The Lemon Fool

Hello fellow Fools,

I am an UK expat, living in Canada, with a London NatWest bank account wishing to transfer my share dealing account to another broker.

Are any of you aware of any brokers which do not have restrictions, such as a claim that the Anti Drug Money Laundering law prevents me from opening an account with them, that will permit opening of a share dealing account?

My history, both for my 20 year plus bank account, and my similarly aged share dealing account, demonstrate quite clearly that I am not any kind of drug dealer! I simply wish to invest in shares that will, by their dividends, pay for my expenses while I have my annual visit to see relatives and friends in the UK.

As a result of my former share dealing accounts, I have been bounced from the NatWest facility, and transferred twice more as a result of mergers in the brokerage industry.

Thank you, and I would appreciate some direction if this topic has been asked before on the Lemon Fool site.

Hi dmchaffie.

My instinctive answer would be to consider opening an Interactive Brokers account in Canada and use it for UK Equities (as well as any other ones you might desire).

However, double-check the relevant details before you consider doing so, e.g. minimum activity requirements (if any), that you can deposit/withdraw direct from your UK Natwest account etc.

Regards, Newroad

Im not sure about the residency side of things that might get in the way but can you not simply transfer accounts to the new broker.

Hello Gerry,

When I enquire about changing to use another stockbroker, all of the several firms seem to come back with the song and dance about the money laundering issue, so the answer to your question is that I have tried numerous share dealers and they all so far have given the same reason.

My question to this message board is this:
is anyone aware of a brokerage that is willing to open an account an account for A NON-RESIDENT,
a person who is not interested in flogging illegal drugs or laundering money, as can be demonstrated by my account histories, both for my NatWest account nor in my share dealing.

Thank you, however, for your suggestion.

Firstly, you don't say who your current UK broker is (I'd guess Interactive Investor from your description) and why exactly you want to change.

Secondly, just 'cos you have one "clean" account doesn't mean that you aren't Pablo Escobar Jr and in any case, no bank or broker will go through your account histories, it doesn't work like that.

The way that vast vast majority of financial service providers implement the anti-money laundering (AML) legislation and know-your-customer (KYC) guidelines is by the easiest and cheapest method that will pass muster, which is to outsource it to the UK credit ratings agencies, who will do electronic ID and AML checks. The very first thing the CRAs will do is look to see if you are on the UK electoral register at the address you supplied. If so they will then go on to do other checks, the algorithm for which they don't let on, but they know about pretty much your entire UK credit history (current accounts, credit cards, court judgements, etc), as well as the utility companies used at the address given and the name of the customer.

If any of that doesn't pass full muster then the electronic check fails and the bank/broker/etc will require you to turn up with, or send in originals or certified copies of, paper documents, inc. a photo id (passport, etc) and a recent utility bill with your name & address, and that's when the next easiest and cheapest method comes in, 'cos there's no way they're going to train or have their staff spending time on recognising, let alone verifying, foreign documents, so, simple rule: UK only.

Now, some, a very few, will go the extra mile. I was thinking of some of the UK bank branches in the Channel Islands, who are used to dealing with expats, although most of those nowadays do require a "minimum relationship balance". E.g. if I recall correctly, HSBC's is £50K, but on looking at their expat sharedealing page it seems that Canada is not in the list of countries they'll provide the service to residents of. https://www.expat.hsbc.com/wealth/investments/products/shares/

I then remembered that Redmayne Bentley used to provide UK broker services to expats, and indeed they still do. However:

"Can I keep my account if I move overseas?
Yes, unless you have moved to the US or Canada, in which case we will not be able to keep your account open.

Can I open an account if I live outside the UK?
:
We may consider opening an account for a client resident in a country outside the UK...
:
It should be noted that we cannot, under any circumstances, open accounts for the following:

US Citizens or those with a connection to the US e.g., place of birth, place of work etc.
Canadian residents."
https://www.redmayne.co.uk/faqs

So, I would suggest that, before you expend any effort elsewhere, you drop Redmayne an email and ask why they have the specific exclusion for Canadian residence and, in particular, if it is due to UK and/or Canadian legislation or treaty that is going to make it true for all brokers and impossible for you to open a UK broker account at all. (I believe the US exclusion is due to US legislation).

just a thought
if I was opening one in Canada, being a drug dealer or running foul of Anti Drug Money Laundering legislation wouldn't be of concern

Hello mc2fool,

Thank you for your assessment of my issue.

From your assessment, living in Canada seems to be a fault within the share dealing system; although I do note that several Canadian brokerages are able to maintain their share dealing privileges in the UK but they are commercial entities, and not simply an individual who wishes to maintain (1) a bank account, and (2) a share dealing account for dividends, for maintaining professional memberships as well as a useful cash account for holiday expenses.

I will look at the terms and conditions of Redmayne Bentley out of interest as a brokerage which explains their viewpoint unlike other brokerages I have contacted; other brokerages just say they do not permit Canadians to use their services.

I appreciate the time you took to identify the mechanics of methods the anti-money laundering and how they deal with off shore clients.

LOL @ pje16!

Newroad wrote:My instinctive answer would be to consider opening an Interactive Brokers account in Canada and use it for UK Equities (as well as any other ones you might desire).

Absolutely. Expat-friendly, multi-national and multi-currency.

Not sure why the OP missed or ignored your post. Perhaps they confused Interactive Brokers with Interactive Investor? Aside from naming similarity, no connection between the two.

dmchaffie wrote:Hello fellow Fools,

I am an UK expat, living in Canada, with a London NatWest bank account wishing to transfer my share dealing account to another broker.

Are any of you aware of any brokers which do not have restrictions, such as a claim that the Anti Drug Money Laundering law prevents me from opening an account with them, that will permit opening of a share dealing account?

You can try this site
http://www.pimfa.co.uk
which is a searchable register of stock broker services in the UK

From memory there are only about 6 that in theory accept non-UK residents for execution only.

I'd be interested to hear how you get on, so please update.

torata

torata wrote:

dmchaffie wrote:Hello fellow Fools,

I am an UK expat, living in Canada, with a London NatWest bank account wishing to transfer my share dealing account to another broker.

Are any of you aware of any brokers which do not have restrictions, such as a claim that the Anti Drug Money Laundering law prevents me from opening an account with them, that will permit opening of a share dealing account?

You can try this site
http://www.pimfa.co.uk
which is a searchable register of stock broker services in the UK

From memory there are only about 6 that in theory accept non-UK residents for execution only.

Interesting and useful site, albeit not for the OP I fear....

Going to https://www.pimfa.co.uk/managing-your-money/find-a-firm/ and ticking only Overseas Clients (non-UK resident) gets 24 firms, but then additionally ticking Online Dealing Services drops it to just 4. Those 4 are:

Charles Schwab -- go to https://www.schwab.co.uk/open-account-intro and select Canada for your country/region of residence and you immediately get "Your request to open an account cannot be processed. Schwab currently cannot open accounts for residents of your country/region."

Redmayne Bentley -- who we already know won't take Canadian residents.

Interactive Investor -- a little bit of digging in the T&Cs, at https://media-prod.ii.co.uk/s3fs-public/pdfs/terms_of_service.pdf, finds "14.3 You confirm that you are neither a resident of Canada nor a US person."

Walker Crips -- I can't find anything about residency restrictions, and it looks like they have a paper-only application system. https://www.wcgplc.co.uk/ShareDealing

So, it does looks like there is some blocking restriction (probably Canadian legislation) that stops UK brokers taking on Canadian resident clients. At least retail clients. The story may be different for non-retail clients, i.e. high net worth private banking type clients using a wealth manager, rather than an execution only broker. I don't know if dmchaffie is in that league...

@dmchaffie, you still haven't told us who your current UK broker is and why you want to move. If you let us know that then maybe folks here can suggest a solution that'll solve whatever issue you're having with them and allow you to stay put. Of course, if the issue is that they've found out that you are in Canada and have, as a result, told you that they'll be closing your account.....

You know, a lot of expats maintain a UK address and pretend they are living there, exactly to avoid these types of problems. Most commonly it's their parents or siblings address, at which they register to vote and have a (little used) current account at.....

mc2fool wrote:So, it does looks like there is some blocking restriction (probably Canadian legislation) that stops UK brokers taking on Canadian resident clients.

AJ Bell goes one better and blocks Canadian citizens even if they have no other meaningful connection to Canada, live permanently in the UK, and are perhaps also dual UK/Canadian citizens. T&C's paragraphs 10.5, 11.2, and 12.3.

The restrictions on US citizens are well known -- it stems from the ugly intersection of US extraterritorial tax law (FATCA) with the US's 'exceptional' citizenship based taxation. Canada, though, doesn't tax or otherwise bother its citizens when they live outside of Canada, nor does it try to apply its tax laws extraterritorially. AJ Bell's extra restriction appears entirely arbitrary, then. Shrug.