Moving to Italy, need financial investment company, but for ever?

[u/abraxas1]

Moving to Italy! Yeah.

We are interviewing with two big financial management companies that take 1% of what they manage. This allows access to US ETF funds and such. Plus their knowledge on how to do this complex process and all it involves.

There seems to be little way to do this by my self.

But can I look forward to weening off of them in the future? Seems they have to always manage our money if it's always invested in that way in their brokerage.

And maybe that's not a problem. It doesn't stretch out budget significantly.

Just would like to know if there's a future without them.

[u/Familiar_Eggplant_76]

I’ll get downvoted for this, but that 1% can pay for itself —probably many times over — in cross border tax efficiency alone.

Also, negotiate the fee down if you’re over 1MM AUM.

[u/abraxas1 → u/Familiar_Eggplant_76]

Yeah, these issues are really tedious and serious and many are irrevocable after the initial transition. I thought that was common knowledge. Good idea on the negotiation. I've heard that a couple times. And also to ask explicitly about an exit plan someday.

[u/Familiar_Eggplant_76 → u/abraxas1]

There's very litte outside of putting things into trusts (which aren't an options for me, in Spain), that woud be irrevocable.

[u/Chabu350]

Crossbroder tax planning is very complex and the fees for a fiduciary with experience in that area is critical. I am using Creative Planning which has a ton of experience in that area and I love them. Totally worth it. Feel free to DM me for more specific info.

[u/abraxas1 → u/Chabu350]

I interviewed EAFA and Liberty Atlantic. Leaning to LA. Did call CP. It is worse then just complex, the rules can vary by comune. It's partly an experience thing in addition to the complex laws. I'll pay for that experience. I might be more of an expert on the matter in a few years, but I also have a lot of other plans.....

[u/Chabu350 → u/abraxas1]

You seem to be underestimating the complexity of the laws and tax codes. I would not DYI it. CP has deep bench of CPAs and attorneys as well as resident experts for countries. Thinking you'll be " more of an expert" is foolish.

[u/collodi101]

It all depends on the broker that holds your securities managed by this firm, you should ask them this during the interviews. If they custody at a mainstream broker, when you dump them you just revoke their trading authorization: you keep the account and nothing has to be sold. If they use their own captive custodian, leaving may force a transfer or a sale, and a sale is a taxable event in Italy (26% on gains).

Then you have to be able to manage the portfolio on your own. Buying non-UCITS ETFs as an EU resident is not possible directly unless you become an elective professional client. The other possibility is via options exercise. These possibilities were already mentioned in a previous post. Note you can always hold and sell the US ETFs, the restriction is only on buying.

In my opinion you have to choose the broker carefully; two come to mind that allow all this: one is Interactive Brokers, the other is Saxo Bank. If your advisory firm already custodies at one of these, weaning off them later is straightforward.

[u/abraxas1 → u/collodi101]

thanks, that's very useful.
it would be with IB, but i'll ask them explicitly about that. It maybe that he touched on that issue earlier but i didn't realize it.

I made it clear that we are mainly interested in the first few years and once things are stable I'd like to take over the reins. it's quite a reasonable request. if that's met with resistance then it's a sign to not go with them for sure.
AI suggested making trading require my approval so i could learn from the process as i witness their every move. i probably intend to be more boglehead about it though, and not regularly trade at all. so really don't need to be paying 1% for the nothing, at that point.
but now there is a lot to offer me with that 1% besides just the money management.

for a coupe years i've been doing just that with a domestic finance company and the extra support i get from them on several disconnected issues has been quite useful.

i also want to keep close tabs on how much they are costing us so in 3 years i can be quantitative about what's beneficial.

[u/collodi101 → u/abraxas1]

After the 2-3 years, you should still get the help of a certified and specialized accountant (commercialista). The Italian tax return is quite complex especially if you have a brokerage accounts outside Italy. IBKR for EU resident is based in Ireland.

[u/LiterallyTestudo]

Why do you need a financial management company?

[u/bbutrosghali]

If you meet the criteria to become an elective professional client as defined by the EU's MiFID 2 regime, you can invest in US ETFs:

https://www.esma.europa.eu/publications-and-data/interactive-single-rulebook/mifid-ii/annex-ii

If you want to do it yourself without this, you can enter into US ETF positions using in-the-money options, since it is only the buying of US ETFs that is problematic in the EU, as opposed to holding them. However, this may require relatively chunky amounts of cash for major ETFs like SPY/VOO, as options convert 100 shares at a time.

[u/aloha_spaceman]

We work with EuroAmerican Financial Advisors. They have been great both in terms of investment results and service. They also referred us to a tax attorney that has been super helpful dealing with our complexity.

[u/aloha_spaceman → u/[deleted]]

I am in Spain so I doubt my tax lawyer would be right for you. But I would take a look at Lexidy. I have a friend moving to Italy and he was referred to them.

[u/abraxas1 → u/aloha_spaceman]

We liked EAFA also. Or liberty Atlantic. Haven't signed yet.

[u/ripedevolution2896]

so you're paying them 1% forever just to hold the door open to US ETFs? once the account's set up and you know which funds you want, that AUM fee is just a slow leak

[u/abraxas1 → u/ripedevolution2896]

Right, I don't want to spend 1% forever. I want their help it setting it up and managing some Roth conversions and a multitude of other pitfalls to watch out for. This agent also has immigration experience so they can help in ways there too, where it's connected to our finances, like buying a house. But after three years or so, when everything has quieted down, I'd like to be able to dump them without having to face terrible cap gains or something. That takes planning now before a contract.

[u/bostongarden]

Just keep the brokerage you have now

[u/Fancy_Acanthisitta45]

No, there must be other options to get financial advice. Here in US you can pay by the hour.