US brokerage account closures have become one of the least-visible costs of American emigration. Major firms have restricted or terminated accounts held by clients with foreign addresses, citing the cost of complying with overlapping regulatory regimes for small numbers of non-resident clients.

The list of institutions that have pulled back from servicing Americans abroad includes:

• Wells Fargo: stopped opening new brokerage, Wells Fargo Private Bank or Abbot Downing accounts for non-US residents on Jan. 19, 2021, and began a nine-month exit from existing international accounts
• Morgan Stanley, Merrill Lynch, UBS: restricted business with American clients abroad, Creative Planning International says
• Fidelity, Charles Schwab: tightened non-resident policies in stages
• Ameriprise, TIAA, Edward Jones, USAA: restrict or refuse accounts for clients with foreign residence
• Nutmeg (UK): added US-person restrictions after JPMorgan’s 2021 acquisition

Active-duty military and US government employees stationed abroad are typically exempted.

Americans abroad are used to thinking about the Foreign Account Tax Compliance Act, or FATCA, as a problem with foreign banks. The mirror problem is now the larger one.

What FATCA started, MiFID II compounded

FATCA, the 2010 law that requires foreign financial institutions to report on accounts held by US persons, produced a measurable wave of closures abroad. The Democrats Abroad 2014 FATCA survey, filed with the Senate Finance Committee, drew 6,552 responses from Americans in all 50 states and across six continents. One in six respondents had been affected by a foreign account closure.

The organization’s 2022 Tax Survey reported to the IRS that 20% of respondents who tried to open a bank account abroad in the previous two years were unable to do so. AER has covered the foreign-bank side in its analysis of FATCA enforcement in Gulf states and the pending EU court case over Belgium’s transmission of accidental-American account data.

The US-brokerage side moves on different rails. The EU’s Markets in Financial Instruments Directive II, or MiFID II, took effect in 2018 and required firms selling investment products to EU residents to produce a Key Information Document, or KID, for each product. Most US-domiciled mutual funds and ETFs do not produce KIDs. That left US brokers two options for European clients: rebuild compliance for the EU regime, or stop servicing the clients.

Why brokers exit

No US law requires brokers to close the accounts of Americans who move abroad. The decision is internal policy. Cerity Partners frames it bluntly: “The decision to freeze an account is an internal financial institution policy.”

Brokers cite three drivers:

• Multi-jurisdiction compliance cost: the price of meeting foreign licensing and reporting rules outweighs revenue from small client populations in any one country
• Legal uncertainty: operating without local licensing exposes firms to enforcement risk abroad
• Documentation burden: MiFID II’s KID requirement, FATCA reciprocal reporting and anti-money-laundering verification stack on every non-resident account

The aggregate scale is hard to verify. There is no SEC, FINRA or regulatory filing that captures account closures triggered by client residence changes. Trade press and financial-advisor surveys have circulated figures in the high hundreds of thousands for 2025, but no primary source documents that total.

US brokerage account closures that happen first

US mutual funds typically go first. Fund custodians enforce US-resident restrictions that brokers had previously left dormant. ETFs remain available in most cases, with EU residency the main exception under MiFID II.

Inherited IRAs are a separate pressure point. Cerity Partners describes them as “particularly burdensome” because the inheriting account-holder may already be abroad, and the firm holding the IRA may decline to service a foreign address even where the deceased’s relationship predates the relocation.

What this means for Americans abroad

The pattern is structural. Americans who emigrate face account restrictions on the foreign side under FATCA and on the US side under brokers’ internal residence policies. The Democrats Abroad surveys quantify the foreign-side cost. The US-side cost is harder to size, but the roster of named institutions exiting or restricting the business functions as a market signal regardless of the missing aggregate number. Most US brokers still servicing non-resident Americans require minimums that price out middle-income clients.

Citizens of no other country face this dual restriction, the Democrats Abroad Taxation Task Force wrote in its 2023 response to Treasury, not Cuba, Iran or North Korea.

What remains unknown is the total number of US brokerage accounts closed for residence reasons. Until a regulator collects that data or Congress requires it to be reported, the scale of the squeeze sits in trade press and survey work, not in official statistics.