Why Custodian Selection Is Different for International Investors
The starting point for any international portfolio is choosing where to hold the assets. For domestic investors, this is a relatively straightforward comparison of platform features, fees, and fund range. For internationally mobile investors, custodian selection is significantly more complex — the most fundamental question is whether a platform will accept you as a non-resident client at all, and on what terms.
Many investors discover the limitations of domestic-focused platforms only after they have moved abroad, when accounts are restricted, contributions blocked, or in the worst cases, accounts closed with forced liquidation. Building an internationally resilient portfolio requires starting with custodians explicitly designed for cross-border clients.
The Fundamental Problem: Platform Residency Restrictions
UK-focused retail investment platforms are regulated by the FCA and designed for UK residents. Their terms of service typically require customers to be UK-resident, and most specify that accounts should be closed or transferred if the customer becomes non-resident.
The practical consequences for internationally mobile investors vary:
- ISA contributions: Non-UK residents cannot make new ISA contributions. Existing ISAs can generally be maintained but may be restricted to a "limited account" with no new contributions and no changes to fund selection at some platforms.
- Pension contributions: Non-UK residents cannot generally receive UK tax relief on pension contributions and may find pension account access limited.
- General investment accounts: Some platforms will close general investment accounts of non-residents; others will allow assets to remain but block new investments. Platform policies differ.
- Dealing accounts: Active dealing (buying and selling) may be suspended while the platform reviews non-resident status.
The lesson: investors who may become non-resident should either use platforms explicitly accommodating to international clients from the outset, or ensure they have a transfer plan before departing the UK.
Platforms Designed for International Investors
Several platforms are specifically designed for cross-border investor needs:
Interactive Brokers (IBKR): One of the most internationally accessible platforms globally. Accepts clients from the majority of countries, offers multi-currency accounts, broad market access (equities, ETFs, bonds, options across most major exchanges globally), competitive pricing, and established infrastructure for non-resident clients. The platform has a steeper learning curve than simpler UK platforms but offers genuine international functionality. Investor protection: SIPC coverage up to USD 500,000 for US accounts; European accounts covered by ICS or similar local schemes.
Saxo Bank: Danish bank regulated by the Danish FSA, with offices and client service across multiple regions. Offers multi-currency accounts, broad market access, and explicit accommodation for non-resident international investors. Saxo's pricing is competitive for larger accounts; minimum balances and fee structures favour investors with GBP/EUR 50,000 or more.
Swissquote: Swiss-regulated bank offering investment accounts to international clients. Strength in European market access and fixed income. Swiss regulatory framework provides strong rule of law and political stability. Swiss bank deposit insurance on cash balances up to CHF 100,000. Higher account costs than IBKR but offers a private banking-adjacent service level for larger accounts.
Barclays International: The international banking arm of Barclays, operating from the Isle of Man and other offshore centres. Offers investment accounts and private banking services to internationally mobile clients, with minimum wealth thresholds (typically GBP 100,000+ for investment accounts). Strong for British expat communities in the Gulf, Asia, and Europe.
Julius Baer, Lombard Odier, Pictet (Swiss private banks): The major Swiss private banks serve internationally mobile HNW clients globally. They offer a full private banking relationship — discretionary and advisory investment management, banking, lending, and estate planning. Typical minimum portfolio sizes are CHF 1–2 million, though this varies. Higher cost structure than self-directed platforms but includes relationship management and consolidated portfolio reporting.
EFG Bank, LGT Bank, Banque Internationale à Luxembourg (BIL): European private and wealth management banks with strong international client coverage, particularly relevant for Cyprus, Mediterranean, and Middle East-based clients.
Investor Compensation Schemes by Jurisdiction
Understanding what protection exists if a custodian fails is an important due diligence step:
UK (FSCS): Investment accounts at FCA-regulated firms are covered by the Financial Services Compensation Scheme up to £85,000 per eligible investor per firm. This covers the failure of the investment firm — it does not cover investment losses. FSCS protection is reduced or eliminated for non-eligible claimants (largely businesses with certain turnover thresholds, but individuals are eligible regardless of non-resident status).
US (SIPC): Accounts at Securities Investor Protection Corporation member broker-dealers are covered up to USD 500,000 (of which up to USD 250,000 can be cash). SIPC covers failure of the firm, not investment losses.
EU (Investor Compensation Schemes): EU member states are required under the Investor Compensation Schemes Directive to maintain compensation schemes covering investors up to EUR 20,000 per investor per firm in the event of firm failure. This is significantly lower than FSCS coverage.
Switzerland: Switzerland is not an EU member and does not participate in EU deposit or investor compensation schemes. Swiss banks are subject to Swiss depositor protection (esisuisse) for deposits up to CHF 100,000 (cash only, not securities). Securities held in custody at a Swiss bank are segregated assets and are not part of the bank's insolvency estate — an important structural protection. Swiss regulations require securities to be properly held in custody, reducing (but not eliminating) risk.
Isle of Man: The Isle of Man Financial Services Compensation Scheme provides coverage for insurance and deposit products; investment accounts at authorised firms are covered up to 100% of the first £30,000 and 90% of the next £20,000.
The key practical point: diversifying assets across multiple custodians in different jurisdictions reduces concentration risk with any single platform, above and beyond compensation scheme limits.
Nominee vs Segregated Custody
Most retail investment platforms hold client assets in a nominee account — a pooled account held in the platform's name (or its custodian's name) on behalf of all clients. The individual investor has a beneficial interest in the pool.
Nominee custody is practical and cost-effective. The risk is operational: in the event of platform insolvency, identifying and extracting individual clients' assets from the pool takes time and administrative effort. In well-regulated jurisdictions (UK, EU, Switzerland, US), client money rules require firms to segregate client assets from their own assets, making the practical insolvency risk manageable. The key risk is fraud — if the firm is misappropriating client assets — rather than simple insolvency.
Segregated custody — holding assets in your own name at a sub-custodian — is standard for private bank relationships and provides cleaner legal ownership. In the event of the private bank's failure, your assets (not your cash deposits) are clearly yours and are not part of the estate.
For retail platforms, nominee custody is standard and acceptable for most investors. For very large holdings (USD 1 million+), exploring platforms or private bank custodians offering segregated holdings is worthwhile.
Account Types Available to Non-Residents
The account types available to non-residents differ from those available to domestic investors:
- General Investment Accounts (taxable accounts): Available at most international platforms. Tax treatment depends on the investor's jurisdiction.
- ISAs: Not available to non-UK residents for contributions. Existing ISAs can typically be maintained.
- SIPPs and UK pensions: Limited for non-residents; no UK tax relief on contributions.
- Multi-currency accounts: Available at IBKR, Saxo, Swissquote, and private banks. Essential for international investors managing assets in multiple currencies.
- Offshore investment bond accounts: Provided by specialist life companies (RL360, Zurich International, FPI) rather than investment platforms. Available to non-residents of most jurisdictions.
- Discretionary managed accounts: Private banks and some larger wealth management platforms offer full discretionary management for clients who prefer not to manage their portfolio directly.
Fee Comparison for International Investors
Fees vary substantially between international platforms. Key cost components:
Custody/account fee: Ranges from 0.1–0.5% per annum of assets at larger platforms; IBKR charges $0/month for accounts with USD 100,000 NAV or more.
Trading commissions: IBKR: from USD 0.35 per trade for US equities; €1.25 for European shares. Saxo: tiered from approximately 0.05–0.12% per trade depending on account size.
FX conversion costs: Currency conversion charges are a significant ongoing cost for investors regularly converting between currencies. IBKR has among the most competitive FX rates of any platform accessible to retail investors (0.002%). Private banks can charge 0.5–1.0% on FX conversions.
Inactivity fees: Some platforms charge monthly fees if minimum activity thresholds are not met. IBKR charges USD 10/month below certain thresholds. Verify fee structure for the intended trading frequency.
This guide is for general information only and does not constitute regulated investment advice. The value of investments can fall as well as rise. Investor compensation scheme protection limits change and are subject to eligibility conditions. Always seek independent regulated advice before selecting investment platforms or custodians.
How Global Investments can help
Global Investments helps internationally mobile clients identify appropriate custodian and platform solutions for their specific circumstances — country of residence, portfolio size, currency needs, and tax reporting requirements. We have established relationships with international custodians and can facilitate introductions and account opening. Contact us to discuss custodian selection.
Frequently Asked Questions
Which investment platforms accept non-UK residents?
Most UK-focused retail platforms (Hargreaves Lansdown, AJ Bell, Vanguard UK, Fidelity UK) restrict accounts to UK residents or close existing accounts when clients move abroad. Platforms designed for international investors include Interactive Brokers (accepts clients in most jurisdictions), Saxo Bank (broad international coverage), Swissquote (Swiss-regulated, strong for EU/international clients), and Barclays International (for clients meeting their minimum wealth threshold). Private banks with international operations are also a natural home for internationally mobile clients.
What is the difference between nominee and segregated custody?
Nominee custody means the investment platform holds your assets in a pooled nominee account in the platform's name. You have a beneficial interest but assets are commingled with those of other clients. In an insolvency, segregating your assets from the insolvent estate requires an administrative process. Segregated custody means your assets are held separately in your own name at the custodian. Segregation eliminates the administrative complexity in an insolvency and is standard for private bank relationships. Most retail platforms use nominee custody.
What investor protection is available for assets held at international platforms?
Investor protection varies by jurisdiction. UK platforms are covered by FSCS up to £85,000 per eligible investor per firm. US accounts at SIPC-member broker-dealers are covered up to USD 500,000 (including up to USD 250,000 in cash). EU investment firms are covered by national investor compensation schemes typically up to EUR 20,000 per investor. Swiss platforms are not part of the EU system; Swiss bank deposit insurance covers deposits up to CHF 100,000. The appropriate compensation scheme — and its limits — should be understood before selecting a platform.
What reporting capabilities should an international investor require from a custodian?
An international investor needs reports that facilitate multi-jurisdiction tax filing: transaction history (with dates, descriptions, values in multiple currencies), income reports showing dividends, interest, and other distributions (gross and net of withholding), realised gains reports (with cost basis information), and annual account valuations. Some platforms also produce CRS/FATCA-ready reports. Inadequate reporting infrastructure significantly increases the cost and complexity of tax compliance.
What is FATCA and how does it affect account opening for international investors?
FATCA (Foreign Account Tax Compliance Act) is US legislation requiring foreign financial institutions to report accounts held by US persons (citizens and Green Card holders) to the IRS. Non-US investors are not directly subject to FATCA but may find that some foreign platforms decline US-person clients entirely due to FATCA compliance costs. Non-US investors may be asked to certify their non-US status (W-8BEN form) when opening accounts at platforms that have US regulatory relationships.
This guide is for general information only and does not constitute financial advice or a personal recommendation. The value of investments can fall as well as rise and you may get back less than you invest. Past performance is not a guide to future returns. Tax rules, investment regulations, and the availability of specific investment vehicles change — always verify current rules and seek advice from a qualified independent financial adviser before making any investment decisions.