FATCA – or Foreign Account Tax Compliance Act – was enacted into law in 2010 and is being rolled out in the next few years (albeit with several delays already). It requires what are deemed foreign financial institutions that may deal with US clients, or have exposure to US markets, to register as US-compliant organizations or pay a 30 per cent withholding tax to the US. The costs of verifying backgrounds of expat Americans, and other details, has encouraged a number of FFIs, such as Deutsche Bank and HSBC, to stop serving such US clients. Hundreds of US citizens have given up their citizenship to avoid future compliance problems.

But Guardian Life Management, part of , a global firm, argues that there is no need for people to panic.

We have seen a marked increase in the number of calls from US clients who have been turned away by others as they don’t want the cost and complexity of complying with FATCA. Although US citizens may have less choice when it comes to who to bank with and who to receive their financial advice from, there are still options that make it plausible for them to live overseas and protect their financial future,” Simon Parfitt, chief executive of Guardian Life Management, said in a statement.

As previously reported, more than a thousand US citizens have surrendered their passports to US embassies around the world so far this year, according to the US Federal Register.

Parfitt believes such measures are drastic.

“We are urging US expats considering handing in their passport to think again. There are other options that allow the mapping out of a financial plan that will both protect and build their wealth for their family’s future,” he said.

Ross Feingold, senior advisor at DC International Advisory, was quoted in the statement as saying: “Negotiations between the US Treasury and regulators throughout the world to enter into FATCA intergovernmental agreements must be monitored too. Under an IGA, US persons' account information can be reported to the US government, and because factors in addition to citizenship determine whether an account is reportable, citizenship status changes will not necessarily cause a financial institution to reclassify an account as non-reportable.”