Finding a Financial Advisor as an American Expat Overseas

Living abroad introduces new layers of complexity to personal finance, especially when managing investments, taxes and retirement across borders. An expat financial advisor can help address issues that are unique to Americans living overseas, such as FATCA compliance, foreign income reporting and where to bank. An advisor may also offer insight into cross-border estate planning or portfolio diversification tailored to an international lifestyle.

Financial advisors can do more than offer investment advice. Some advisors have special areas of expertise, including financial planning, retirement strategy and business planning. Connect with an advisor today.

Finding a Financial Advisor as an American Expat Overseas

Expats looking for a financial advisor can struggle due to their unique circumstances. Here’s how to find a professional equipped to address your needs and optimize your finances.

Determine Your Needs

Start by assessing your financial needs and goals. Once you’ve done that, clearly communicating them will help you find an advisor with the right expertise. Then, identifying and communicating your needs to a financial advisor will help you find one with the necessary expertise. Then, identifying and communicating your needs to a financial advisor will help you find one with the necessary expertise. For example, expats often have tricky tax situations that require help. For example, the Foreign Earned Income Exclusion is an essential benefit for many expats, but taking advantage of it can be complicated. In addition, Americans generally need retirement planning and investment services regardless of where they live.

Research Your Options

It’s best to shop around when selecting your financial advisor. Friends and family who have gone the expat route can provide recommendations. In addition, online platforms can connect you to the right advisor. For example, you can peruse NAPFA (The National Association of Personal Financial Advisors) to find an advisor who specializes in expat services.

Likewise, you can reach out to international financial advising firms with a presence in both your host country and your home country. These firms often have experience in cross-border financial planning and can provide tailored advice for expatriates.

Choose a Fiduciary

Selecting a fiduciary financial advisor matters because fiduciaries must act in your best interest. Remember, not all financial advisors are fiduciaries, so it’s essential to separate the wheat from the chaff in this regard. Otherwise, your financial advisor may conduct trades because of generous commissions instead of suitability for your portfolio. Here’s how to ensure your chosen advisor is a fiduciary:

Ask directly: When interviewing potential advisors, ask them directly if they operate as fiduciaries. They should be transparent about their commitment to putting your interests first.
Check credentials: Look for advisors with recognized certifications like Certified Financial Planner (CFP), Chartered Financial Analyst (CFA) or Chartered Financial Consultant (ChFC). These designations require adherence to fiduciary standards.
Read agreements carefully: Review the advisory agreement or contract provided by the advisor. Ensure it explicitly states their fiduciary duty to you.

Understand the Fees

Different advisors charge fees in various ways. Make sure you fully understand the fee structure before committing to an advisor:

Commission-based vs. fee-only: Some advisors earn commissions from selling financial products, which can lead to potential conflicts of interest. On the other hand, advisors may charge an hourly or fixed fee. For example, you might pay a few hundred dollars per hour or several thousand as a one-time charge. Lastly, some advisors charge a percentage of assets under management. The average rate across the industry is about 1% of assets managed.
Fee transparency: Ask for a breakdown of all fees. This should include management costs, trading expenses, administrative fees and any extra charges for expat-specific services.
Comparative analysis: Don’t hesitate to request fee information from multiple advisors. Comparing prices will help make an informed decision.

Questions to Ask a Financial Advisor

An expat working overseas from a coffee shop looking for a financial advisor

Once you pick a financial advisor, you can get down to brass tacks about your situation. The following questions will provide crucial information and actionable steps to organize your finances:

What Country Should I Bank In?

While mobile banking makes your account accessible around the world, banking policies, international regulations and exchange rates influence how banks serve expats. For instance, the HSBC Global Money Account allows expats in the UK to bank with no monthly or foreign currency transaction fees, making it a solid long-term choice. However, it’s critical to remember that American citizens with over $10,000 in foreign bank accounts must report these assets when filing taxes.

On the other hand, keeping your U.S. bank account may be viable if you aren’t planning on moving permanently. If you’ll be an expat for just a few years, you can ask your financial advisor about U.S. banks that provide advantages for overseas members.

Should I Move My Investments?

While switching to a local bank account can benefit expats, it’s typically best to keep your investments in the U.S. because of its investing environment. For example, the Morningstar Global Investor Experience report for 2022 gives investing services in the United States top marks in numerous categories, such as regulation, customer experience, fees, sales and disclosures. That being said, check with your financial advisor about how the country you’re living in handles investments to maximize your returns and avoid penalties.

Should I Change My 401(k) or IRA?

When moving abroad, you might be unsure about what to do with retirement accounts like a 401(k) or IRA (Individual Retirement Account). A qualified advisor will help you decide whether to keep your accounts in the U.S., roll them into a local plan or pursue another strategy. Remember, withdrawing money early from your retirement plan can result in heavy fees and taxes, so it’s best to do your homework and create a plan before receiving distributions.

What Do I Need to Know About Filing Taxes?

Taxation is a critical consideration for expats. Inquiring about the best way to file taxes is essential to ensure compliance with tax regulations in the U.S. and your host country.

Expat financial advisors may have special expertise in the Foreign Account Tax Compliance Act (FATCA), which requires Americans living abroad to report foreign financial assets to the IRS. They can help expats understand which accounts must be disclosed, how to file the appropriate forms like the FBAR or Form 8938 and what thresholds apply based on residency and filing status.

Advisors may also work with tax professionals to help avoid double taxation or penalties tied to incomplete reporting. Their role often includes helping clients structure accounts and investments in ways that remain compliant without creating unnecessary complexity.

Should You Invest in a Financial Advisor as an Expat?

Investing in a financial advisor as an expatriate can be an intelligent decision that offers several potential benefits, but it ultimately depends on your individual circumstances and financial goals. Living abroad introduces unique financial challenges. Professional guidance can help simplify unfamiliar systems.

Furthermore, a financial advisor can provide peace of mind. Living abroad brings challenges, and a professional who understands your situation can reduce the stress of managing unfamiliar financial systems. A well-structured financial plan can help you maintain financial stability and adapt to changing circumstances more effectively.

An expat-focused advisor can offer guidance across taxes, investment decisions, and cross-border planning.

Resources for Americans Abroad

The following resources offer detailed information on effectively managing finances, making prudent investments, planning for retirement and minimizing risks for expatriates.

American Citizens Abroad (ACA): ACA has organized an array of resources tailored for American expatriates. From taxation to healthcare to opening a bank account, this database covers a spectrum of topics to address expats’ diverse concerns.
American Citizens Abroad’s Estate Planning for U.S. Citizens Living Overseas: This section of the ACA’s website delves into estate planning considerations for U.S. citizens residing abroad. For example, ensuring your will is valid internationally is essential.
Internal Revenue Service (IRS): The IRS website offers a wealth of information for expats who need clarity on tax obligations, timing and procedures.
InterNations’ Expat Insider: The 2 024 Expat Insider by InterNations provides an in-depth exploration of global expatriates’ financial management approaches. This comprehensive report extends insights into optimal countries for relocation, taking financial aspects into account.
InterNations’ Financial Checklist for Expatriates: If you want to become an expat or hone your financial organization skills as a new expat, this checklist will help. Use this checklist to set goals and envision a future as a financially stable expat living in the country of your choice.

Bottom Line

An expat living in Europe who needs a financial advisor.

Finding a financial advisor as an American expat overseas helps you overcome the unique challenges and embrace the opportunities that expatriate life presents. The journey begins by identifying your financial needs and goals, ensuring that the chosen advisor aligns with your requirements. Thorough research into available options allows you to make an informed decision.

Financial Planning Tips

If organizing your finances for an overseas move is making your head spin, a financial advisor can help. Whether you need advice on rolling your 401(k) into a foreign investment account or want to know the bank with the best exchange rates, a financial advisor’s knowledge can streamline the process of becoming an expat. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Once you sign an agreement with a financial advisor, you’re committing to pay for their services. So, it’s essential to understand how your financial advisor gets paid, whether through investing commissions or hourly out-of-pocket fees. Here’s how to know if you should try a fee-based advisor or pay an advisor 1% of your manageable assets.