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How to Transfer a Closed Fidelity Account to an Expat Brokerage

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How to Transfer a Closed Fidelity Account to Another Broker

Fidelity, Merrill Lynch, Wells Fargo and many other U.S. brokers have been closing down their American clients' brokerage accounts due to FACTA (the Foreign Account Tax Compliance Act) which are rules laid down in 2010 that not even the U.S. government adheres to as they haven't signed up to the Common Reporting Standards yet (2018).

The Wall Street Journal reported in July 2014 that "FATCA worsens the already profoundly unjust tax treatment of millions of middle-class Americans living abroad...FATCA rules were intended to correct a tax loophole. Applied to Americans living abroad, they are absurd."

The Guardian reports that Americans living abroad feel financially terrorized by FATCA requirements. In 2013, Robert Stack stated the IRS position that "FATCA withholding applies to the U.S. investments of FFIs whether or not they have U.S. account holders, so turning away known U.S. account holders will not enable an FFI to avoid FATCA.

Marketwatch reported in 2014 that Fidelity had banned US investors from purchasing U.S. mutual funds. 

Fidelity have closed a number of accounts due to FACTA, the stricter Know Your Client (KYC) rules and tougher anti-money laundering rules as well as the problem of not being able to process the purchase and sale of U.S. mutual funds for Americans living abroad.

Many of Fidelity's client accounts have been closed in the wake of money laundering scandals facing Bank of America and the tax disclosure issues in Switzeland, where UBS, Switzerland’s biggest bank and the world’s largest wealth manager, has maintained a large U.S. presence even after paying $780 million in settlements with U.S. authorities over undeclared assets that U.S. clients had held with the bank.

If you have a locked Fidelity account, you might find all this very frustrating, but don't worry, there is a solution.

In this article, we will show you how to close a Fidelity account and transfer the account to an expat friendly brokerage account via a free app which will also automate the trading of ETFs on a clients' behalf.

How to Close a Fidelity Account

If you want to close your Fidelity account, you need to send a closure request to the broker by logging into the Fidelity site and using their internal messaging system or you can ring them internationally and ask a broker to close down your Fidelity brokerage account.

Here is a list of Fidelity's international phone numbers.

Wait for confirmation from Fidelity regarding your account closure. Some accounts charge a fee when they are terminated and a statement is sent specifying this charge. Fidelity must also send you a payment for any funds remaining in your account.

How to Transfer a Fidelity Account

Instead of closing a Fidelity securities account, you could transfer it instead. Most broker-dealers charge a fee for an outgoing transfer, although Fidelity charges nothing. It's one of the few companies to do so. 

Fidelity does impose a $50 charge for closing or transferring an Individual Retirement Account, although regular securities accounts you can transfer for free.

To start the transfer process, you would contact the broker you want to transfer to. Many firms have an on-line form to conduct the movement of assets. You can Interactive Brokers or Charles Schwab directly if you want to open or transfer a brokerage account as an American expat.

Some brokers may allow you to transfer your assets. But, most brokers are not expat friendly, especially not toward Americans living overseas due to FACTA.

Click here for a list of expat friendly brokers.

If you have closed your Fidelity account or exited your positions, you can transfer the cash to an online brokerage account such as Interactive Brokers or Charles Schwa.

IB is an expat friendly brokerage account that can manage your ETF portfolio.

Setting Up a New Brokerage Account for Non-US Expats

The Money Pouch can manage ETF investment portfolios for most expats.

The Money Pouch app is available on Google Play and iTunes. You can download it for free.

The Money Pouch is not available to U.S. residents.

After answering a few simple risk tolerance questions, The Money Pouch will send you a free risk score via email. From there, you can complete the application and upload your passport copy and proof of address for compliance.

The whole process takes less than 10 minutes as you can see in the video below. Then, it may take a few days to clear compliance at Interactive Brokers.


How to Invest in China ETFs & China Robo Advisers

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Investing in China ETFs & China Roboadvisers

In this article, we will look into the rise of China ETFs & China robo advisers for automated trading of clients' investment portfolios.

We will look into how to invest in China ETFs & how to invest in China robo advisers..

We will look at China roboadvisors for investing both in the local currency in RMB and offshore investment options in foreign currencies in USD/GBP/EUR.

Exchange Traded Funds are basically index trackers. There are many China ETF index trackers that now follow a basket of securities in China. These China ETFs come in leveraged versions, up to 3x China ETFs and unleveraged versions which closely track one of the many China indexes.

China ETF List 2019

Top Ten China ETFs by AUM 

Here are the top 10 China ETFs by size in USD - assets under management. All these ETFs are listed on the NYSE in the U.S.A.

Symbol ETF Name

  1. FXI    iShares China Large-Cap ETF     
  2. MCHI    iShares MSCI China ETF     
  3. KWEB    KraneShares CSI China Internet ETF     
  4. ASHR    Xtrackers Harvest CSI 300 China A-Shares Fund     
  5. GXC    SPDR S&P China ETF      
  6. CQQQ    Invesco China Technology ETF          
  7. YINN    Direxion Daily China 3x Bull Shares         
  8. KBA    KraneShares Bosera MSCI China A Share ETF     
  9. PGJ    Invesco Golden Dragon China ETF      
  10. CHIQ    Global X MSCI China Consumer Discretionary ETF

FXI, the largest China ETF, now has over $6.4 billion under management. CHIQ, at the bottom of the list has only $140m under management

iShares China ETF, Vanguard China ETF, Fidelty ETF, Wisdom Tree China ETF, Powershares China ETF, Claymore China ETF, Invesco China ETF, Kraneshares China ETF, Direxion ETF, Invesco China ETF, Global X China ETF, X-Trackers China ETF, ProShares ETF - the list of China index ETFs is exhausitive. You can see a list of the top 52 China ETFs here.

China ETF 3x List

Here is a list of leveraged China ETFs in USD. This includes China 3x ETFs and China 2x ETFs. The "Bull" China ETFs invest in a rising equity environment, whilst the "Bear" China ETFs or "Short "China ETFs are betting that China equities will fall. Normally, these leveraged ETFs are only used in day trading due to the volatility and also the "decay" from holding them for long periods of time.

  • Direxion Daily China Bull 3x Shares (YINN B) ...  Leverage 3x
  • Direxion Daily China Bear 3x Shares (YANG A-) ... Leverage 3x
  • Daily CSI 300 China A Share Bull 2x Shares (CHAU B) ... Leverage 2x
  • ProShares Ultra FTSE China 25 (XPP C) ... Leverage 2x
  • ProShares UltraShort FTSE China 25 (FXP B) ... Leverage 2x

China ETFs in RMB on the Shanghai Stock Exchange

You can see a list of China ETFs on the SSE here.

They are managed by Bosera Asset Management Co, China Asset Management Co., ICBC Credit Suisse Asset Management Co.,Ltd., HFT Investment Management Co., Ltd., Hua An Fund Management Co., Ltd. and many others. It is more difficult to find perfomance and data in English on these products, returns & fees.

List of China Roboadvisors

Here is a list of roboadvisers based in China in Yuan / Reminimbi (RMB) and overseas roboadvisers based in USD/EUR/GBP.

China Roboadvisers in RMB

These are local Chinese-based robo advisers who want to invest in stocks or ETFs in Remnimbi / Yuan.

China robo advisory options:

  • ICBC - Minimum investment: 10,000 Yuan
  • Shanghai Pudong Development - Minimum investment: 1,000 yuan
  • Industrial Bank - Minimum investment: 5,000 Yuan 
  • Ping An Bank - Minimum investment: 5,000 yuan
  • China Merchants - Minimum investment: 20,000 yuan.

China Roboadvisers in USD

These roboadvisers mainly focuses on Chinese with overseas bank accounts and expats living in China with USD/EUR/GBP offshore bank accounts who need a managed brokerage account service. These roboadvisers automatically invest in ETFs in USD, EUR or GBP on a client's behalf.

  • The Money Pouch - Minimum investment 10,000 USD/EUR/GBP

The Money Pouch automatically invests clients money via Interactive Brokers with cash deposits protected by both the Securities Investor Protection Corporation (“SIPC”) in the USA and Lloyd's of London insurance for a maximim of $900,000 in cash and $30 million for securities, subject to an aggregate limit of $150 million. You can read more about security here.

A Robo Adviser that Invest in China ETFs

If you are looking for a robo advisor in China that invests in the Chinese stock market in RMB, ICBC is one of the big four banks in China.

If you are looking for an offshore robo advisory service that invests in Chinese ETFs, but hedges it with investments in US equities, US treasuries, gold ETFs and cash for safety, then you can download the free Money Pouch app on iTunes or Google Play.

The Money Pouch invests in Chinese ETFs in its "adventurous strategy" for higher risk investors, but still uses asset diversification, momentum strategies and hedging to reduce risk.

What is a China Robo Advisor?


How to Transfer a Closed Merrill Lynch Account to an Expat Brokerage

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How to Transfer a Merrill Edge Brokerage Account to an Expat Friendly Broker

Merrill Lynch, Merrill Edge and many other U.S. brokerages have been closing down clients' expat brokerage accounts due to FACTA (the Foreign Account Tax Compliance Act) which are new, more stringent rules which are concerning many U.S. based financial institutions when dealing with Americans living abroad. 

Merrill Lynch have closed a number of accounts due to FACTA, the stricter Know Your Client (KYC) rules and tougher anti-money laundering rules. It has even ended with some clients trying to sue Merill Lynch. Many of these client accounts have been closed in the wake of money laundering fines paid by HSBC and other high profile banks.

Anyone who has had a Merill Lynch account locked might find all this very frustrating, but don't worry, there is a solution.

In this article, we will show you how to close a Merril Lynch or Merrill Edge account and transfer the account to an expat friendly brokerage account via a free app which will also automate the trading of ETFs on a clients' behalf.

How to Close a Merrill Edge Account

If you want to close your Merrill Edge / Merrill Lynch account, you need to send a closure request to the broker by logging into the Merrill Edge site and using their internal messaging system.

You could also call the broker on +1-609-818-8900 if you are outside the USA.

Unlike Fidelity, Merrill Lynch doesn’t provide an on-line chat service, nor does it operate a nationwide network of branch locations. Merrill Lynch can be contacted through its mobile app. 

Merrill Edge Account Closure Fee (non-IRA)

Merrill Edge does not charge fees for account termination for individual or joint taxable (non-IRA) brokerage accounts. 

Merrill Edge IRA Account Closure Fee

Merrill Edge non-taxable accounts (also known as IRA accounts) have a $49.95 charge to close an account. Cash distributions from an IRA that are sent to you, rather than to another firm, will be fully taxable. You'll also typically owe a 10 percent penalty if you're under age 59 1/2.

How to Transfer Your Merrill Edge Assets to Another Account

Some brokers may allow you to transfer your assets. But, most brokers are not expat friendly. If you have closed your Merrill Lynch / Merrill Edge account, you can transfer the cash to an Interactive Brokers or Charles Schwab account.

Setting Up a New Brokerage Account for Non-US Expats

The Money Pouch can manage ETF investment portfolios for most expats, but is not available to U.S. residents.

The Money Pouch app is available on Google Play and iTunes. You can download it for free.

After answering a free risk tolerance questions, The Money Pouch will send you a free risk score via email. From here, you can complete the questionnaire and upload your passport copy and proof of address for compliance.

The whole process takes less than 10 minutes as you can see in the video below. Then, it may take a few days to clear compliance, Know Your Customer and pass the Anti-Money Laundering check.



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