London & Capital is offering to take on advisers’ US clients if they do not want to service them after the Foreign Account Tax Compliance Act comes into force.
Fatca will require all foreign financial institutions to sign an agreement that they will provide the IRS with information on any US taxpayers they deal with.
In February, London & Capital launched five US tax-compliant model portfolios targeting US residents in the UK. The portfolios invest in US-compliant assets and are designed for US citizens and green card holders living outside the US.
L&C investment director Tony McLouglin says advisers can either use the model portfolios to ensure tax compliance, outsource the discretionary fund management for their US clients to L&C or pass them across completely. He says the firm has taken on around 30 clients from six adviser firms in the last two and a half years.
Clients passed over to L&C or referred for discretionary fund management must have a minimum of £500,000 to invest. The model portfolios have a minimum investment of £10,000.
L&C pays trail commission of between 25 and 50 basis points for clients passed to it or referred to its discretionary fund management service.
McLoughlin says: “We are seeing advisers coming back to us saying they are not going to be in a position to properly look after US clients and they have invited us to take on the clients.”