Client's Fidelity Account Restricted Abroad? An Advisor's Playbook

US custodians restrict accounts based on the client's address of record, not their citizenship. A client who moves abroad usually learns about it from a letter, and the next call is to you. Fidelity is the most searched example, but the pattern repeats across US brokerages. Your clients are reading about it already: our guide to Fidelity account restrictions for US expats is one of the most visited pages on this site.

For an advisor, a restriction letter is a retention moment. Handled early, the client consolidates with you and trusts you with the next move. Handled late, assets sit frozen, get sold at a bad time, or follow the client to whoever answered first.

Short on time? Run the client through our free Expat Client Exposure Check. Six questions, and you see which custodian restrictions and filings apply before you call them back.

1. Get the letter and the deadline. Ask the client to forward the custodian notice and note any date by which assets must be transferred or sold.
2. Inventory every account type. Taxable brokerage, IRA, workplace 401(k), 529, HSA and crypto accounts are often treated differently by the same custodian.
3. Mark what can move in kind. An in kind transfer avoids a forced sale, but not every receiving custodian accepts every holding, US mutual funds in particular.
4. Check the tax picture in both countries before anything is sold. A gain realized in the US account can also be taxable where the client now lives, under different rules and on a different calendar.
5. Confirm the residency date and address history. They drive both the custodian's rules and the client's filing obligations for the year of the move.

The usual options are a US custodian that serves nonresident clients through an advisor relationship, a custodian in the client's new country, or a cross border specialist. Whichever you consider, ask the receiving custodian:

• Do you accept residents of the client's new country, and for which account types?
• Which current holdings can transfer in kind?
• Can the client keep buying US domiciled funds from abroad? In the EU and UK, PRIIPs rules often prevent retail investors from buying them.
• What happens if the client moves again, or returns to the US?

For the custodian by custodian picture, see why US brokerage accounts get restricted when clients move abroad.

Moving assets out of a US account creates reporting obligations, and the client will expect you to have thought about them. Check at least:

• FBAR (FinCEN 114) if the client's foreign accounts together exceed $10,000 at any point in the year.
• Form 8938 if foreign financial assets pass the higher thresholds that apply to filers living abroad. Our FBAR vs Form 8938 guide has the current figures.
• PFIC exposure if the client reinvests in non US funds. Most foreign mutual funds and ETFs are PFICs for a US person and are reported on Form 8621. See what is a PFIC.
• Reporting in the new country, such as Spain's Modelo 720 for assets held outside Spain.

Send this the day the client tells you about the restriction. It sets expectations, slows down panic selling, and keeps the conversation with you. Replace the bracketed parts.

Hi [Client name], thank you for sending the letter from [Custodian]. Restrictions like this are common when US clients move abroad and they are manageable. Please do not sell or move anything yet. Over the next week we will list every account and holding, confirm which ones can transfer without being sold, check the tax effect in both the US and [Country] before any sale, and recommend where the assets should live going forward. The notice gives us until [Date], which is enough time to do this properly. I will send a short plan by [Date]. In the meantime, could you forward your latest statements and confirm the date you became resident in [Country]? Best, [Your name]

The slowest part of this playbook is step two: getting a complete picture of accounts spread across custodians and countries. Aequify for advisors connects a client's accounts across 30+ countries once, flags FBAR, Form 8938 and PFIC exposure as assets move, and gives your team a single report to work from before the call. Request a sample client report below to see what that looks like.

This article provides general information for advisors and is not tax, legal or investment advice. Custodian policies vary by country, account type and individual circumstances and change over time. Confirm current rules with the custodian before acting.