Bringing Cross-Border Planning Expertise to the Advisory Profession

Somewhere in your client base is at least one of the 41.3 million foreign-born Americans currently living in the U.S. One or more of your clients has or will become one of the nine million Americans who have decided to take an overseas work assignment. Untold others have investment interests abroad, foreign spouses, or have worked abroad and collected pension assets, bought a house overseas, or put money in local investments.

Millions of people – many of whom are excellent financial planning prospects – may not realize that they have to deal with cross-border planning complications which, if handled clumsily or not at all, will significantly reduce their wealth.

How are advisors helping their clients navigate these very complicated and potentially costly issues? Ashley Murphy, a cross-border planner who has citizenship in the U.K., the U.S. and Australia, has hosted the FPA knowledge circle on this topic for a number of years. He describes many advisors who came through the discussion boards as “dabblers” in the topic.

“Over and over again, somebody would come on and ask very general questions,” he says. “They’d have an attractive new client who had some sort of cross-border complication to deal with, and they would jump on the message board and say, hey, could someone teach me about passive foreign investment corporations, or Canadian registered retirement savings plans [RRSPs] – or some other situation?

And…? “The people who knew the answers, who do cross-border planning on a regular basis, have no incentive to answer these questions,” says Murphy. He adds that the “dabblers” may represent a more astute category of advisors in this space; they have least become aware that there is an issue. Others he has talked with might not realize that a client worked abroad for nine years or that the spouse is an Italian citizen, or, if they do, they never think to delve into the tax, retirement or estate planning implications of those not-unusual circumstances.