How to deal with cross-border clients

Advisor says there is often a knowledge and licence gap for professionals when dealing with investors who move between Canada and the US

How to deal with cross-border clients

Moving from Canada to the United States – or vice versa – can be a daunting task when it comes to finances, with a host of unknown tax scenarios for the average client.

What’s my tax situation? Will I have to take a hit to move my money? How can I ensure my daughter in the US gets my assets correctly?

It’s a specialised area that Shiraz Ahmed, financial advisor, Sartorial Wealth of Raymond James Ltd, has expertise in, backed up by personal experience of coming from a cross-border family. He will share his thoughts and experiences in a Cross Border Wealth Management Strategies panel at the Wealth Professional Innovation and Strategy Summit on May 29 in Toronto.

The panel will look at areas like: RRSPs and RRIFs for Canadians living in the US; IRAs for Americans living in Canada; investments for Americans wanting Canadian securities; investment accounts for US-resident children of Canadian-resident parents; and discretionary and non-discretionary portfolio services in both currencies.

Ahmed said that both countries have a unique set of regulatory laws. “More importantly, the laws are actually residency based for an individual. It doesn’t matter where you are a citizen of, it’s where you reside that will actually govern and dictate the jurisdiction that you follow.

“You can be an American person living in Canada and you will be subject to Canadian laws. But because of the IRS and taxation, there’s another realm that goes alongside it, which is a tax-related conversation. There are two parts of the equation but both the individual and firm need to be licenced.”

Ahmed added that a lot of the times, clients’ predicaments fall into three main categories: a Canadian resident with a US retirement account; a US resident with a Canadian retirement account; or families where money is in one country and the beneficiary is in another.

He said: “These are the big, big catch-alls and the interesting things is that most Canadian-based advisors aren’t as well versed in the US, their laws and what they are capable of doing, you have people who may not be completely cashing out their retirement accounts, causing a huge tax event for themselves.

“And vice versa, in the US it’s another big problem. To think the moment I cross over the border I have to get rid of my 401(k) or I have to get rid of my IRA or something of that nature, is absolutely not true. More often than not, there are continuances that can happen, providing that the institutions and individuals are both licenced to handle that.”

Shiraz Ahmed will be sharing insights on this topic and more at the upcoming WP Strategy Summit on May 29. See further information or book your ticket here