you.

The reason this belongs in one conversation is timing. A closure notice gives you weeks, not months, and the tax consequence of a forced sale and the plan for reinvesting the proceeds have to be settled inside that window rather than sequentially. I hold both the CFP® certification and an Enrolled Agent license, so those two questions get decided together. Cross Border Wealth Advisors is a fee-only fiduciary firm and does not receive commissions or product-related compensation.

Everything above is general information about how these rules work, and not advice about your accounts, your holdings or your tax position. Those depend on facts I would need to see. If you are moving to Spain, or you are already there and holding a letter from your custodian, you can schedule an introductory conversation at http://www.cbwealthadvisors.com or email info@cbwealthadvisors.com, and we can look at the actual accounts together.

Sources

Primary sources are cited first. Links are provided for the reader’s convenience and are current as of the publication date.

• FinCEN, Final rule postponing the effective date of the investment adviser rule to 2028.
• IRS, FATCA information for individuals.
• International Adviser, Merrill Lynch ditches US expats in account closures.
• Cerity Partners, Why major U.S. brokerage firms are closing accounts owned by foreign residents.
• Charles Schwab International, US expat investing.

Important disclosures

This article is general educational information published by Cross Border Wealth Advisors, a company of Gersten Financial Planning Inc. an investment adviser registered with the State of California (CRD 309890). Nothing in it is investment advice, tax advice, legal advice, or immigration advice, and nothing in it is an offer or solicitation to buy or sell any security.

Tax and reporting rules in the United States and in Spain change, and their application depends entirely on your own facts. Figures, thresholds, rates and filing dates are stated as of the publication date shown above and may have changed since. Before acting on anything described here, consult a qualified professional about your own situation. Where this article says a point is unsettled or unconfirmed, that statement is deliberate and should be treated as a reason to seek advice rather than as a conclusion.

Cross Border Wealth Advisors is a fee-only firm and acts as a fiduciary to its advisory clients. The firm does not sell products and does not receive commissions. Registration with any state securities authority does not imply a certain level of skill or training.

No portion of this article should be read as a promise, guarantee or prediction of any particular tax, investment or planning outcome. Any calculation shown is a hypothetical illustration using round numbers for the purpose of demonstrating a mechanic. It is not a representation of any client’s experience, is not a projection of results, and does not reflect the performance of any actual account.

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