Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

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Topic Author
JohnFiscal
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Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

[2021 thread bumped in 2022 --admin LadyGeek]

update: (7-14-2021): I sent an internal message to Vanguard about disposition of accounts when moving to a Canadian residence (and the response might vary depending on the expat's country of residence). I just got this reply...which is nice to have in writing. This may be useful now or in the future for other Vanguard owners.

Thank you for your email. I'm happy to provide clarification. Please note that no action will be taken due to a relocation until you change the address to a foreign address on your accounts.

You can continue to hold your existing accounts with Vanguard if you relocate to Canada. However, Vanguard does not open new retail accounts for Canadian residents, regardless of citizenship.

Also, Vanguard will not permit purchases or exchanges in existing accounts held by Canadian residents. Shareholders who relocate to Canada will no
longer be permitted to purchase or exchange shares in their fund accounts.

The policy for Canadian residents does not apply to reinvestments of dividends and capital gains within the originating fund

These policies apply to both the mutual fund and brokerage accounts.

If you have additional questions, we are happy to assist. Please contact us
at 877-662-7447. Our representatives are available business days 8 a.m. to
8 p.m., Eastern time.

Best regards,

A... E...
Registered Representative
Vanguard Retail Investor Group






Edit : thanks, I received some good comments. Rather discouraging though. How about my first bullet point? Sound unreasonable to live with that for a long time?



err, I need help.

I am about 99% along the path of moving from the US to Canada as a permanent resident with spousal sponsorship (wife has dual US and Canadian citizenship). I have not yet "landed" as an immigrant at the border, which is the final step, and we are still in the US. We will be retiring there as I am 69 and have no intention of working in either country.

I have become greatly concerned with expat financial/investing issues. I assumed that I could maintain my accounts at Vanguard but was informed that I'd be closed down. One of the last things I want is to be told something like I have 45 days to transfer our accounts elsewhere or they will mail me a check for the IRAs. That's the most distressing aspect, having the regular (non-Roth) IRAs being shut down and possibly taxed in full by the US as a distribution.

However, two Flagship representatives verified that the IRAs can be maintained, and one called back later to confirm that the taxable accounts can be maintained as well. But a huge restriction is that the only transactions permitted would be withdrawals. So, no new investments (not a problem) but that also means no rebalancing, no switching funds, etc. But I haven't been one to change things up too much over the years and I am generally comfortable with our asset allocation. Mostly invested in index funds (stock/bond) with a bit in VPMAX and VGHAX. So I am in a quandary.

  • Based on the information from Vanguard one possible path is to leave our accounts at Vanguard (USA) while our residence is in Canada, This might not be so bad? I think that an asset allocation could be maintained through judicious withdrawals from the accounts. Or perhaps put everything into some sort of balanced fund?

    (For reference, the accounts at Vanguard include $1.7M IRAs, $350K Roths, and $200K taxable.)
  • Another technique that many people seem to use is to maintain some presence in the US. By having an actual property. Or by using the address of a relative, etc. I have seen discussion of this in the Financial Wisdom Forum (Canadian Bogleheads) as well as here and in other forums. I have read of potential problems with this method as well and really don't relish being subjected to huge fines and loss of capital.
Comments appreciated.
Last edited by JohnFiscal on Wed Jul 14, 2021 3:43 pm, edited 2 times in total.
tj
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Re: Likely expat, what to do with Vanguard?

Post by tj »

Most expats switch to a different broker as Vanguard does not play nice.
7eight9
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Re: Likely expat, what to do with Vanguard?

Post by 7eight9 »

You might want to look at Charles Schwab. They welcome expats.

https://international.schwab.com/expatriate-essentials
I guess it all could be much worse. | They could be warming up my hearse.
Topic Author
JohnFiscal
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Re: Likely expat, what to do with Vanguard?

Post by JohnFiscal »

tj wrote: Fri Jul 09, 2021 8:52 am Most expats switch to a different broker as Vanguard does not play nice.
I"m all ears should you have any suggested brokers :- )
zuma
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Re: Likely expat, what to do with Vanguard?

Post by zuma »

Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
Topic Author
JohnFiscal
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Re: Likely expat, what to do with Vanguard?

Post by JohnFiscal »

7eight9 wrote: Fri Jul 09, 2021 8:59 am You might want to look at Charles Schwab. They welcome expats.

https://international.schwab.com/expatriate-essentials
Thanks for the tip. I have looked into Schwab (who I had a SImpleIRA at and actually like) but if I understood correctly "Canada" is an exception for Schwab International. But I will have to double and triple check this.

Now I am reminded that the Vanguard representative mentioned that expats were okay with Vanguard (though with the restricted transactions) except for a short list of countries, including the "axis of evil"... North Korea, Iran, and a couple that I forget.... "oh, and Canada". So Vanguard, for whatever reason, lumps Canada in with the "axis of evil". Though I think this is actually due to specific regulatory issues in Canada and the US (and that may have affected Schwab as well).


EDIT: spun around on the phone with Schwab this morning, not impressed. But following the website:

this looks good https://international.schwab.com/expatriate-essentials#

then I select "open an account" https://international.schwab.com/open-account-intro

select "Canada" and get "Schwab currently cannot open accounts for residents of your country/region. Please check back with us in the future. "

This was also the case for every other country I tried so far (a handful, including France)

"bummer dude" :- (
Last edited by JohnFiscal on Fri Jul 09, 2021 10:08 am, edited 1 time in total.
Topic Author
JohnFiscal
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Re: Likely expat, what to do with Vanguard?

Post by JohnFiscal »

zuma wrote: Fri Jul 09, 2021 9:00 am Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
Thank you for the tips.

Over the past dozen years I have logged in to Vanguard from both the Philippines and Canada. I have a VPN subscription for this purpose but I believe I have tried logging in without it when I am in a secure location ...though I don't recall the results when I did so. I do log in to a number of Canadian financial/government sites from here in the US while assisting family members and there's generally been no issue.
Marseille07
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Re: Likely expat, what to do with Vanguard?

Post by Marseille07 »

zuma wrote: Fri Jul 09, 2021 9:00 am Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
PMB can stop working, as all of them hand out a commercial address: https://nomadlist.com/how-to-handle-pro ... ation/6188

You need a *residential* address on file.
zuma
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Re: Likely expat, what to do with Vanguard?

Post by zuma »

Marseille07 wrote: Fri Jul 09, 2021 9:22 am
zuma wrote: Fri Jul 09, 2021 9:00 am Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
PMB can stop working, as all of them hand out a commercial address: https://nomadlist.com/how-to-handle-pro ... ation/6188

You need a *residential* address on file.
Interesting.

Personally, I've used a virtual address as an expat for nearly a decade without problems, and I know others who have done the same.
Marseille07
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Re: Likely expat, what to do with Vanguard?

Post by Marseille07 »

zuma wrote: Fri Jul 09, 2021 9:39 am
Marseille07 wrote: Fri Jul 09, 2021 9:22 am
zuma wrote: Fri Jul 09, 2021 9:00 am Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
PMB can stop working, as all of them hand out a commercial address: https://nomadlist.com/how-to-handle-pro ... ation/6188

You need a *residential* address on file.
Interesting.

Personally, I've used a virtual address as an expat for nearly a decade without problems, and I know others who have done the same.
Yeah, it really depends on the financial institution. USPS database has all the info, but not all financial institutions check regularly; maybe some of them never.
lazynovice
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Re: Likely expat, what to do with Vanguard?

Post by lazynovice »

It goes unnoticed sometimes but this site has a non-US forum. Never visited it but wanted to make sure you know it is there.

viewforum.php?f=22

There is even a Canadian sister site

https://www.financialwisdomforum.org/forum/
halfnine
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Re: Likely expat, what to do with Vanguard?

Post by halfnine »

zuma wrote: Fri Jul 09, 2021 9:39 am
Marseille07 wrote: Fri Jul 09, 2021 9:22 am
zuma wrote: Fri Jul 09, 2021 9:00 am Generally speaking, you won't have trouble as an expat if you:

1) have a US address on file with your brokerage (e.g. a virtual mailbox address)
2) connect to your accounts with a VPN (using an IP address based in the US)
3) don't actively inform your brokerage that you are living outside the US
PMB can stop working, as all of them hand out a commercial address: https://nomadlist.com/how-to-handle-pro ... ation/6188

You need a *residential* address on file.
Interesting.

Personally, I've used a virtual address as an expat for nearly a decade without problems, and I know others who have done the same.
I also have used a virtual address as well for at least a decade, however I don't suspect it will continue to last. I've opted for multiple brokerage accounts to diversify the risk.
Topic Author
JohnFiscal
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Re: Likely expat, what to do with Vanguard?

Post by JohnFiscal »

lazynovice wrote: Fri Jul 09, 2021 9:47 am It goes unnoticed sometimes but this site has a non-US forum. Never visited it but wanted to make sure you know it is there.

viewforum.php?f=22

There is even a Canadian sister site

https://www.financialwisdomforum.org/forum/
thanks for the interest. I appreciate it.

I am aware of those. I've been a member of financialwisdomforum.org/forum/ for a number of years and they are helpful.

The "non-US" forum doesn't address US expatriates. I have been reading through there as well and it's been pointed out that it's not the place for expatriates (though that might not stop me from posting there, in fact I may have done so recently)
Last edited by JohnFiscal on Fri Jul 09, 2021 2:08 pm, edited 1 time in total.
AlohaJoe
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Re: Likely expat, what to do with Vanguard?

Post by AlohaJoe »

JohnFiscal wrote: Fri Jul 09, 2021 8:41 am Another technique that many people seem to use is to maintain some presence in the US. By having an actual property. Or by using the address of a relative, etc
I have lived outside of the US for many years at this point. There are various workarounds like this. However, my advice is to just try to find a broker that doesn't require workarounds. The problem is that a work around can suddenly stop working and fixing the problem isn't easy when you're living in a different country.

Some actual problems I've had:

1) When I first moved overseas long ago there was no such thing as 2FA for anything. Gradually it went from optional to mandatory on one of my accounts. And they only allowed US phone numbers to be used. Except I no longer had a US phone number. (Why would I? I hadn't lived there in over a decade.) Buying a second phone and paying a monthly fee for cell phone service just to get a 2FA token two or three times a year felt ridiculous. Setting up Google Voice when you don't already have a US phone number was (and still is?) impossible.

So I had no access to that account for several months until I made an international flight back to the US, picked up a pre-paid SIM, and set up Google Voice.

2) A few years pass. One day Google Voice is no longer allowed for 2FA from that financial institution. I call them and they tell me that VOIP was "insecure" and no longer allowed. They told me to go into my local branch, show ID, and someone there would help me.

Again, I had no access to the account for a few months until I had another trip back to the US. I had to take a few hours out of the trip one day to go to a local Wells Fargo to sort it out.

Financial institutions that assume you are in the US often have all kinds of hidden processes that break when you are outside of the US. Need to reset a PIN? Just go to your local branch. Need to send a wire transfer internationally? Just go to your local branch. Need to get a Medallion Signature Guarantee? That's not even possible outside of the US....

Vanguard sends a postal mail letter when sensitive parts of your account change, to ensure you are aware that you may have been hacked. If you aren't able to read that letter in a timely manner and someone has hacked your account....

The problem is that you often run into these things at the worst possible moment.
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Re: Likely expat, what to do with Vanguard?

Post by TedSwippet »

JohnFiscal wrote: Fri Jul 09, 2021 9:56 am The "non-US" forum doesn't address US expatriates. I have been reading through there as well and it's been pointed out that it's not the place for expatriates (though that might not stop me from posting there, in fact I may have done so recently)
Several US expats are regulars on the non-US forum, and there are sporadic posts from US expats asking there for help. Mods sometimes move expat posts between forums, aiming for clarity but with mixed results (an investing question from a US expat may be -- but is not always -- related to their being an expat, and it is not necessarily easy to tell). The bulk of traffic on the non-US forum is certainly from US nonresident aliens (NRAs), though.

The problem is that US tax rules place US expats in both camps -- US and non-US all at the same time. A unique and unenviable intersection point on a tax Venn diagram. The local-country investing solutions used commonly by NRAs will be most immediately available and visible to US expats, but are nearly always a poor fit (and probably a US tax-damaging one). And the solutions used commonly by US residents are often either unavailable to US expats, or inappropriate for them, or both.

The problem isn't just on the forums either. The non-US section of the wiki is similarly rather confused on the issue. It focuses mostly on NRAs, just with a few US expat items shoehorned in here and there.

The result seems to be that US expats are I think under-served by the forum and wiki. However, I'm not sure what the solution is. A separate forum specific to US expats seems superficially appealing, but there's a real risk that only US expats would then visit it (their numbers here are not huge), and this would miss out on expertise or knowledge from non-expats or US NRAs who might have usable information.
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moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by JohnFiscal »

[Thread merged into here --admin LadyGeek]

update (July 13, 2021): My questions are still valid but this is a moot point regarding TD Ameritrade. I have seen some discussions here and at the Financial Wisdom Forum (Bogleheads North) that TD Ameritrade would "work" for my situation. However, I discussed with a representative on the phone today and was told that upon my indicating a Canadian address they would promptly shut down our accounts. So TDA is a dead duck I believe. (maybe I shouldn't rely on a phone call but go in there local office this week).


I'd appreciate some thoughts on moving my accounts from Vanguard to TD Ameritrade, this is due to our upcoming move from the US to Canada.

(consider this an update from my thread viewtopic.php?f=2&t=353145)

I'm considering moving all my Vanguard accounts to some other firm, and TD Ameritrade may be suitable for my circumstances. Not that I am enthusiastic about this move.

With an upcoming retirement emigration from the US to Canada I find Vanguard is not so receptive to retaining my patronage (ongoing since 1984). It seems that TD Ameritrade may be a good option for me... importantly, they maintain accounts for Canadian residents with the ability to have full control over account transactions; Vanguard would maintain the accounts but permit only distributions (so, no rebalancing). I will be a permanent resident in Canada, my wife has Canadian citizenship.

I am unsettled about moving most of our assets from Vanguard to a brokerage firm. I find that I'm ingrained with the "mutual fund company" mentality rather than "brokerage account" mentality, I have not yet converted to the Vanguard "brokerage" account system (except for wife's small-ish Roth IRA, to test the waters). 
  • I want to continue to DIY, like I've done for many years (I do have some experience with other fund families and with "advisers"; I even had a Simple IRA at Schwab for several years, and that was fine).
  • I'm not sure how this works with a place like TD Ameritrade. Do I have to work with a "broker" who is going to want to sell me stuff? Can I just buy my desired index funds and leave it at that? Can the Vanguard accounts be moved somehow as "in kind", or must they be liquidated and then new funds purchased?
  • I never needed any hand-holding from Vanguard but for a move of $2M+ I think I will go down to the local TD Ameritrade office to discuss this.
  • would it be a good idea to move accounts in tranches over a period of time? Maybe not a bad idea, I could even leave some at Vanguard.
The bulk of the Vanguard accounts are IRAs ($1.7M), plus some Roths ($350K) and taxable ($220K). I am not yet taking distributions from the IRAs but expect to be doing so in the next 1-2 years. I don't foresee adding any new money to the IRAs, but there may be the desire for reallocation, which Vanguard would not permit.

I would appreciate any comments. 
Last edited by JohnFiscal on Tue Jul 13, 2021 5:53 pm, edited 1 time in total.
runninginvestor
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Re: moving from Vanguard to TD Ameritrade due to location

Post by runninginvestor »

Are you able to transact at VG currently and for how long until you move?

I ask because you may want to consider:
1. Any transaction fees for buying/selling VG funds at TD
2. You may be able to avoid those transaction fees at TD (or another brokerage) if the new brokerage will waive fees once transferred so you can get out of those funds and into no transaction fee funds there, OR if you have eligible funds at vanguard that you can do the tax free MF to ETF conversion for. Except you'd need to be in a VG brokerage account for that, I imagine. Most brokers have no fees for trading ETFs.

Edit to add:

In a brokerage account, you can buy and sell MFs, ETFs, stocks, etc on your own, usually online. Most places don't charge a commission for those, some charge transaction fees for certain mutual fund families (usually competitors)

I'm not sure how it works when changing countries, but typically you can transfer assets in kind between brokerage firms without liquidating the securities as a taxable event. There may be taxes if you are changing countries though. When transferring, it's usually initiated by the receiving firm.

As far as moving in tranches, I believe VG doesn't charge a fee for partial account transfers (or full account transfers) but may want to double check.
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beyou
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by beyou »

JohnFiscal wrote: Mon Jul 12, 2021 9:47 am
  • I'm not sure how this works with a place like TD Ameritrade. Do I have to work with a "broker" who is going to want to sell me stuff? Can I just buy my desired index funds and leave it at that? Can the Vanguard accounts be moved somehow as "in kind", or must they be liquidated and then new funds purchased?
  • I never needed any hand-holding from Vanguard but for a move of $2M+ I think I will go down to the local TD Ameritrade office to discuss this.
  • would it be a good idea to move accounts in tranches over a period of time? Maybe not a bad idea, I could even leave some at Vanguard.
The bulk of the Vanguard accounts are IRAs ($1.7M), plus some Roths ($350K) and taxable ($220K). I am not yet taking distributions from the IRAs but expect to be doing so in the next 1-2 years. I don't foresee adding any new money to the IRAs, but there may be the desire for reallocation, which Vanguard would not permit.

I would appreciate any comments. 
Not only do you not need to work with a "broker", most brokerage firms would charge you extra commissions to have a person help you execute transactions vs doing so online.

I realize why TDA would be attractive to use in Canada, but not as TDA is being acquired by Schwab, things may change.
I assume you can still manage from Canada but other things may change after opening this account.

Finally I would see if etrade allows you to manage the account from Canada.
They have no commissions on many Vanguard funds, hence it would be more economical if they can support you from Canada.
If not then TDA would require some transaction fees when buying/selling open end mutual funds, including Vanguard's.
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Re: moving from Vanguard to TD Ameritrade due to location

Post by JohnFiscal »

runninginvestor wrote: Mon Jul 12, 2021 9:58 am Are you able to transact at VG currently and for how long until you move?

I ask because you may want to consider:
1. Any transaction fees for buying/selling VG funds at TD
2. You may be able to avoid those transaction fees at TD (or another brokerage) if the new brokerage will waive fees once transferred so you can get out of those funds and into no transaction fee funds there, OR if you have eligible funds at vanguard that you can do the tax free MF to ETF conversion for. Except you'd need to be in a VG brokerage account for that, I imagine. Most brokers have no fees for trading ETFs.

Edit to add:

In a brokerage account, you can buy and sell MFs, ETFs, stocks, etc on your own, usually online. Most places don't charge a commission for those, some charge transaction fees for certain mutual fund families (usually competitors)

I'm not sure how it works when changing countries, but typically you can transfer assets in kind between brokerage firms without liquidating the securities as a taxable event. There may be taxes if you are changing countries though. When transferring, it's usually initiated by the receiving firm.

As far as moving in tranches, I believe VG doesn't charge a fee for partial account transfers (or full account transfers) but may want to double check.
Yes, I'm full-go at Vanguard currently and for some time yet.

Good point about fees/commissions. I want this to be as economical and simple as possible..."Vanguard" with a different name.

I could switch some or all of our accounts to "brokerage" pretty quickly. Did this for wife's Roth and it was over in a day. They provide a link on the summary of accounts to the effect of "convert this account", a different link for each account: joint taxable, my regular IRA, my rollover IRA, my Inherited IRA, and my Roth. Then I suppose moving from mutual funds to ETFs.

thanks for your comments.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by JohnFiscal »

beyou wrote: Mon Jul 12, 2021 10:43 am
Not only do you not need to work with a "broker", most brokerage firms would charge you extra commissions to have a person help you execute transactions vs doing so online.

I realize why TDA would be attractive to use in Canada, but not as TDA is being acquired by Schwab, things may change.
I assume you can still manage from Canada but other things may change after opening this account.

Finally I would see if etrade allows you to manage the account from Canada.
They have no commissions on many Vanguard funds, hence it would be more economical if they can support you from Canada.
If not then TDA would require some transaction fees when buying/selling open end mutual funds, including Vanguard's.
yeah, I don't need/want a broker. Though discussion with live person upon opening accounts (at wherever) would be appreciated...though I was always happy to open mutual fund accounts with Vanguard, Janus, Gabelli, Fairholme, and Longleaf without this. Though back in those days I didn't have a large account, nor concerned with taking money out as distributions.

I did see that Schwab now owns TD Ameritrade. Maybe that's one reason why Schwab International doesn't accept accounts from Canada residents.

thanks for the direction to etrade. Vanguard Canada does not sell retail but they give a link that lists a number of discount brokers, including Qtrade and QuestTrade (no relation?). I don't know if any of the listed brokers will hold US IRA accounts...that is a requirement in my mind. List is here https://www.vanguard.ca/en/investor/how-to-buy

thanks for your comments and direction to think about funds, fees, ETFs, etc.
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beyou
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by beyou »

JohnFiscal wrote: Mon Jul 12, 2021 12:05 pm
beyou wrote: Mon Jul 12, 2021 10:43 am
thanks for the direction to etrade. Vanguard Canada does not sell retail but they give a link that lists a number of discount brokers, including Qtrade and QuestTrade (no relation?). I don't know if any of the listed brokers will hold US IRA accounts...that is a requirement in my mind. List is here https://www.vanguard.ca/en/investor/how-to-buy

thanks for your comments and direction to think about funds, fees, ETFs, etc.
Well maybe some Canadian Bogleheads can help you decide if TD is the best option on the list linked above.
I would start though by seeing which ones if any can give you low or no commission trades of Vanguard funds and ETFs.
If you switch to ETFs you will have more options as I bet the commissions are much more competitive among the brokers on your list.
There are some open end funds without a sibling ETF but often there is an ETF that is "close enough" to substitute.
For IRA easy to switch without tax impact.
For taxable account I would suggest transition to Vanguard brokerage first, call them and ask to convert to ETF any funds eligible to do so.
Easier to move a brokerage account than a fund-only account, and easier to move ETFs than open end funds.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by JohnFiscal »

a bump to direct attention to my new comments in the original post. Apparently TD Ameritrade is not viable for Canadian residents.
cbeck
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by cbeck »

Get a US mail forwarding service located in a state with no income tax. Change your address of record on all your brokerage and bank accounts to the mail forwarders and you're done. Do not notify any financial institution of anything.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by Marseille07 »

cbeck wrote: Tue Jul 13, 2021 7:37 pm Get a US mail forwarding service located in a state with no income tax. Change your address of record on all your brokerage and bank accounts to the mail forwarders and you're done. Do not notify any financial institution of anything.
In this case, I think the OP will be fine with TD Ameritrade if they are Canadian-friendly as they describe. TD stands for Toronto-Dominion after all.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by cbeck »

Marseille07 wrote: Tue Jul 13, 2021 7:47 pm
cbeck wrote: Tue Jul 13, 2021 7:37 pm Get a US mail forwarding service located in a state with no income tax. Change your address of record on all your brokerage and bank accounts to the mail forwarders and you're done. Do not notify any financial institution of anything.
In this case, I think the OP will be fine with TD Ameritrade if they are Canadian-friendly as they describe. TD stands for Toronto-Dominion after all.
Or Vanguard.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by random_walker_77 »

cbeck wrote: Tue Jul 13, 2021 7:37 pm Get a US mail forwarding service located in a state with no income tax. Change your address of record on all your brokerage and bank accounts to the mail forwarders and you're done. Do not notify any financial institution of anything.
That's asking for trouble, in my opinion. Murphy's law states that they'll find out and do something inconvenient, at the worst possible time. I'm not sure what that would be, but hypothetically speaking, having your account frozen until you can get a medallion signature guarantee would be pretty bad.

If you do this, you should also remember to use a VPN so that when you login to your account, it "looks" like you're in the USA...
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by random_walker_77 »

JohnFiscal wrote: Tue Jul 13, 2021 5:54 pm a bump to direct attention to my new comments in the original post. Apparently TD Ameritrade is not viable for Canadian residents.
Another option is to ask vanguard to convert your mutual funds to their equivalent ETFs. In a taxable account, this is a tax-free transaction. Get yourself an account with Interactive Brokers and then transfer your holdings over in-kind. Interactive Brokers is expat-friendly. They're also one of the best bets for currency conversions.

*if you search around, you can find referral codes that yield a nominal sign-up bonus
** be aware to avoid investing in canadian funds and ETFs (see "PFIC", and also the wiki page on tax pitfalls for expats: https://www.bogleheads.org/wiki/US_tax_ ... ing_abroad)
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by Marseille07 »

cbeck wrote: Tue Jul 13, 2021 9:13 pm
Marseille07 wrote: Tue Jul 13, 2021 7:47 pm
cbeck wrote: Tue Jul 13, 2021 7:37 pm Get a US mail forwarding service located in a state with no income tax. Change your address of record on all your brokerage and bank accounts to the mail forwarders and you're done. Do not notify any financial institution of anything.
In this case, I think the OP will be fine with TD Ameritrade if they are Canadian-friendly as they describe. TD stands for Toronto-Dominion after all.
Or Vanguard.
I'm not aware Vanguard is Canadian-friendly. I thought this is why the OP is considering switching.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by FLbiker »

I responded to your thread on FWF, but just to put it here as well -- I'm a US citizen and Canadian permanent resident, currently living in Canada. I opened two IRA accounts (one Roth, one traditional) with TD Ameritrade about a month ago, using a Canadian mailing address. I've since moved my Roth from Vanguard to there (the traditional is a potential destination for a 403b in the future). Before doing this, I spoke on the phone to someone at TD Ameritrade and was assured that I could both open and keep an IRA account with them with a Canadian address, and this has been my experience.

That being said, I did not ask them about a taxable account, as I have already moved my taxable account from Vanguard to a USD account at Questrade. If you go this route, be sure to journal over any Vanguard mutual funds you might have to their ETF equivalents (a non-taxable event).

I've also found Fidelity to be somewhat helpful -- they'll let you keep existing retirement account, and even open new ones, IF you're already a customer with them. My wife is, so her stuff is there. TIAA has told me something similar. Interestingly, Interactive Brokers (which folks rave about being expat-friendly) would NOT let me keep an IRA with a Canadian mailing address.

I also spoke to a crossborder financial planner for his take on all this (during a free intro consult) and he said it was a bit like whack-a-mole because the rules keep changing, but that he had no doubt that someone would always fill the void of being listed on both sides of the border -- there's simply too much money at stake. He also suggested that, given the data exchange between the CRA and the IRS, he felt that it was only a matter of time before folks started getting dinged for having different addresses on their US accounts. I'm currently still doing a bit of this as I haven't been able to move a 403b (since I still technically work there). My goal is to have everything with a Canadian address on it next month.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by Marseille07 »

JohnFiscal wrote: Mon Jul 12, 2021 9:47 am update (July 13, 2021): My questions are still valid but this is a moot point regarding TD Ameritrade. I have seen some discussions here and at the Financial Wisdom Forum (Bogleheads North) that TD Ameritrade would "work" for my situation. However, I discussed with a representative on the phone today and was told that upon my indicating a Canadian address they would promptly shut down our accounts. So TDA is a dead duck I believe. (maybe I shouldn't rely on a phone call but go in there local office this week).
Then consider Interactive Brokers. I don't know about Canada specifically but they're generally considered expat friendly.
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Re: Likely expat, what to do with Vanguard? [update]

Post by LadyGeek »

This thread is now in the Non-US Investing forum which attracts members with non-US (and ex-pat) experience.

JohnFiscal - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into your original thread. I also retitled the thread for clarity. The OP can change the thread title further by editing the Subject: line in Post #1.
FLbiker wrote: Wed Jul 14, 2021 11:05 am I responded to your thread on FWF, but just to put it here as well -- I'm a US citizen and Canadian permanent resident, currently living in Canada.
FLbiker, Welcome!

Here's the FWF thread: Recommended US brokerage for IRAs for US citizen, permanent residents of Canada
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by FLbiker »

Marseille07 wrote: Wed Jul 14, 2021 11:55 am
JohnFiscal wrote: Mon Jul 12, 2021 9:47 am update (July 13, 2021): My questions are still valid but this is a moot point regarding TD Ameritrade. I have seen some discussions here and at the Financial Wisdom Forum (Bogleheads North) that TD Ameritrade would "work" for my situation. However, I discussed with a representative on the phone today and was told that upon my indicating a Canadian address they would promptly shut down our accounts. So TDA is a dead duck I believe. (maybe I shouldn't rely on a phone call but go in there local office this week).
Then consider Interactive Brokers. I don't know about Canada specifically but they're generally considered expat friendly.
Surprisingly, they aren't helpful in this case. Unlike several other brokers (Fidelity, TDA, TIAA) they would not let me keep even an IRA account once I moved to Canada. Originally, I thought I was going to move everything to IB but in this particular circumstance (US citizen in Canada) they aren't helpful.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by Marseille07 »

FLbiker wrote: Wed Jul 14, 2021 1:36 pm
Marseille07 wrote: Wed Jul 14, 2021 11:55 am
JohnFiscal wrote: Mon Jul 12, 2021 9:47 am update (July 13, 2021): My questions are still valid but this is a moot point regarding TD Ameritrade. I have seen some discussions here and at the Financial Wisdom Forum (Bogleheads North) that TD Ameritrade would "work" for my situation. However, I discussed with a representative on the phone today and was told that upon my indicating a Canadian address they would promptly shut down our accounts. So TDA is a dead duck I believe. (maybe I shouldn't rely on a phone call but go in there local office this week).
Then consider Interactive Brokers. I don't know about Canada specifically but they're generally considered expat friendly.
Surprisingly, they aren't helpful in this case. Unlike several other brokers (Fidelity, TDA, TIAA) they would not let me keep even an IRA account once I moved to Canada. Originally, I thought I was going to move everything to IB but in this particular circumstance (US citizen in Canada) they aren't helpful.
What about IBKR Canada? https://www.interactivebrokers.ca/en/index.php?f=45275

IBKR is excellent for expats because they have local subsidiaries, not just IBKR US.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

I received a written reply from Vanguard about disposition of accounts for non-US residents. Placed above in the first post for future reference for anyone else going down this path.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by JohnFiscal »

FLbiker wrote: Wed Jul 14, 2021 1:36 pm
Marseille07 wrote: Wed Jul 14, 2021 11:55 am
JohnFiscal wrote: Mon Jul 12, 2021 9:47 am update (July 13, 2021): My questions are still valid but this is a moot point regarding TD Ameritrade. I have seen some discussions here and at the Financial Wisdom Forum (Bogleheads North) that TD Ameritrade would "work" for my situation. However, I discussed with a representative on the phone today and was told that upon my indicating a Canadian address they would promptly shut down our accounts. So TDA is a dead duck I believe. (maybe I shouldn't rely on a phone call but go in there local office this week).
Then consider Interactive Brokers. I don't know about Canada specifically but they're generally considered expat friendly.
Surprisingly, they aren't helpful in this case. Unlike several other brokers (Fidelity, TDA, TIAA) they would not let me keep even an IRA account once I moved to Canada. Originally, I thought I was going to move everything to IB but in this particular circumstance (US citizen in Canada) they aren't helpful.
Ouch. I was thinking that IB was the solution. Painful to hear this. OTOH, Fidelity seems promising. I have an appointment tomorrow with their local office for information.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by Marseille07 »

JohnFiscal wrote: Wed Jul 14, 2021 3:46 pm Ouch. I was thinking that IB was the solution. Painful to hear this. OTOH, Fidelity seems promising. I have an appointment tomorrow with their local office for information.
What's wrong with IBKR Canada? They have a bunch of subsidiaries to serve local residents...
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by LadyGeek »

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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

LadyGeek wrote: Wed Jul 14, 2021 4:05 pm Please see this article: Why US Brokerage Accounts of American Expats are Being Closed
Great article! Thank you

I had run across Thun before. they have a lot of good info. I think I'll call them tomorrow as well.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

LadyGeek wrote: Wed Jul 14, 2021 4:05 pm Please see this article: Why US Brokerage Accounts of American Expats are Being Closed
Comments plz from anyone?

The well-written article also states:

"Finally, it should also be noted that in many cases the best solution for Americans abroad is simply to keep their address of record in the U.S. Any American living abroad, even for an extended period, is well within their rights to use a U.S. address for the sake of opening accounts and receiving mail. In this case, there will be no restrictions on the account."

So it is our 'right' to provide an address in the US that may not be our residence (for tax purposes)? I've read elsewhere (other cross-border financial/tax advisors) that doing so may not be a good ...or legitimate... thing to do.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by LadyGeek »

Caution, don't make any decisions until you've got qualified advice. Don't depend on information you've found on the internet, especially since this is your life's savings at risk. Do your own due diligence.

Contacting a firm which specializes in cross-border investing may be a smart move. Even if it's only to answer a few questions, you'll get the right answers that address your own situation.

About that article - Consider that it represents the position of Thun Financial. That's not Fidelity nor Vanguard.

Vanguard says:
Each of the investment products and services referred to on this website is intended to be made available to U.S. residents.
Fidelity says:
Our product and service offerings for customers and prospective customers who reside outside of the United States are limited.

...There are also additional restrictions that may apply, depending on the country where you now reside. Customers in certain countries may be limited to selling their existing holdings and withdrawing the proceeds from their accounts. They will not be able to make deposits in their accounts, or buy any additional securities.
^^^ Read the PDF file for the complete picture.

A US resident is different than supplying a mailing address.
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by FLbiker »

Marseille07 wrote: Wed Jul 14, 2021 3:55 pm
JohnFiscal wrote: Wed Jul 14, 2021 3:46 pm Ouch. I was thinking that IB was the solution. Painful to hear this. OTOH, Fidelity seems promising. I have an appointment tomorrow with their local office for information.
What's wrong with IBKR Canada? They have a bunch of subsidiaries to serve local residents...
In my experience, you can't do an IRA with IBKR Canada -- just an RRSP, TFSA, etc.
LadyGeek wrote: Wed Jul 14, 2021 7:08 pm Caution, don't make any decisions until you've got qualified advice. Don't depend on information you've found on the internet, especially since this is your life's savings at risk. Do your own due diligence.

Contacting a firm which specializes in cross-border investing may be a smart move. Even if it's only to answer a few questions, you'll get the right answers that address your own situation.

About that article - Consider that it represents the position of Thun Financial. That's not Fidelity nor Vanguard.
Agreed. I know another soon to be resident of Canada who is planning to work with Thun. Personally, I can't bring myself to pay a % of AUM, but I'm admittedly kind of extreme in this orientation. Working with Thun (or, more likely PWL Capital) is my plan C if I'm unable to find brokerages where I can keep my accounts. So far, though, I have been able to find several places that are welcoming to US Citizens who are Canadian residents, at least as far as retirement accounts go (TDA, Fidelity, TIAA). And Questrade has worked well for my non-retirement account.

I've also had initial consults with a couple of fee-only, advice-only planners that have been helpful in confirming my understanding of things. I've found two that I really liked (Spring Financial and Objective Planners), and my plan B is to engage them on an hourly basis whenever I get stuck or need a second opinion. Oh, and I do have a professional crossborder tax accountant to both do my taxes for the first couple of years (at least) and answer questions that I have on an hourly basis.

And I will caution that not all professional advice is good advice. Make sure that folks really have expertise in crossborder financial planning. I've had initial talks with a couple of wealth managers who didn't know what they were talking about, they just wanted to sell me mutual funds. Unfortunately, it seems like that type of "financial advice" is very common in Canada.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

to keep my findings all in one place: I ran across a thread I'd seen some months ago that seems to indicate that Interactive Brokers is also a "no go" for residents of Canada (US citizenship notwithstanding) who wish to hold US IRAs, can't believe I didn't remember this. viewtopic.php?t=343334&sid=b39e571af56e ... 976b54466a

thread directs to IB regarding IRAs https://www.interactivebrokers.com/en/index.php?f=14429
"*Residents of ... Canada, ... may not open Individual Retirement Accounts." (a number of other countries/regions are indicated as well)
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Re: moving from Vanguard to TD Ameritrade due to location [moving from US to Canada]

Post by JohnFiscal »

FLbiker wrote: Thu Jul 15, 2021 6:36 am I know another soon to be resident of Canada who is planning to work with Thun. Personally, I can't bring myself to pay a % of AUM, but I'm admittedly kind of extreme in this orientation.
Agree. I'm not enough of a fat cat myself to be fine with paying AUM fees just to hold a few generic index funds. :-|

I have an appointment today with local Fidelity office to discuss what they can offer.

Staying on with Vanguard and being restricted to withdrawals-only is not looking so bad anymore (consider that I'm 69 and will be on the the draw-down phase)
I've also had initial consults with a couple of fee-only, advice-only planners that have been helpful in confirming my understanding of things. I've found two that I really liked (Spring Financial and Objective Planners), and my plan B is to engage them on an hourly basis whenever I get stuck or need a second opinion. Oh, and I do have a professional crossborder tax accountant to both do my taxes for the first couple of years (at least) and answer questions that I have on an hourly basis.
I've definitely been looking at crossborder tax accountants.
Thanks for the mention of those two fee-only planners.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by Marseille07 »

JohnFiscal wrote: Thu Jul 15, 2021 7:13 am to keep my findings all in one place: I ran across a thread I'd seen some months ago that seems to indicate that Interactive Brokers is also a "no go" for residents of Canada (US citizenship notwithstanding) who wish to hold US IRAs, can't believe I didn't remember this. viewtopic.php?t=343334&sid=b39e571af56e ... 976b54466a

thread directs to IB regarding IRAs https://www.interactivebrokers.com/en/index.php?f=14429
"*Residents of ... Canada, ... may not open Individual Retirement Accounts." (a number of other countries/regions are indicated as well)
But you aren't a resident of Canada yet. What happens if you open one while you're in the US, move to Canada then update your address? That's what you need to find out.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

Marseille07 wrote: Thu Jul 15, 2021 11:49 am
JohnFiscal wrote: Thu Jul 15, 2021 7:13 am
IB regarding IRAs https://www.interactivebrokers.com/en/index.php?f=14429
"*Residents of ... Canada, ... may not open Individual Retirement Accounts." (a number of other countries/regions are indicated as well)
But you aren't a resident of Canada yet. What happens if you open one while you're in the US, move to Canada then update your address? That's what you need to find out.
well, good point.

I should call to inquire.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by FLbiker »

Marseille07 wrote: Thu Jul 15, 2021 11:49 am
JohnFiscal wrote: Thu Jul 15, 2021 7:13 am to keep my findings all in one place: I ran across a thread I'd seen some months ago that seems to indicate that Interactive Brokers is also a "no go" for residents of Canada (US citizenship notwithstanding) who wish to hold US IRAs, can't believe I didn't remember this. viewtopic.php?t=343334&sid=b39e571af56e ... 976b54466a

thread directs to IB regarding IRAs https://www.interactivebrokers.com/en/index.php?f=14429
"*Residents of ... Canada, ... may not open Individual Retirement Accounts." (a number of other countries/regions are indicated as well)
But you aren't a resident of Canada yet. What happens if you open one while you're in the US, move to Canada then update your address? That's what you need to find out.
Certainly you could call, but when I spoke to them ahead of my move, they were even stricter than Vanguard -- they wouldn't even let me keep the IRA and just do withdrawals, they would have forced me to liquidate it. I spoke to them in 2019, though, so things might have changed since then.
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Re: Likely expat, what to do with Vanguard?

Post by Marseille07 »

JohnFiscal wrote: Fri Jul 09, 2021 9:05 am EDIT: spun around on the phone with Schwab this morning, not impressed. But following the website:

this looks good https://international.schwab.com/expatriate-essentials#

then I select "open an account" https://international.schwab.com/open-account-intro

select "Canada" and get "Schwab currently cannot open accounts for residents of your country/region. Please check back with us in the future. "

This was also the case for every other country I tried so far (a handful, including France)

"bummer dude" :- (
But much like the Interactive Brokers situation, you aren't opening an account from Canada. What you need to find out is what happens when you have a Schwab account then move to Canada.

What did they say when you called Schwab?
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Re: Likely expat, what to do with Vanguard?

Post by JohnFiscal »

Marseille07 wrote: Fri Jul 16, 2021 10:22 am
But much like the Interactive Brokers situation, you aren't opening an account from Canada. What you need to find out is what happens when you have a Schwab account then move to Canada.

What did they say when you called Schwab?
I got nowhere with Schwab.

The website for their international operations (https://international.schwab.com/brokerage-account) kicks me out if I select I want to open an account from Canada, "Schwab currently cannot open accounts for residents of your country/region. Please check back with us in the future."

Then I called the US toll free line as wanting assistance for opening an account while residing in the US and then subsequently moving to Canada. This was a circular loop that I went around on up to a dozen times over several different calls. Following the phone tree I would want help to open the account, each time I would be sent to some individual. The people who answered seemed to be brokers or agents working at various retail Schwab sites around the US. I explained what I wanted, the first few times I explained about "international" and they would want me to buy some international stocks. What?!? I was highly unimpressed with Schwab's phone support. These brokers would say "oh, I'll transfer you" and then I'd just be dumped back at Station # 1. Multiple times. I was also told about "oh, I'll transfer you to the dedicated team for this...". LOL. There is no such team.

There's a Schwab retail shop only 12 minutes away. I may try to go in there for discussion. Although after the hopeful prospect of Fidelity I don't know that I will bother with Schwab.

Just got into online "Chat" with Schwab. "J" says

"Correct, you may be required to transfer to another firm that can hold the account.

For this, our International operations team would have more information on this. Their number is 415-667-7870 877-853-1802 (from within the U.S.) 9:00 am to 7:00 pm ET, Monday - Friday. They will be your best resource as they handle International accounts at Schwab"

In other words, once an existing account has a Canadian address it "may be required to transfer to another firm". Meaning, "bye-bye"

Further, he directed me to the "international team", which is who I attempted to speak with last week. And in any case "Schwab International" does not "do" Canada.
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Re: Likely expat, what to do with Vanguard?

Post by Marseille07 »

JohnFiscal wrote: Thu Jul 22, 2021 7:03 pm
Marseille07 wrote: Fri Jul 16, 2021 10:22 am
But much like the Interactive Brokers situation, you aren't opening an account from Canada. What you need to find out is what happens when you have a Schwab account then move to Canada.

What did they say when you called Schwab?
I got nowhere with Schwab.

The website for their international operations (https://international.schwab.com/brokerage-account) kicks me out if I select I want to open an account from Canada, "Schwab currently cannot open accounts for residents of your country/region. Please check back with us in the future."

Then I called the US toll free line as wanting assistance for opening an account while residing in the US and then subsequently moving to Canada. This was a circular loop that I went around on up to a dozen times over several different calls. Following the phone tree I would want help to open the account, each time I would be sent to some individual. The people who answered seemed to be brokers or agents working at various retail Schwab sites around the US. I explained what I wanted, the first few times I explained about "international" and they would want me to buy some international stocks. What?!? I was highly unimpressed with Schwab's phone support. These brokers would say "oh, I'll transfer you" and then I'd just be dumped back at Station # 1. Multiple times. I was also told about "oh, I'll transfer you to the dedicated team for this...". LOL. There is no such team.

There's a Schwab retail shop only 12 minutes away. I may try to go in there for discussion. Although after the hopeful prospect of Fidelity I don't know that I will bother with Schwab.

Just got into online "Chat" with Schwab. "J" says

"Correct, you may be required to transfer to another firm that can hold the account.

For this, our International operations team would have more information on this. Their number is 415-667-7870 877-853-1802 (from within the U.S.) 9:00 am to 7:00 pm ET, Monday - Friday. They will be your best resource as they handle International accounts at Schwab"

In other words, once an existing account has a Canadian address it "may be required to transfer to another firm". Meaning, "bye-bye"

Further, he directed me to the "international team", which is who I attempted to speak with last week. And in any case "Schwab International" does not "do" Canada.
That's extremely disappointing. I thought Schwab is supposed to be expat friendly...hopefully Fidelity works out for you.
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Re: Likely expat, what to do with Vanguard? [update] [Moving from US to Canada]

Post by JohnFiscal »

I got some promising info from Fidelity phone support. Then I met in-person with their local office. The rep was able to access their secret internal website for applicable documents (the link further back is to an old document, now outdated) as well as calling their internal support experts on this.

Fidelity has confirmed:
  • I can open an account (IRA only) and maintain it upon moving to Canada. IRA only, not a taxable account,
  • I would have full control over the retirement account, meaning rebalancing, etc.
  • there's no time limit on this (currently). I spoke to a local financial company who indicated they could do this but only for a 5 year period. This doesn't seem to be a period of time specified by either US or Canada regulators
  • Just now I was reviewing the fine print documents that come with opening a new account (online). "Canada" is mentioned 5 times but only 3 of those are of relevance. I'll have to review these closely but they don't seem to change what I was told.
(i) I will probably open IRA accounts at Fidelity and fund with direct transfers from our Vanguard accounts.

(ii) and I'll probably maintain maybe one-half of the IRA funds at Vanguard for now (maybe even more), since I should be able to move these later once in Canada. The IRA agreement states

"Retirement Account Funding for Canadian Residents
"If you have provided Fidelity with an address and/or tax information that
indicates that you are a resident of Canada, you warrant and represent
to Fidelity that any cash or assets used to fund this account constitute
proceeds from an existing IRA or retirement plan account previously
established in the United States for your benefit."
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