US nationals living in the UK represent a large pool of potential clients for financial advisers.
According to Global Citizen Solutions data, 166,000 American nationals live in the UK, and that number is growing. In fact, Q1 2025 saw a record number of applications for British citizenship by Americans.
There are a number of financial advice businesses which specifically cater for US nationals here in the UK, but many non-specialist planning firms also have a few US clients on their books.
Being able to cater for US citizens can be a useful arrow in your quiver, and it doesn’t take too much extra preparation either.
Dealing with a US taxpayer is largely like dealing with any client: they need good financial planning and advice. In terms of tax wrappers, they have the same needs as any other client: retirement planning for their pensions, as well as ISAs and GIAs for other investments.
A bonus for advisers is the reporting year for US clients ends in February, so advisers can get this out the way before UK tax-year end
There are a few different reporting requirements that need to be met, but luckily, these are often handled by outsourced investment managers and platforms, which takes the burden of complicated US reporting and exchanges with the IRS away from the adviser.
It’s not an unfamiliar arrangement for many modern firms that outsource their investments for typical UK clients and host them on a platform.
Platforms that can cater for US citizens have a specific licence from the US regulator and a direct reporting link with the IRS.
This means that, once the client fills out a simple W-9 form, they can pull together all the tax facts clients need to satisfy the US government’s requirements each year.
A bonus for advisers here is that the reporting year for US clients ends in February, so it’s timely for advisers to get their end-of-year reporting for US clients out of the way before the rest of the client book in March ahead of UK tax-year end.
US citizens are subject to withholding taxes on their sources of income, which in layman’s terms is essentially income tax or tax on dividends and growth.
The good news for our friends from across the pond is that the UK has a favourable arrangement: the level of withholding tax they have to pay while earning and investing here is relatively low compared to many other countries.
The amount depends on what the clients are invested in, but it ranges from 5% to 15%.
Where the outsourced investment manager comes in is to offer the specific portfolios. Generally, due to tax rules, it is not beneficial for US clients to invest in collective investments.
Instead, their portfolios generally need to be made up of direct stocks and bonds, and they can’t be products domiciled outside of the US. That means they need to be US ETFs or direct stocks.
While this may seem inconvenient, it actually suits the different cultures of investing.
Collective investments are relatively alien to US investors, who much prefer to directly invest in stocks and bonds, rather than the collective funds which are much more popular this side of the Atlantic.
All in all, when it comes to US clients, there are some important things financial advisers need to keep in mind – but generally, the investment manager and platform can organise the complexities of the reporting and investment portfolio.
So, much like with UK clients, this leaves the adviser to deal with their area of expertise and the most crucial part of the relationship: financial planning.
Ben Lester is head of distribution at Morningstar Wealth
