Are There Any Irish Financial Advisors Who Will Buy Us-Registered ETFs for Dual Us-Irish Citizens Resident in Ireland?

As some on this forum are aware, Americans living in Ireland find themselves in an investment Catch-22 as of January 2018. As US citizens they cannot purchase UCITS (European domiciled and regulated) ETFs—at least not outside of a pension account—because of the punitive US tax treatment of PFICs (passive foreign investment companies), but as EU residents they cannot purchase US-registered ETFs without unobtainable KIDs (Key Information Documents) because of EU PRIIPs (packaged retail and insurance-based investment products) regulations under the MiFID II (revised Markets In Financial Instruments Directive) legislation that took effect in 2018.

My understanding though is that MiFID II regulations contain a clause that permits US-based RIAs (registered investment advisors) to buy US ETFs on behalf of American EU residents, and that the regulations are also waived for individuals who meet the (rather stringent) requirements to be categorized as professional investors.

I know that this topic has been discussed before on this forum, but my question is whether there are any Irish financial advisors who would willing and legally able to purchase US-registered ETFs on behalf of dual US-Irish citizens resident in Ireland for a non-exorbitant fee or percentage of AUM. I am asking on behalf of a friend who has recently returned from the US to Ireland with a view to retiring early, and who wishes to supplement his income by investing what I realize is—from the perspective of the financial services industry anyway—the relatively small sum of c. €100,000.

I’m conscious that—even if it wasn’t almost impossible to do so—investing in US-registered ETFs has become relatively less attractive since (unless I’m mistaken) Revenue changed their position again in 2021 and stated that US ETFs, which were previously subject to 33% CGT, are subject to the gross roll-up regime 41% exit tax as of January 2022 (although there has been some talk about the exit tax being revisited), but the taxes my friend would save by constructing a portfolio of individual stocks and bonds would probably be outweighed by the additional complications and tax preparation costs that would be incurred, given the amount of money involved. The intention is to set up as simple a portfolio as possible (e.g. one global stock index fund such as Vanguard’s Total World Stock ETF, and one global bond fund such as Vanguard's Total World Bond ETF) that would involve no investment advice and minimal portfolio management (selling shares for income and rebalancing just once each year).

This is one of our specialist services.

All US citizens living outside of the USA should only use a specialist advice firm capable of dealing with the cross border complexities you mention.

It’s not straightforward and therefore impossible to achieve via a low cost solution

Marc said:

This is one of our specialist services.

All US citizens living outside of the USA should only use a specialist advice firm capable of dealing with the cross border complexities you mention.

It’s not straightforward and therefore impossible to achieve via a low cost solution

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Investor’s post is mildly amusing.

“I know that this is very complex but is there anyone out there doing it really cheaply?”

Well, touché, perhaps, depending on what you mean by complex. It would be unreasonable to expect a financial advisor to implement a complex investment strategy inexpensively, but—in contrast, for example, to attempting to approximate a broad index by constructing a diversified portfolio of individual stocks, which would circumvent both the PFIC and the PRIIP issues, as would acquiring ETFs indirectly by buying call options or writing put options—the buy and hold strategy described above, which would involve at most two trades and one cash transfer out per year, is the essence of simplicity, the complexity being entirely a matter of the tax and regulatory environment.

I do understand that American FATCA reporting requirements impose compliance costs on financial institutions, which is why so many retail brokers are unwilling to accept nonresident US citizens as clients, but presumably economies of scale apply here, and those that do—like Interactive Brokers and Schwab—do not charge nonresident US citizens extra to buy shares of individual stock.

So I would have thought that it should be possible for a Irish financial services professional who has an institutional account with Interactive Brokers, for instance, and that MiFID regulations do not preclude from doing so, to buy American ETFs on behalf of a client without having to go to too much trouble, but—since “you don’t know what you don’t know”—I’m open to correction.