contributed by Peter Dougherty, CFP®, CRPC®, EFP (Spain) of USpain Financial Consultancy

Thinking about moving to Spain?

There’s a new cross-border financial planning firm that can help. It’s called USpain Financial Consultancy, and its mission is to help Americans who live in Spain, or are thinking about it, make confident financial decisions across two very different systems. Clients get clear insight on how U.S. and Spanish rules interact, practical advice, and a personalized financial plan covering banking and currency, financial goals, taxes, investments, retirement accounts, and the move itself.

Peter Dougherty founded the new firm. He is Spain’s only U.S./Spanish dual-accredited financial planner: having earned the CERTIFIED FINANCIAL PLANNER® credential in the U.S. and the European Financial Planner certification in Spain.

As a financial planner at Spain’s Bissan Wealth Management the past four years, he helped Americans there with their financial plans and investments. But assisting them with their investments in Spain proved to be consistently difficult.

As Dougherty describes it: “if you think of a financial plan for a client as being like the doctor’s diagnosis and their investment portfolio being like the doctor’s prescription, for Americans in Spain the pharmacy has been filling the wrong prescription. The plan correctly identifies what the client needs, but the portfolio delivers a treatment that doesn’t match.”

The primary reason for this, Dougherty explains, “is that American citizens continue to be bound by U.S. tax rules no matter where in the world they live. Some of these rules severely penalize investing in any mutual fund or ETF that is managed in Spain. If an American wants to have an investment portfolio in Spain that means their only viable option is to purchase individual stocks and/or individual bonds, which increases the costs and reduces their diversification vis-à-vis a mutual fund or ETF. Thus, it’s often wiser for Americans to leave their investments in the U.S. rather than transfer financial assets to Spain.”

That was the motivation for Dougherty to create his new firm: providing Americans who live in Spain the best of both worlds: a financial plan and advice for their life in Spain that assists with an investment portfolio that remains predominantly in the U.S. He believes that financial planning and investing need to be designed together rather than handled by separate people or processes. But he also realizes that Americans in Spain seldom need assistance with Spanish wealth management.

For Americans thinking about moving to Spain, talking to a cross-border US/Spain financial planner beforehand can be useful for a number of reasons:

· Timing the move can save money. Decisions like when to sell appreciated assets, exercise stock options, or convert retirement accounts are often better made before moving abroad.

· US retirement accounts don’t always translate cleanly. Spain may not recognize the tax-advantage status of a 401(k), IRA or pension the way the US does. A cross-border planner can help structure withdrawals to minimize tax in both countries.

· Reporting requirements multiply. Americans abroad must handle US filings like the FBAR and FATCA Form 8938.

Peter Dougherty, CFP®, CRPC®, EFP (Spain), is a financial planner at USpain Financial Consultancy, where he specializes in advising Americans living in the country. He is the author of two financial planning books, one in English: “The Dougherty Code: Secrets of Financial Planning in Spain Revealed” and the other in Spanish: “La Hoja de Ruta Fiscal y Financiera para los españoles en EE.UU.” For more information: https://www.financial-planning-in-spain.com

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