On this week's episode of the Financial Planning Podcast, Robert Levitt talks about what it's like to bring American-style financial planning to the shores of the Mediterranean sea.
Levitt, founder of
After moving his life and his firm from Boca Raton, Florida, to France amid the 2008 financial crisis, Levitt actually closed up shop in the mid-2010s.
But as he continued to live his life abroad, he realized that expatriates and Americans with dual citizenship living in Europe were badly in need of sound financial advice. He also saw it as a great opportunity to tap into a potential client base of 250,000 U.S. citizens living in France by exclusively serving them.
During his conversation with FP Podcast host and lead editorial producer Justin L. Mack, Levitt talks about trading Florida for the French Riviera; the unique financial challenges of U.S. expats living in Europe; and how temporarily leaving the business reignited his passion for planning.
Listen to the new episode — as well as to all future and past episodes — by subscribing to the FP Podcast on
Transcript:
Justin L.Mack (00:03):
Good morning, good afternoon, and good evening. Welcome to the Financial Planning Podcast. I'm your host Justin L. Mack, wealthtech reporter with Financial Planning. And it is my pleasure to introduce this week's guest, Robert Levitt, founder of Levitt Capital Management. Robert, thank you so much for joining us this week on the Financial Planning Podcast.
Robert Levitt (00:20):
Thanks for having me, Justin. This will be fun.
Justin L.Mack (00:22):
Awesome. And Robert not only brings three decades of industry experience as an advisor and firm leader to the FP pod, he also marks a milestone as our first guest checking in from across the pond. That's because his business, Levitt Capital Management, operates out of niche France and specifically serves U.S. citizens living in Europe. The firm is dedicated to investment management and helping U.S. citizens or green card holders navigate the complexities of dual tax regimes as well as dual regulatory regimes, which are often at odds. And Robert says his firm is likely the only of its kind doing its thing in France, but as an American himself, his firm actually started in Boca Raton, Florida and grew to more than $550 million in assets under management. We'll talk about what motivated him to make the move abroad more than 15 years ago, the changes he's experienced on his journey, the one-of-a-kind experience of running a niche firm overseas and more. But Robert, let's wind back the clock and take it from the top. Shall we talk about the beginning? You've had a very interesting journey, just in a quick description of the work you're doing now, how it's gone from Florida to France. Can't wait to dig into that. But step one, what got you into this business in the first place? What brought you to financial services and is it something you always wanted to do?
Robert Levitt (01:35):
I always wanted to do international, international something. I got a degree in international management, moved to DC and in DC I got my start in the investment advisory business, 1986, actually got my series seven license, went to work for I DS Financial Services, which was the subsidiary of American Express. And I learned about sales, I learned a little bit about investing. That was the time when mutual funds had loads on them. That was before sort of the world of, it was really the beginning of what we had defined contribution plans, right, where the individuals were going to manage their own money. And it was still a time when stock brokers were buying individual stocks. And so this is how I started. I started with I D s, I moved to Florida in 1990. I joined a firm at that time, which was called Vinky Brown and Kaz, which eventually became Vinky Brown Katz in Levitt.
(02:21)
And I got a big break in 1996 when I was named to the Worth advisor list of the top 200 advisors. And I stayed on that list for I think nine years. And that was really what really grew the firm initially. And then we took on a tact in Florida where we were buying individual stocks around the world. We had a hedge fund, we were running separate accounts with a 3 million minimum. It was a niche really, because there were very few firms that were focused on buying stocks around the world. And of course that was the time when the U.S. was not doing as well. Globalization was in full force. And so our objective was to learn how the world was working with globalization and investing in it. So it's been a niche for me that was very, very successful. But come 2008 became much more difficult because all of a sudden it was much more focused on whether the Fed was putting money or not putting in money.
(03:20)
And the world of globalization started to go into reverse. So we were shifting gears at that time and we opened an office in Paris in 2007 because we started to get a lot of demand from clients that were not U.S. citizens, and so primarily South American and we wanted to take those clients. And so in 2007, we opened a firm in France, we served them out of Switzerland. Didn't last long because in 2008 was when the blow up of Switzerland came with the U B S and the Credit Suisse and many others with the U.S. citizens, not the clients we had, which were not U.S. citizens, but U.S. citizens were hiding money in those tax havens. And so we closed the firm a little over a year later because our custodians and nobody wanted to deal with any firm that had anything to do with America.
(04:10)
So long story short, I spent some time here in France, I stayed, we continued the firm until about 2014. I was living in France, I was living in Malaysia, I was living in Indonesia, still focused on the global side. But in 2014, I decided to close the firm, spent some years not researching the future, but researching the past. I took a degree in patrimony, which is the study of history of a region and local languages. And I fell down, but at a certain point it was great. I mean, I got a French undergraduate degree, two French masters, and a doctorate. But there was a certain point when I realized that U.S. citizens were becoming very, very difficult for them to invest, particularly in France because you had these issues of FATCA and you had all kinds of banks in the United States that were now shutting, throwing the Americans out.
(05:07)
Same thing with brokerage firms. They could no longer have American clients. And so everything was getting very, very difficult for U.S. citizens and their boom niche, perfect opportunity because you have an industry that's not being served by almost anybody. It got worse actually because there were some British firms operating in Europe, but with Brexit, they were forced to leave because they no longer had the regulatory approval. So when we talk about niches, I was looking at a huge client base potential, hundreds of thousands of people in France, and they had no place to get advice. And you could see it in the chat rooms or in Facebook chats, things like this. Nobody knew even how to open an account or what to do, what they could do, what they couldn't do. So it seemed like a great opportunity to open a new firm, a European based firm, and to serve this completely unserved clientele.
Justin L.Mack (05:59):
Absolutely. And again, this clientele you're serving now, and like you mentioned, it's an interesting journey because you were, you'd closed your firm, you were technically not in the business when you realized this is a need and it's more so stepping up to fulfill that need. You see that opportunity. But I imagine there's also a lot of your own firsthand experience as being someone who has been at this point, living and working in France for many, many years in many different ways in an advisory capacity, getting all your different educational pursuits, which I think is really incredible to go from that. Okay, now I'm going to pursue medieval history. That's really, really cool. So how much of yourself or your own story or your own experience are you able to weave into the work you're doing now? Because I imagine when you sat around and saw the landscape, you thought, you know what? I've been through this, I've done this, I can help. Is that a big driver in what you're doing now?
Robert Levitt (06:47):
Absolutely. Because if I didn't have an understanding of how the American system worked, I wouldn't have been able to create an American type investment advisory firm in France. And the American clientele, they understand an American type like an ria, a registered investment advisor, s E c, registered investment. They understand that model. It doesn't exist in France. You've got to go to the local bank and they're selling you products that turn out to not be products that U.S. citizens can even buy without getting into tax trouble with the IRS. So it was through my own experiences. Plus of course I had to take all the regulatory exams. So in the U.S. we have the series seven exam. Well, in Europe we have a regulatory system too with an exam, but you have to take everything in French. So if I didn't have the background from the U.S., if I didn't have the background in France, it would've been very difficult to create a firm.
(07:36)
But even then, it's like being a pioneer. So one, sometimes we have a custodian here and when we want to open, for example, a SEP ira, well of course American citizens could open a SEP ira, but their firm said no. And the reason why, because it had never been done before. So they had not created the software to allow somebody living in France to do that. So in many cases, I've been the pioneer and I've got lots of arrows in my back because it was working within a system that is not designed. And yet they encourage my participation and building of a firm because they can see that this is a great market, not just for my firm, but for the custodians for other firms to come in. And I think in the future there will be a lot more advisors because there's plenty of room, not just here in France, but in Germany and Italy and Portugal and all those countries have different rules. Everything has to be done differently in each country. So it's not something like somebody could parachute in one day and create a firm. It's not as easy to do things in France as it is to do in the United States. But nonetheless, the opportunities here are the opportunities that we had in the U.S. back in the eighties when people were really desperately looking for advice because it was a new world and they didn't understand it.
Justin L.Mack (08:53):
Absolutely. And something I want to go back to an interesting point. I love the description of it, a lot of arrows in your back and in trying to figure this out and getting this established, because you mentioned having to be a pioneer of sorts at many different junctures in this journey. Cause there was no model to follow. There was no one you could look to as someone else who was doing what you were trying to do and say, teach me how to do this. So I imagine you had to kind of very hands on, very trial and error, probably a lot of mistakes along with the victories. What was that experience like? And were there any moments where you were like, you know what, this is simply too much, I'm just going to add another degree to the growing list. Or were there those moments of victory that made it a lot easier to be like, okay, what's next? What else can I figure out?
Robert Levitt (09:34):
What you learn very quickly is to manage expectations. So when we're opening an account, if I open an account in the U.S., I could open the account, it'd be open, but in France it doesn't work like that. You know, open an account and they reject it. They ask you for more documents. So you learn just to explain to people, look, if we get this done the first time, we're going to be lucky. It's going to take 2, 3, 4 times. And this is the key to being able to set expectations. But what was frustrating is when I would approach a U.S. software provider, for example, there was a firm called Orion, which makes financial advisor software would've been a great fit for me. They worked with the custodian we are working with, but they refused me. They said, Hey, are you registered with the SEC? And I said, no, I'm not an advisor in the U.S., I'm registered with the authorities in Europe. And they said, sorry, we're not going to talk to you. Go away. And this is frustrating because it is very shortsighted on behalf of some of these firms. They just don't seem to understand that they have products that would work very well, but they're refusing. And that part for me was a little bit frustrating to find the service providers that we would be comfortable with. That just refused us
Justin L.Mack (10:36):
For sure. And something else I wanted to ask you too is just the importance of the service you provide and for others to provide such services in other parts of Europe. You already mentioned your presence can be mutually beneficial, not just for your business, but just for having this exist for the US expats that might be living in different parts of Europe and there's a lot to learn. I imagine you've already talked about kind of figuring that out, but why is that so important? The reason I ask too is just because I know personally a lot more Americans who are interested in what I want to live abroad, I want to experience, I want to see that I know people in my own personal circle who are more open than ever before to live somewhere else. And I think it's a byproduct of the pandemic. It's one of those life's too short things. I need to see this, I want to travel, I want to fulfill my international pursuits. The kind of pursuits you mentioned that existed in your, Hey, I wanted to do something international. So there's more Americans who are ready to take that jump and they're going to need someone like you to help 'em out. Just any thoughts on other people doing what you're doing in other parts of the world to make that experience easier or better for Americans?
Robert Levitt (11:39):
There are some firms that do what I do in the uk, but when you come into Europe, it's so bad here, Justin, that people are talking about renouncing their U.S. citizenship just because they can't figure out how they can invest, which they can. Or people are doing things they're not supposed to do. They have accounts in other countries, for example, they have an account in the U.S. using fake addresses, which may be considered by the authorities. Here's tax evasion, probably they're not reporting it. So you can imagine what kind of problems this is. And as banks and countries, different countries are sharing information, eventually these kinds of things will be exposed. But the fundamentals here is living in another country, particularly France, which is so favorable in the tax treatment with us because we have a tax tree that makes it, for particular our retiree.
(12:30)
It's like a nirvana for a tax treaty. And it's such a great experience. We have a situation where you come to another country, you don't have to speak French, you learn it while you're here and you, it's like being in your twenties again when everything's new. When you have these little victories of learning a new word or a new finding, something new discovery, it's everywhere. And so we're seeing a lot of Americans, and particularly in the south of France and nice, we have a lot of Americans. My client base is throughout the country of France, but we have a lot of people coming here because they appreciate the lifestyle and the culture and the learning. And also see that in places like Canada and Mexico and other countries where a lot of Americans are heading. But France is one of the most popular ones today.
Justin L.Mack (13:18):
And with that, we're actually going to take a quick break and enjoy a word from our sponsors, but when we return, we'll have more with Robert Levitt, founder of Levitt Capital Management. Stay locked. We'll be right back after this break.
And welcome back to the Financial Planning Podcast. I'm your host Justin Mack, and we're diving back into our conversation this week with Robert Levitt, founder of Levitt Capital Management. And Robert, in the beginning of this show, we talked about your journey, starting your career and going, taking your firm from Boca Raton to Nice, the transformation, the journey, the lot of learning on the job to get things up and running, but saw a need, stepped up and said, you know what, I'm going to reopen my firm with this focus of helping Americans living in France. So talk to me about some of the biggest differences when working with those advisory clients between working in the U.S. and France. We already talked about the regulatory structure being vastly different. The whole R I A structure, like you said, doesn't exist there, not really what's familiar. What are some of the common challenges or complexities when working over there
Robert Levitt (14:22):
For the client? It's like simple things like the words they're used to, they're to a CPA, being able to focus on their taxes. But here it's not a CPA that does your taxes as a it's, it is what we call a fiscal buca, a financial lawyer. And if you do succession planning, what we call succession planning, estate planning in the U.S., and there you go to an estate planning attorney here, you go to a notary right there, a notary is to sign a document. So you have different names and it's very confusing for people to understand. But also you have different strategies, right? Because you have tax strategies that are different. So there are, because of the tax treaty that we have, sometimes it's better to get taxed in the U.S., sometimes it's better to get taxed in France. And when we get to choose, these are some of the more complicated, more interesting questions that we have to deal with because we can't use the same products.
(15:12)
For example, a mutual fund in the U.S. is designed for a U.S. resident, someone who lives in the us. So somebody in Europe can't buy a U.S. mutual fund. In fact, if you have a small amount of money, you can't even buy a U.S. ETF. Conversely, you can't buy a European mutual fund either because the IRS will tax them and you can't buy a European ETF … basically they're taxed at a very, very high rate because the investments in Europe are more obscure, they're more opaque, and therefore the IRA can't see, they can't control the ira. The IRS can't control what's going on inside of them. So they tend to see them as tax dodges and therefore the strategies are not completely different. You just have to change the names a little bit.
(16:03)
You know, you can still invest in stocks, you can still invest in bonds, you can still do a lot of the things that you would normally do. You can buy indexes with individual components. You can figure out a way to do everything you want to do, but it follows a different path. It looks a little bit differently. And once you get used to it, once you get used to the ideas of how things work here, very quickly adjust and adapt. But it took me a long time to figure out some of these things, how far I could go, what I could do. Because there was no, there's no financial planning publication that comes out once a month that explains these rules. Maybe that's a future for you, Justin, to expand, to cover the European side. There's no newsletters, no any of this to inform you. So I had to learn all of this stuff myself. And now in bringing in new people we, I'm teaching them. So we're expanding the source. But once you have the process down, once it works, then it really works well.
Justin L.Mack (17:01):
Definitely. And then those resources, like you said, those answers being readily available, that's an interesting challenge to overcome because first the need has to be recognized, then someone has to step up who is capable and then create those resources. So until all that work goes into it, you could be waiting for a while for some of those things that can be difficult to be simplified. And again, the role you play, being able to, I imagine, bring people up to speed a lot quicker than you had to figure out on your own is probably extremely valuable to those clients. And something else I'm interested just to get your thoughts on is what's the learning curve for, say you're a client client and you move, you are in America a high earner and you're fairly sophisticated as far as the level of your financial knowledge and your financial literacy. All of a sudden you move and it's swear one you thought you knew I don't know anymore. That would be a little frustrating for me to feel like I've had it figured out and then realize I am back in grade school. How do you help clients navigate what is a very frustrating experience, especially when their money's involved?
Robert Levitt (18:00):
That's exactly right. I mean, because people move to France for example, and they have to file U.S. tax returns, but they don't realize that, right? So even simple basic concepts, they go to open an account at the bank and the bank refuses them because they're a U.S. citizen, or they try to open an account at a brokerage firm and they're offered products that they don't understand. With a French prospectus, I, so it is a little bit challenging in the beginning to try to do it on your own because you have a lot of do-it-yourselfers that were, and think about it, in the 1980s, 1990s, all these mutual fund companies came out to educate you for your 401(k), for your 403(b), for how to invest your money. But in Europe, that never happened. They're still using defined benefits. So people didn't learn how to invest money.
(18:45)
So not only do you have a regulatory system, which is much, much, much stricter, we have to go through all kinds. First thing I have to tell you if you become a client of mine just before I talk to you, is if you have a problem and you want to complain about me, here's where you go. It's the first thing I have to do before I can even begin to talk to you about what we do. So it's different, but what happens is you get a sense of relief because people have all these fears, oh my god, I can't live in France because if I've become a French tax resident, the world will win. But it's just untrue. It's just that they don't know where to go. And as an advisor, I like to work with other American professionals, American accountants, American lawyers, and American immigration people.
(19:24)
And so you have a network of people. So once you enter and you're served by a group of people that know how to handle U.S. citizens that know how to handle U.S. citizens living in France. And so it all becomes easier and easier and easier. And the focus becomes more on enjoying your life than trying to figure out or being under all the stress, am I doing it? Do I have the right people? Et cetera, et cetera. It's also by being an American, I give people that ease that I understand where they're coming from, I understand where they are and I understand how it works. So by being an American in France, I'm able to talk to people in a language that they can understand. Everybody speaks English, but it's not the same English that they speak in the uk, they speak in France, it's a different English. They don't really understand the questions that you have because they don't have the background. Well, this is one of the areas that a firm like mine, I'm not the only one in Europe, but a firm like mine really brings these abilities to give people the comfort, this is possible, we can do this. And now I understand what the differences are
Justin L.Mack (20:28):
For sure. And I I imagine there's probably a level of comfort in being able to ask, again, an American living in France, things that they don't understand, even though it is being said in the English language. Like I said, it might be English, but there might be some different uses of phrase and there might be some confusion, but no one really wants to say, Hey, I don't this, especially if you're speaking my language, a lot of people will just be quiet and move forward with a level of confusion until they can ask someone else, what does this mean be? We've all done it and it's something we shouldn't do. But yeah, it's sometimes embarrassing to say, I don't know what you're talking about. Could you play? Could break it down.
Robert Levitt (21:05):
Yeah, I think it's more Justin. I think that people don't know where to go. They don't know how to find an advisor. And the problem is that a U.S. citizen is always a tax resident of the United States, even if they live in Europe or the rest of the world. Once you move to France, you're only a tax resident in France. So you do things like a French person would do. It doesn't matter about your citizenship, it matters about your residency. So if you talk to someone from the UK and they say, oh yes, of course, and of course they speak English, but this is how I do it. But an American can't do that, right? Because Americans are under a completely different system where the U.S. is always taxed on your worldwide assets in the United States, even if you live in France. So a lot of other issues like tax treaties and things like that.
(21:47)
And if you look at a tax treaty, it's written in a legal lease. It's not so simple, but it's something that once is explained to you, get through it fairly quickly. It's not finding the right people who can explain it to you, and this actually is a big problem, if there's not enough people like me. So our agendas get filled. And if you try to find American lawyers and American accountants, they have lots of clients. So there's a huge demand for professionals out here. And this is one of the great problems for me to have, great for the American citizens. But it is, I mean really it's the niche of all niches. I mean, can you think of a niche that's where everybody needs your services, but they don't find advisors that exist. So this is the situation we have a little bit here in France.
Justin L.Mack (22:41):
Well talk to me, let's move about marketing. How are you finding those Americans in France, those clients that you are looking to serve? Is it hard to get the word out? Is there some kind of, I imagine, mutual professional relationship where you can find other Americans living in France who need these services? What's it like to get the word out? Just because I know no matter where you live abroad, domestically, trying to get your firm's name out there, make an impact, and stand out is very difficult. Competition is everywhere because the boundaries don't matter anymore. You can work with anyone thanks to technology. So how are you getting the word out and finding the clients that you want to serve?
Robert Levitt (23:19):
But Justin, the last point is really not true. You can't work with anybody because if you're working with someone in the U.S., they're not going to understand the rules in France, right? There you go. ISTs in France are not regulated in France. And basically they wouldn't know the difference between what's taxed in France and what's taxed in the U.S. And if you don't know the difference between the two, you don't realize the capital gains on those things that are taxed in France only apply to those things taxed in France. So it's a little bit more complicated. But there is a network of Americans here. We kind of know each other. There are still many dozen or so that I don't know yet that are accountants or they already have a client base. And for the Americans, they talk. I mean, there's a very active group of Americans talk to Americans.
(24:01)
So it's a lot of word of mouth and it's getting more and more open. If people start talking, they start asking, where can I find an advisor? And this is, a lot of people come to us through our website. A lot of people come to us through accountants that are in France that know we can do this kind of thing. And so at a certain point, it's just a referral based business, right? Because you're not going to advertise on television or radio or French radio or French television or even an English language because it's not really going to touch your target market. But on the other hand, there's only so many clients we can have because one big difference between here and the U.S. is in France, we can't really invest money on a discretionary basis. It's a non-discretionary basis, which means we have to inform the client every time we want to make a transaction and they have to physically make that transaction in their account.
(24:52)
So it's far more time consuming on the part of the advisor. I can't just buy a million, a million dollars worth of security in an omnibus account and allocate it to all the clients. That would be much simpler. But it's a much more time consuming process. We constantly have to get approval to do things that we want to do in the client's accounts because they have to show that they have enough experience, et cetera, et cetera, to opt out of various regulatory rules and things like that. But in the end, there's like 50 questions and you have 50 questions, you'll see the same 50 questions again and again and again, and they all can be answered. There's an answer for everything and there's a way to do it. You just have to know how. So the more you do, the more you have contact with other professionals and you just get known as the guy who deals with Americans. And this is the way, at least this is the approach I've taken. But interestingly enough, because we do it the American way, we're getting clients that are not just Americans. We get European clients as well, because they too want a much more American oriented approach to investment management like an RIA, than buying products from the bank that are, who knows what they are.
Justin L.Mack (26:10):
All right, very cool. So bringing that, like you said, American style to nice and really interesting and very cool to hear that just that ability of getting out meeting people, those professional groups is so beneficial because I think that's also probably, I imagine a lot of fun too, just to continue to enrich that experience and to meet more people. And again, help those people kind of create networks by being able to connect them with those folks and vice versa. So very interesting stuff.
Robert Levitt (26:35):
I got a feeling you're looking for your plane ticket now. Hey,
Justin L.Mack (26:38):
Look, I'm always looking for a plane ticket. Don't let my bosses here, but I can do this job from anywhere. I wouldn't mind overlooking somewhere in France, maybe while podcasting, I'll bring my producers with me. It'd be a great time. And as we wrap up here on the financial planning podcast, we're going to transition into something that has become somewhat customary, which is ending with some good vibes. And Robert, we've talked a lot about your career starting knowing that you wanted to do something internationally, starting your firm in Florida, taking it to France, a lot of change along the way, but always working to serve a specific set of clients and having that niche change over time and doing so out of need. So thinking about all of that and all you've done and all you hope to do, what's your favorite part of your job? What do you love most? What keeps you coming back and even wanting to take on something as in depth, and I imagine very time consuming as the work you're doing now. What do you love most?
Robert Levitt (27:30):
Well, of course, it's like probably all of us in this business. We love the investing side, right? Because it's the ultimate challenge. You always have to be every day the news is impacting your life. So it's not like working in a job where it's repetitive. You're doing the same thing year after year. On the financial planning and investment side, not only do you get to work with individuals and people and you get to help people, but you're constantly intellectually challenged on the investment side. And that is so much fun.
Justin L.Mack (27:55):
Very, very cool. And actually it's hard to end with better vibes than that. So love the passion that you bring to your job, and thank you so much for sharing it. Some of that passion with us this week on the Financial Planning Podcast. It's been an absolute pleasure.
Robert Levitt (28:08):
Mine as well. Justin, thank you so much and I look forward to seeing you out here soon.
Justin L.Mack (28:12):
Absolutely. And I want to thank everyone for tuning in to the Financial Planning Podcast this week. This episode was produced by Arizent with audio production by Kevin Parise. Special thanks again to our guest, Robert Levitt, founder of Levitt Capital Management. Rate us, review us and subscribe to all of our content at