By Jonathan Laws, ACA, Ch.FCSI, Series 65, Senior Independent Financial Adviser, Cameron James USA.
There is no such thing as FCA regulated advice for US residents, in the sense the phrase is usually meant when a firm says it.
The FCA is the conduct regulator for financial services business carried on in the United Kingdom. Its authorization is a permission to do certain things there. It is not a passport, and it says nothing whatsoever about whether a firm may advise a person living in New York, California or Texas. That question is answered by US federal law and by the securities law of the state where the client lives, and by nothing else.
So when a US resident is told that a firm can help because it is FCA regulated, the statement does not follow. The real question is narrower and considerably harder to answer: on what specific basis is this firm permitted to act as an investment adviser to a person resident in the United States? There are only two acceptable answers. Either the adviser holds SEC or state authorization, or the firm is relying on a narrow exemption from SEC registration. In practice that means the foreign private adviser exemption, and it is far more restrictive than the firms leaning on it tend to admit.
In Plain Terms
An FCA number tells you what a firm may do in the United Kingdom. It tells you nothing at all about whether that firm may lawfully advise you where you live. If the only answer you are given to the question of how they are permitted to advise you is that they are FCA regulated, you have not been given an answer.
Already have an adviser? Check this one thing.
Not their performance, their permission. We will tell you what to look for and what our own answer is, with no obligation on either side. Fees published in full.
Key Takeaways
- FCA authorization is a UK permission. It carries no weight in the United States and confers no right to advise a person resident there.
- The only realistic route for a UK firm to advise a US resident without SEC registration is the foreign private adviser exemption, defined in section 202(a)(30) of the Investment Advisers Act of 1940. All of its conditions must be met continuously.
- The condition firms fail most often is the marketing one: the adviser must not hold itself out generally to the public in the United States as an investment adviser. A US-facing website, a US brand, US landing pages or US targeted advertising defeats it.
- The exemption is tested at firm level, not client by client. A firm that markets to US residents cannot rely on it for anyone, including a legacy client who moved to the US years earlier and was never solicited.
- Even where the federal exemption holds, state securities law applies separately. The national de minimis standard allows five resident clients in a state before registration can be required, and several states depart from it.
- Advice given outside the permissions of a firm is unlikely to be covered by its professional indemnity insurance, and an advisory contract that violates the Advisers Act can be voided, with fees recoverable.
What the Foreign Private Adviser Exemption Actually Is
Before 2010, a broad private adviser exemption meant a firm with fewer than 15 clients that did not hold itself out to the public could avoid SEC registration entirely. The Dodd-Frank Act removed it with effect from 21 July 2011. What replaced it, for non-US firms, is the much tighter foreign private adviser definition in section 202(a)(30) of the Investment Advisers Act of 1940, relied on through section 203(b)(3), with certain terms defined by SEC Rule 202(a)(30)-1. The SEC adopting release is published here.
A foreign private adviser is an investment adviser that meets all of the following conditions. These are not alternatives. Failing any one of them removes the exemption.
| Condition | What it means in practice |
| 1. No place of business in the United States | No office, and no location at which the firm regularly provides advisory services, solicits, meets with or otherwise communicates with clients. The US home address of a client is not a place of business, but a US address on a website, a US office arrangement or a resident representative can be. |
| 2. Fewer than 15 clients and investors in the United States, in total | Fewer than 15 means a maximum of 14. It is a firm-wide total across all US clients and all US investors. It is not per adviser and not per office. It is also not ongoing. It accumulates. It is not 15 ongoing clients. |
| 3. Aggregate assets under management attributable to US clients and investors of less than 25 million US dollars | Modest by cross-border pension standards. A handful of consolidated UK pension transfers can carry a firm past this figure. The threshold is aggregate, so one large case can end the exemption for the whole book. |
| 4. Does not hold itself out generally to the public in the United States as an investment adviser | A marketing test, not an advice test. The exemption also requires that the firm does not act as adviser to a registered investment company or a business development company. |
Table: the conditions of the foreign private adviser exemption, as defined in section 202(a)(30) and Rule 202(a)(30)-1.
Two features of this test are routinely missed. First, these are continuing conditions, not entry conditions. A firm inside the limits in January can be outside them in June and will not have been told. Second, the exemption is self-assessed. Nobody grants it and often nobody checks it until something goes wrong.
Condition Four Is the One That Catches Firms Out
Holding itself out generally to the public in the United States as an investment adviser is about marketing. The breach happens before any advice is given, at the point the firm starts advertising. Each of the following is a representation to the US public.
- A public website with pages describing services for US residents, Americans, or US connected people.
- A separate US brand, or a domain carrying a US identifier.
- Content and blogs written specifically for people living in the United States.
- Paid search or social advertising bidding on US search terms or targeted at US geographies.
- Adviser profiles on professional networks positioning the individual as a specialist for US clients.
- Listings in directories under a US or expat facing category.
- A US telephone number, a US mailing address, or booking pages set to US time zones.
This is the crux of the whole issue, and it deserves stating as plainly as possible. The exemption is not a defence a firm reaches for after the fact. It is a description of how the firm genuinely operates. A firm that solicits US residents has already stepped outside it, and no amount of paperwork drafted afterwards puts it back inside.
The Point To Hold On To
Condition four is tested at firm level, not client by client. There is no version of this where a firm relies on the exemption for one client while marketing to everyone else. If the firm holds itself out to the US public, condition four fails, and it fails for every US client on the books, including the client who arrived years before any US marketing existed.
What the Exemption Does Not Do
- It exempts from registration only. The antifraud provisions in section 206 of the Advisers Act apply to any person who is an investment adviser, registered or not, exempt or not.
- It is not exempt reporting adviser status. A foreign private adviser files no Form ADV at all. There is no brochure, no disciplinary disclosure and no public record of fees or conflicts for a prospective client to read.
- It does not displace state securities law, which operates as a separate layer.
- It does not carry any UK consumer protection into the arrangement. It is a US registration relief, nothing more.
That second point has an awkward consequence for consumers. Because a foreign private adviser files nothing, an absence of results when you search the public adviser database maintained by the SEC proves nothing either way. It is consistent with a valid exemption and equally consistent with an unregistered firm operating unlawfully. The only way to tell them apart is to ask the firm to name its exemption and then test it against the conditions above.
What the Exemption Does Not Do
- It exempts from registration only. The antifraud provisions in section 206 of the Advisers Act apply to any person who is an investment adviser, registered or not, exempt or not.
- It is not exempt reporting adviser status. A foreign private adviser files no Form ADV at all. There is no brochure, no disciplinary disclosure and no public record of fees or conflicts for a prospective client to read.
- It does not displace state securities law, which operates as a separate layer.
- It does not carry any UK consumer protection into the arrangement. It is a US registration relief, nothing more.
That second point has an awkward consequence for consumers. Because a foreign private adviser files nothing, an absence of results when you search the public adviser database maintained by the SEC proves nothing either way. It is consistent with a valid exemption and equally consistent with an unregistered firm operating unlawfully. The only way to tell them apart is to ask the firm to name its exemption and then test it against the conditions above.
Where the Exemption Genuinely Applies
It is important to be fair here, because the argument is not that every UK firm with a US resident client is acting unlawfully. The exemption exists for a reason, and there are two situations where it does the job it was designed to do.
The client who moves
A UK resident client of many years accepts a role in Boston. The advice relationship pre-dates the move by a decade. The firm did not solicit anyone in the United States and does not market there. Retaining that client, inside the conditions and with the state position checked, can be entirely proper.
The unsolicited approach
A US resident finds the firm through an accountant, a solicitor, a colleague or a family member who is already a client. The firm did nothing to bring them in. Again, the exemption can be available.
In both cases the honest position for the firm is that it is operating at the edge of a narrow relief, that it needs to count, and that at some point it either registers or stops taking on US residents. Firms that treat the exemption as a permanent business model rather than a temporary accommodation have misunderstood it.
Retaining a Client Is Not the Same as Being Able to Advise Them
There is a separate question here, and it gets asked far too rarely. Set aside whether the firm may lawfully keep the client. Is it competent to advise them, and is it earning the fee it is charging?
A person resident in the United States holding UK pension assets does not have a UK financial plan with an American postcode. They have a genuinely cross-border plan, and the technical surface is large.
- Article 17 of the UK and US double taxation agreement, and how it does and does not apply to a UK pension in payment.
- Whether the UK 25 percent pension commencement lump sum is treated as tax free in the United States, and the different answer some states give. California in particular does not conform to federal treaty treatment.
- US reporting on the pension and any other holdings: FBAR, FATCA, Form 8938, and Form 3520 where a non-UK scheme is involved.
- PFIC exposure on any holdings sitting outside the pension wrapper, such as a general investment account.
- Existing 401(k) and IRA assets, which a firm without SEC authorization cannot advise on at all.
- State income tax, which is a separate system with its own treatment of retirement income and its own residency rules.
- The investable universe itself. An adviser without SEC authorization cannot advise on or manage US securities, which narrows the options materially and often means the investment function is outsourced to a third party at an additional layer of cost that is not always clearly disclosed.
An adviser who cannot address these things is not delivering cross-border financial planning. They are delivering UK pension administration to somebody who happens to live abroad, while charging an ongoing advice fee for a service the client cannot actually receive. That is a value question rather than a legal one, but it deserves an honest answer from any firm charging for it, and it is a fair question to put directly.
Where the Exemption Is Being Misused
The structure described below is drawn from patterns observable in publicly accessible information. It is set out to illustrate a type of arrangement rather than to make allegations about any identified firm.
A firm builds a US-facing operation. There is a US brand, sometimes on a separate domain carrying a US identifier in the name. There are pages written for Americans and for US connected people, blog content on UK pensions for US residents, advertising bidding on US search terms, and advisers describing themselves publicly as specialists for US clients. On any reading, this is a marketing operation directed at US residents.
Then the prospective client engages, and the paperwork tells a different story. The engagement letter, the terms of business, the suitability report and the adviser charging agreement all name a UK entity authorized by the FCA. The US-facing brand holds no regulatory permission of its own, or where a US permission does exist somewhere in the group, the entity holding it is not the entity contracting with the client. The client is told they are receiving FCA regulated advice and reasonably understands this to be a form of protection.
The problem is not subtle. The marketing has already defeated condition four. By holding itself out generally to the public in the United States as an investment adviser, the firm removed its own ability to rely on the only exemption realistically available to it. What is left is an unregistered adviser advising US residents, with the advice papered through an entity whose authorization is irrelevant to the jurisdiction of the client.
Note what this does to the innocent cases in the same book. A firm of this kind may well also hold a handful of clients who genuinely moved to the United States years ago and were never solicited. It cannot rely on the exemption for them either. Condition four is tested at firm level, so the marketing contaminates the entire client book, including the relationships that would have been perfectly lawful on their own.
Reverse Solicitation Is Not A Way Out
The argument that the client approached the firm first only works where the client genuinely did so, unprompted. It cannot apply where the firm has published material aimed at US residents. Once a firm advertises to a market, it has solicited that market, and the argument is gone for everyone who arrives afterwards.
A Note From Jonathan Laws
Why This Matters to You, Not Just to the Regulator
It is tempting to file all of this under the compliance problem of somebody else. It is not. Four consequences land on the client.
Professional indemnity insurance
Professional indemnity policies are written around the regulatory permissions of a firm and, very often, a defined territorial scope. Cover is expressed by reference to the regulated activities the firm is authorized to carry on. Advice given in circumstances where the firm had no permission to give it sits outside that description, and insurers are not shy about declining on exactly this basis.
Clients consistently underestimate what this means. A negligence claim against a solvent firm with valid cover is a claim that gets paid. The same claim against a firm whose insurer has declined on jurisdictional grounds is a claim against the balance sheet of that firm, which for a small advisory business is frequently not there. The regulatory breach and the loss of your remedy are the same event.
You may be able to void the advisory contract
Section 215(b) of the Advisers Act provides that a contract is void, as regards the rights of the violator, where its formation or performance would violate the Act. In Transamerica Mortgage Advisors v Lewis, 444 US 11 (1979), the Supreme Court held that section 215 carries a limited private remedy: when Congress declared certain contracts void it intended the customary legal incidents of voidness to follow, including a suit for rescission, an injunction against continued operation of the contract, and restitution. The Court declined to imply a private damages action under section 206. The opinion is available here.
For a US resident who has been advised and charged by an unregistered adviser, that is a real and specific remedy, and it does not depend on the SEC taking any action at all. It also works in reverse for the firm: fees collected under a contract that violates the Act are exposed, which is a material and usually undisclosed liability sitting inside these arrangements.
UK redress is not the backstop you have been led to believe
This point is routinely misrepresented in comparison conversations, in both directions, so it is worth being precise rather than sweeping. Neither the Financial Ombudsman Service nor the Financial Services Compensation Scheme applies a residency test to the complainant. Their reach turns on whether the activity was carried on from an establishment in the United Kingdom by an authorized firm, not on where the client happens to live. Living in the United States does not, by itself, put you outside them.
The difficulty arises once the lawfulness of the activity itself is in question.
- For regulatory purposes, where advice is given is generally determined by where the client was at the time it was given. A firm that advised a US resident from a UK desk may find the characterization of its own activity contested, and that is a question you end up arguing at the worst possible moment.
- The compensation scheme only pays where the firm is in default, which in practice means it has failed. It cannot be used against a trading firm, and investment claims are capped, currently at 85,000 pounds per eligible person per firm. If a UK pension has been transferred and invested, that cap can be a fraction of the loss.
- Neither body can cure a breach of US law. Rescission under the Advisers Act, a state securities complaint and a referral to the SEC are separate processes with separate outcomes, and they run against a firm that may have no US presence and no US assets to enforce against.
- The position of the firm is itself unstable. UK firms are expected to satisfy themselves that they can lawfully carry on business in the jurisdictions they deal into, and to be open with the FCA about matters it would reasonably expect notice of. A firm that has been advising US residents without US permissions has an unattractive set of choices ahead of it, and none of them improves your position as its client.
The honest summary is this. You may have a route to UK redress, but you would be litigating your entitlement to it rather than simply using it, and in a serious case the realistic ceiling is a capped payment from a scheme that only opens once the firm is already gone. That is a materially worse position than being advised by a firm authorized where you live.
The products and platforms can fail too
There is a knock-on effect that shows up in the portfolio rather than the paperwork. Platforms, SIPP operators and fund providers have become considerably more alert to non-UK resident exposure, and several have withdrawn from the US connected market or now insist on evidence of appropriate authorization before accepting business. We have documented several: Interactive Investor, Vanguard, Bestinvest and Standard Life. An arrangement that depended on a provider not asking the question tends to unravel when the provider starts asking it, and the client is the one left holding an account that has to be moved.
Questions to Ask Any Adviser Who Says They Are FCA Regulated
These are deliberately specific. A firm operating properly can answer all eight in a single email, without qualification.
- Which legal entity will sign my engagement letter, and what regulatory permission does that entity hold in the United States?
- If you are not SEC authorized, which exemption are you relying on? Please name it.
- If it is the foreign private adviser exemption: how many US clients and US investors does the firm have in total right now, and what is your aggregate assets under management attributable to them?
- Do you market your services to US residents in any form, including website pages, blog content, advertising, directory listings or adviser profiles on professional networks? If so, how do you reconcile that with the exemption?
- I live in a particular state. How many of your clients live in that state, and have you made any filing or notice filing there?
- Does your professional indemnity insurance cover advice to a client resident in the United States, and will you show me the territorial limits and permissions wording in the policy?
- Can you advise on and manage US securities, my 401(k) and my IRA? If not, who does, what do they charge, and is that cost disclosed separately?
- If something goes wrong, exactly which complaint and compensation route applies to me, and against which entity?
A firm that answers by repeating its FCA reference number has answered none of them. That in itself is the most useful piece of information you will get.
How Cameron James USA Is Structured
Cameron James advisers hold individual SEC authorization in their own right. That is the permission that matters for a client resident in the United States, and it is why we can advise on and manage US securities directly, including US listed ETFs, rather than outsourcing the investment function to a third party and adding a layer of cost to the client. Cameron James is not itself SEC registered as a firm, and we say so rather than leaving it to be inferred.
We are also explicit about who is advising you. Before you engage us, you will know which entity is responsible for your advice, what it is authorized to do, and how it is insured. We do not use umbrella marketing that implies one regulatory framework while the advice is delivered under another.
We do not charge an initial advice fee on US connected investments or US pensions. Our ongoing advice fee and the underlying platform and fund costs apply, and both are published on our website. There is no initial charge for the work of getting your arrangements set up correctly in the first place.
Arrange a consultation with a US authorized adviser
If you hold UK pensions or UK investments and you want a clear answer on how any adviser is permitted to act for you, we will tell you what we can and cannot do, and what it costs. No initial advice fee on US connected investments or US pensions.
Frequently Asked Questions
Is it illegal for an FCA regulated firm to advise a US resident?
Not automatically. What is unlawful is acting as an investment adviser to a person resident in the United States without SEC registration, unless a valid exemption applies. The realistic exemption for a UK firm is the foreign private adviser exemption, and a firm genuinely inside all of its conditions can act lawfully. A firm that markets its services to US residents is not inside them, because that marketing defeats the fourth condition on its own.
What is the foreign private adviser exemption in plain English?
It is a narrow relief from SEC registration for a non-US firm that has no place of business in the United States, has fewer than fifteen US clients and investors in total, has less than 25 million US dollars of assets under management attributable to them, and does not advertise itself as an investment adviser to the US public. All of them have to be true, continuously. It is self-assessed, so nobody grants it and nobody checks it until there is a problem.
I was already a client before I moved to the United States. Does the exemption cover me?
It can, but it is not a grandfathering rule. From the day you become US resident you count toward the limit of fourteen, and your assets count toward the 25 million US dollars. More importantly, if the firm markets to US residents in any form, the exemption is unavailable for you as well, even though you were never solicited. The fourth condition is tested at firm level, not on your relationship in isolation.
My adviser says they are FCA regulated and mentions the FSCS. Is that reassurance worth anything?
It is worth less than it sounds. Neither the Financial Ombudsman Service nor the Financial Services Compensation Scheme applies a residency test, so living abroad does not automatically exclude you. But the compensation scheme only pays once a firm has failed, investment claims are capped, and neither body can put right a breach of US law. If the advice was given without the permission required where you live, you would be arguing about your entitlement to redress rather than simply using it, and the professional indemnity insurer of the firm may have declined cover for the same reason.
Can an adviser without SEC authorization manage my 401(k) or IRA?
No. Advising on and managing US securities requires SEC authorization. In practice a firm without it either leaves your US retirement accounts out of the plan entirely, which means the plan is not a plan, or outsources the investment function to a third party, which adds a further layer of fees that is not always clearly disclosed. Either way you are paying an ongoing advice fee for a service that cannot cover a large part of your wealth.
Does reverse solicitation help a firm that markets to US residents?
No. Reverse solicitation depends on the client approaching the firm genuinely unprompted. Once a firm has published material aimed at US residents, or advertised into the United States, it has solicited that market and the argument is unavailable for anyone who arrives afterwards. It is also an argument that has to be established on the facts, which is a difficult position from which to start a dispute.
Does anyone actually enforce this?
The enforcement record of the SEC includes actions against unregistered advisers, and state securities regulators bring their own proceedings. Product and platform providers have also become significantly more willing to report arrangements they consider non-compliant, and several have withdrawn from the US connected market altogether. But your position does not depend on a regulator acting. Section 215(b) of the Advisers Act gives you a private route to have an advisory contract declared void and to seek restitution of fees paid, whatever the regulators choose to do.
How do I check whether an adviser is SEC authorized?
Search the Investment Adviser Public Disclosure database maintained by the SEC. Be aware of one trap: a firm relying on the foreign private adviser exemption files nothing at all, so finding no record is consistent both with a valid exemption and with an unregistered firm operating unlawfully. The database alone cannot distinguish them. Ask the firm to name the exemption it relies on, test it against the conditions, and ask which legal entity will actually be signing your engagement letter.
Related Articles
These are existing Cameron James USA articles covering the questions a reader doing this kind of due diligence usually asks next.
UK Expat Retirement Planning in the US: A Cross-Border Guide
How a UK pension, US accounts and State Pension entitlement fit together for someone living in the United States.
UK Pension and SIPP Transfer for US Residents
The transfer pillar. Options, US taxation of UK pension income, adviser regulation, costs and the full process.
Interactive Investor SIPP Closing for US Residents: Deadlines, Transfer Options and Next Steps
What happens when a platform decides the compliance burden of US-resident clients is no longer worth carrying.
Vanguard UK Closed Your Account Because You Live in the US? Here Is What to Do
Why Vanguard treats US persons differently from other overseas clients, and the US securities law behind it.
Bestinvest Closing US Resident Accounts: What to Do With Your UK Pension
Another live example of a UK platform withdrawing from the US connected market.
The IFGL SIPP Review 2026
How we assess whether a scheme is the right home for a US-connected client, and what the costs actually are.
Disclaimer: Some of the content of this communication was provided by third parties of Cameron James USA. We have not verified the information contained herein, but we believe the content is reliable. None of this content should be construed as legal, accounting or tax advice. Many legal issues, accounting or tax regulations are complex and often have highly-individualized requirements, you should seek the advice of a competent professional if you have specific questions.
Jonathan Laws, ACA Ch.FCSI
Senior Independent Financial Adviser, Cameron James
“I want to be careful about the tone of this, because it would be easy to read it as an attack on other firms and that is not what it is. Plenty of UK advisers hold a US resident client entirely properly, because the client moved, nobody solicited anybody, and the firm has counted its numbers and checked the state position. That is what the exemption is for. The problem is the firm that has built a whole marketing operation aimed at Americans and then papers the advice through a UK entity, because that firm has quietly removed the only relief it had.
What I would say to a prospective client is simpler than any of the law above. Ask which entity signs your engagement letter and what that entity is permitted to do where you live. It is one question, it takes a firm thirty seconds to answer if the answer is good, and the quality of the reply tells you almost everything you need to know.”