Friday, May 24, 2013

Just when we thought things were looking up...

Before leaving the US, my wife and I invested what little monies we have in financial institutions that were clear about being able to provide services to us while we lived abroad. One institution, in fact, seemed to roll out le tapis rouge to us and actively helped us organize our resources.  Each letter and correspondence we received was printed on beautiful ecru colored 90 pound letter stock with all the fancy frilly trimmings.

Yesterday that all changed.

Printed in fading black on cheap pure white 40 pound letter stock...

"Thank you for choosing Fidelity Investments as your financial services provider.  Unfortunately, because one or more of the addresses associated with your accounts(s) are located in a certain country outside the United States, we can no longer continue to provide investment services for your accounts(s) listed below.  This change will take effect on July 1, 2013...  

...We regret any inconvenience caused by these changes.  We encourage you to find an investment firm that is able to provide a full range of services for you, and we will be more than happy to assist with the transfer of your accounts.  Sincerely, Fidelity Investments"

The only comment on what changed turns out to very likely be a lie.

"Fidelity operates in an ever-changing regulatory environment, and a recent review of our business has led us to the conclusion that we can no longer continue to provide investment services to customer residing in certain countries."

The announcement took my breath away.

How could money made in the US, taxed in the US, and managed in the US be subject to such drastic changes in a company policy and services offering?

With a hornet in my hat, I called them.  I was only able to work my way up the ladder to a supervisor. Unsurprisingly, what I got was a broken record about how sorry they were, but there would be no exception.  Not that I'd even asked for an exception.  They claimed to have called me on May 1st (Labor Day here in Europe) but we never received a call nor a left message at any of the phone numbers this formerly tapis rouge company has on file.  I didn't push all that hard, hornet in my hat or not.  That's how stunned I was and how concerned I became for where to go and what to do next.  Yes, I realize I could easily have called one of their VPs, but to what end?  Register my anger?  Nothing would change, so why bother?

When they no longer want your business, they know what to do.

My wife Judith did a little research on possible regulatory changes in international banking.  She found three Bloomberg articles that might apply (one, two, three).  Yet, when I read them, I had a hard time seeing how the world being angry at the US and English banking systems for the AAA rated junk they sold everyone could impact ex-pats in the way the Fidelity letter described.

A very quick bit of research led me to contact four investment houses and a state-side family member offered to contact a fifth for us.  What we found is that there is no common approach to how US-based investment houses treat US ex-pats and their US-hold monies.  This led me to wonder what regulatory changes were being offered as an explanation for wanting us to take our monies and leave?

At one end of the spectrum is the company T.Rowe Price.  I cold called them to see if they provided services to US citizens living aboard.  Their answer was an unflinching "NO!"  In fact, if you held an account with them prior to leaving the US, you could not change your investment positions in any way, except to sell your positions or move your account to another institution.  Further, this policy of non-service has been in effect for years.

Discovering a slightly different position on the topic, our family member was told that all we needed was a US address and the investment firm would be able to help manage our resources.  There are unanswered questions about taking this approach.  When I asked Fidelity about changing our address, I was told we needed to prove we actually lived at the "legal" address they had on file.  It's unclear what kind of legal responsibilities the other firm that was contacted would be willing to take on.  I'll call them myself and see what they have to say.

Somewhere else along the full range of possibilities are services provided by Charles Schwab.  Their website declares that they can and do service US citizens living abroad.  Depending on the county you live in, there will be restrictions.  I cold called their international group.  I found someone who seemed to have a wealth of information to share.

While they are not licensed to trade and have no store-front in France, they say they would allow us to buy, sell, and manage investment instruments, and, at the same time, do what is required by both countries.  The wrinkles and nuances described include, and I'm sure are not limited to:
  • Charles Schwab withholds 10% of any investment sale for US tax purposes
  • France prohibits new investments being made into mutual funds
  • However, if you already hold a position in a mutual fund, you can trade it or invest further into it
  • France seems to have no concerns, however, for the purchase and management of investor bonds, Exchange Traded Funds, commodities, or equities
  • France treats prospectus' as solicitations and are strictly controlled
The thread of our conversation led me to ask a lot of questions. 

Specifically, why would France take such a strong position against mutual funds?  The question went unanswered. 

How is France's position on solicitations related to prospectus distribution, since it's simply information about a fund or company?  Again, the question went unanswered. 

Is Charles Schwab facing regulatory changes or a hostile regulatory environment that will drive them to change their services to overseas clients?  This was answered with "...we see nothing that will change our current client services offerings.  In fact, we are seeing increased business from clients being driven away from investment houses that no longer offer such services..."

The answer led me back to something the Fidelity supervisor shared.  Apparently, they are driving away 16,572 of their clients.

My final question to the Charles Schwab international group was why might an investment house shut down services like this?  The answer was pretty clear, and was one my wife would have easily anticipated:  COST

It appears that, even as large as Fidelity is, they feel they can no longer "afford" it's US citizens living off-shore.  Staffing and managing off-shore client groups had become too "expensive".

Such is the nature of greed, isn't it?  Not "making" enough?  Get rid of the most costly elements of your corporate system and you'll instantly be seen as "Wall Street profitable" again.  Even from here I can fully experience the Wonderful Glories of Unfettered Capitalist Banking.

What I've written here comes after three hours of research and phone conversation late last night.  The final chapter is far from being written in this story.  I have a mountain of research to do and a fair number of investment houses to talk with before I feel more comfortable with the topic and know where we'll be moving our limited resources.

We have five weeks to get this sorted out.

Wednesday, May 15, 2013

Rocks and other hard French things...

Jude and I had a Big House Out and About Day today.  It was filled with Minor Adventure and Mundane Duties.

I've been running all over the city to see if I could find une canne de marche.  It would be good to have one as it would complete an outfit I'm working on.  Bowler.  Evening coat.  Stick.  You know.  That kind of thing.  Just to see how the French will react.

Today, I walked Jude down to her hair appointment.  After being introduced to a Brit who spoke perfect French, I ducked out and went in search of une canne de marche.  Pharmacies here seem to stock, from time to time, some rather stylish walking sticks.

Well, I struck out. But Jude came home after her appointment with three loaves of bread and a very cute hair cut.  She did a little shopping on her way home after having her locks bobbed.

One of our concerns in moving here was the availability of bread that she could eat.  Jude is gluten intolerant and can't eat eggs and a fair number of other things too.  Yet, within a week of landing in France she'd found that the food system here is well aware of allergic reactions to mean and nasty things and have come up with a rather broad range of alternatives.

My wife now enjoys sarassin and quinoa based breads.  There are nut based breads too, if they are to your liking.  All this can be found at just about any natural food store anywhere in the city.

I've decided to give up my search for a walking stick.  Well, for now at least.  Do I really need to confuse the Parisians any more than they already are at the sight of me coming down the street?  I thought not.  I'm challenging enough to French Sensibilities as it is.  I'm sure of it.

So I sat down at this computer to work a few more images.  I did some house chores and Jude started to cook what smells like it'll be a wonderful stew.  We gathered up our laundry from a wash cycle we performed on them earlier before heading out for Locks Bobbing and Stick Hunting.  Jude dove back into the kitchen to continue cooking and I heard the Call of the Trappists and popped open a brew.

Suddenly I hear her say "damn!  This thing won't cut!!"

One of her loaves of bread was hard as a rock.  A jack-hammer couldn't pass through it.  It had been bien cuit.  If there is one sacred thing in France that is completely insupportable, it is inedible bread.  It was time to take the rock back to the store and see what could be done about it.

After practicing a few lines of French, we headed down the street... and into the store we marched, rock in bag in hand.

Jude said, in her best French language, "I bought this bread this morning.  I would like to demonstrate something to you."

Out of the paper bag came the rock.  With a firm hand and a solid WHACK! the sales lady with startled owl-wide eyes understood immediately the problem. 

"C'est dur!" 

To which I replied, for emphasis, "C'est trop dur!!"

The situation was quickly remedied with a fast hand-off of a new loaf.  Only to find out is wasn't one of the breads my wife could eat.

No matter.  I will eat the "not the rock".  It tastes good with butter.  Yes.  I've already had a slice and confirmed that French Bread Alignment as well as Peace, if not Prosperity, has been nearly achieved.

We can go to another store tomorrow and pick up the proper loaf of bread.  With all this walking about I may need une canne de marche.

Friday, May 3, 2013

Still more friends...

OK.  It's official.  We have no right to complain about a lack of friends.  Our Dance Card is now nearly French State Approved Full(tm).

Jude and I headed to Girona to visit a childhood friend of her's who has lived in Spain for over 30 years.  This friend was an inspiration for Jude.  When we made our Escape from America Plans, we often said that if her friend could do it, so could we.

We had a bit of trouble finding reasonably priced rail between Paris and Girona.  The best we could do was to TGV to Perpignan and then bus into Spain.  Doing that would save us 230Euro.  So off we went in search of adventure.

After the troubles trying to find transportation into/out-of Spain, we had a growing feeling that Spain was remote and perhaps medieval.  The Lightening Quick Mind loves to draw Instant Conclusions.

What we discovered is that Spain is absolutely wonderful. 

For me, the south of France and the Catalunya portion of Spain feel very comfortable.  It's high chaparral brush and trees everywhere.  I grew up in Southern California and I could see why the Spanish felt they could own that part of the New World.  If it weren't for the differences in language, I wouldn't have known if I was in Europe or back in the USS... um... A.

We ate dinner in the hotel restaurant the night we arrived and shared an incredible bottle of Catalunya wine, Better-Than-Paris-Bistro-Fare food, and started to experience a slower, deeper pace of life.  Spain became our Plan C should Plan A-France not want us to spend our retirement monies here nor Plan B-Italy feel we are not worthy.

Visiting with Jude's friend was well worth the travel effort.  She was very kind and drove us around the Catalunya countryside and to some very fine places where we shared lunches and conversations just like the old friends that they are.

Jude's friend's husband and I spoke French the entire time as he doesn't speak English.  I was happy that we were able to cover a lot of ground and I learned a lot about Spanish culture.  What I didn't realize until we had returned to France is that he is also a very well informed oenophile.  His knowledge of European wines and each and every region they come from is impressive. 

He gifted us what is reported to be a fine Spanish wine.  The timing couldn't have been better.  Jude and I have been together 20 years in a few days and we will enjoy sharing the Better-Than-Cheap-Plonk bottle of red.

The Final Piece of our Spain Adventure took place in Perpignan.  We awaited our train when a TGV for Avignan arrived.  We were becoming anxious when it didn't leave on schedule to make way for our train.  Troubled, I suggested that I needed to see if the cars sitting on our tracks was actually the conveyance we needed.

With minutes, plenty of minutes, yes several minutes to spare, we raced to our seats on that TGV.  Shaking our heads, we realized it would have been horrible to have to wait another three hours to catch the next train north had we missed this one.