Note: This news is breaking and updated as of 11/2/2019. We will continue to update this post as facts become more clear. Every effort has been made to verify the accuracy of our statements in regards to Schwab’s position on their accounts.

According to a variety of sources and emails from Schwab, it seems like Brexit has started affecting financial services in a variety of ways. Charles Schwab U.K. just sent a letter to clients in Italy and France that they will no longer be servicing their accounts. According to Schwab, they are changing their business model and “will no longer do business in your country. This change is mostly due to the U.K.’s decision to leave the E.U.”  

Accordingly, Schwab is encouraging clients to move their assets out of Charles Schwab U.K. by December 31st and will wave any transfer or wire fees before year-end. After January 1st, no new purchases will be able to be made by Schwab clients in these countries. And while clients will still be able to maintain accounts with Schwab but will only be able to perform closing activities (selling assets, etc.). This decision comes on the heels of Schwab’s decision to (belatedly, in our opinion) join all other brokerages worldwide in restricting the sales of ETFs to European clients. Whether this also affects clients who have accounts managed through U.S. investment advisors remains to be seen, but the bottom line is that clients in France and Italy have found themselves with fewer and fewer options.

Generally, the best brokerage option for investors in our opinion (as we discuss in our “Best Brokerages for Expats” blog), is Interactive Brokers. Interactive Brokers have been preparing for Brexit and do not anticipate their clientele will be affected as their business has already adapted. Ultimately, this continues to support our contention that the best brokerage for expats is Interactive Brokers – as it supports multiple currencies and exchanges and is registered globally, meaning that clients can likely continue to do business with them without issue.

This issue is still ongoing and we will update clients and the public as we learn more. For investors that would like to discuss their specific situation, we welcome you to schedule an initial no-cost, no-obligation consultation with our Director of International Advisory services, Keith Poniewaz. Keith works with U.S. expats on financial planning and wealth management. You may also email Keith as well.