Scottrade to Expats: Take Your IRA with You

Scottrade has joined a growing number of IRA custodians who are either unable or unwilling to do business with expats, at least to a degree. analyst Roger Bell believes the reasoning behind the phase-out of American clients who live overseas is two-fold.

“Know your customer laws have become more strict in recent years, and some custodians may have a hard time verifying who someone is if they do not have a valid U.S. mailing address,” said Bell. “Most custodians are willing to work with expats because there is always a way to verify someone’s identity in this day and age, but Scottrade, as well as other custodians, are either telling expats to find another place for their retirement accounts or not allowing expats to open new accounts or transfer existing accounts to Scottrade unless it meets a hefty threshold.”

A survey of nine firms who are actively eliminating expats as IRA clients found that the average balance required for an expat IRA is $500,000 or an equivalent amount in assets. “Custodians can earn interest on large IRAs so eliminating smaller expat IRAs allows brokers to focus on the larger accounts,” Bell stated. “Additionally, expats tend to trade less often than clients living on U.S. soil and the custodians want to maximize transactions to create service fees.”

Bell believes that while other custodians may follow suit there are still reliable IRA custodians for expats. “ works with Equity Institutional and GoldStar Trust and both of those custodians have voiced their support of expats and are willing to service those accounts.” To learn more about IRA custodians that work with expat retirement accounts call 1-800-394-3337 today, and don’t forget to pick up your complimentary digital copy of our award-winning retirement account guide at the bottom of this page.

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