cross-border investment companies?

[keyofdminor]

I am a Canadian living in the US (TN Visa) with an IRA account and a 401k account.

I posted before about how to move these assets if I move back to Canada. e.g. moving to an RRSP

I appreciate the responses but some new information: my current mutual fund company (a large, well-known firm) requires US residence. I can keep the account 'open' but cannot contribute or even make exchanges once I move.

Q: Is there another firm in the US that does not have that requirement?

My main goal here is to buy some time before making hard decisions. I'm not trying to find any loopholes or such.

thanks
Mike

ps. Cross-border life is a nightmare.

[nelsona]

The problem is mutual funds. US mutual funds can only be sold to US residents, Cdn mutual funds can only be sold to Cdn residents.

There is some leeway for retirement accounts being held by non-residents, bu the products they buy can only be those available to residents. There are some discount brokers that will deal with you cross border, but you would be buying stocks and ETFs not mutual funds.

That is why most Cdns moving down to US must move their RRSP holdings to a broker rather than a mutual fund company, and why they must close their Cdn non-RRSP accounts and transfer the holdings to US (the ones that can be moved).

There are a couple of firms that can handle cross-border clients (Blackmont, Pacfica, and Seabank capital). They typically are for high-rollers, so if your combined portfolio is less that $500K the fees may not be worth it.

Don't bother with trying to move funds to an RRSP. Either roll them to a Roth, or leave thenm alone until you retire -- once you've found a dealer that will keep you.

[keyofdminor]

Ah, ok... I think I am starting to see the picture now.

My terms may be a bit off, but in case this helps anyone....

As nelsona points out, there are niche investment firms which provide cross-border investment offerings. They use a "custodian" account / institution and let you have funds on either side.

The fees are steep, but they are offering managed assets with the unique cross-border edge.

I've also learned that they may not actually give you accounting advice. That is a separate matter, though they can refer you.

It is hard to research this kind of thing as a "good deal". For example, for an American in the US, there are a zillion resources to compare fund companies against each other. In this specialty, that seems to be more difficult, as is natural for a niche play. The "deal" might be that you can get this service at all (e.g. perhaps better for larger accounts).

If any of this is egregiously wrong, please let me know

[keyofdminor]

[quote="nelsona"]There are a couple of firms that can handle cross-border clients (Blackmont, Pacfica, and Seabank capital). They typically are for high-rollers, so if your combined portfolio is less that $500K the fees may not be worth it.
[/quote]

From what I can tell, a typical fee for a discretionary, managed fund is X % of total holdings. That is sobering, and I can see why it would be for "high rollers" (i.e. a concierge service). I'm not sure why, though, that $500 K or more would impact if it was worth it or not? just curious....

thanks, nelsona, for all your help on these boards

[keyofdminor]

ps. To be fair, re: fees, X is quite small (eg 1.5 %). It is a significant amount but I don't want to scare anyone that it is outlandish

[nelsona]

I'm sure it would be 1.5% of a large portfolio.

[ExpatAmerican]

I think that the reason that fees are higher for such cross-border business is that the associated licensing fees/Compliance departments are required in both countries, hence almost doubling costs. Such service providers have to be licensed in both Canadian (provincial, actually) jurisdictions and US (NASD and individual states, actually) jurisdictions. Combine that with a fairly limited investor profile pool (US resident moving to Canada or vice versa), and you have a scenario where higher fees are bound to prevail. Now, with that said, I would tell you that you can achieve quality cross-border money management services at below 2% per annum for much less than $500k minimum mentioned here. Darrell Thompson at Macquarie Private Wealth Corp. (they recently purchased Blackmont) in Toronto, Canada, can help, toll-free at 866-775-7704.

[RealProf]

Pacifica Partners doesn't require nor advocate shifting assets across borders in most situations. Instead they manage Canadian domiciled assets in Canada and US domicile assets in the US. They will look at your potential tax liabilities and ongoing tax reporting burdens before deciding an appropriate strategy for any client. As for minimums, it is usually 100k, however, they will help people with less who are in a jam.

Paul Bains heads up their cross border practice, 1877.576.8908, paul@pacificapartners.com

[RealProf]

Pacifica Partners doesn't require nor advocate shifting assets across borders in most situations. Instead they manage Canadian domiciled assets in Canada and US domicile assets in the US. They will look at your potential tax liabilities and ongoing tax reporting burdens before deciding an appropriate strategy for any client. As for minimums, it is usually 100k, however, they will help people with less who are in a jam.

Paul Bains heads up their cross border practice, 1877.576.8908, paul@pacificapartners.com