By Steve Garmhausen

Straddling multiple worlds, Robert Levitt is a most unusual financial advisor. An American citizen, he's a fluent French speaker who lives on the French Riviera catering to an American expatriate clientele -- while at the same time pursuing a doctorate in French medieval history. Investing and studying history aren't so different, he says. "One is studying what's going to happen in the future, and one is studying what happened in the past," says Levitt, whose seven-person firm serves Americans living throughout Europe. "It's the same skills; you need to be able to ask the right questions."

Speaking with Barron's Advisor, the 35-year industry veteran shares the challenges of starting his current firm in 2022 and explains why he sees an "enormous" opportunity that could lead to $1 billion of assets under management within five years. He also shares advice for those who want to carve out their own path in the industry.

How did you start in the industry? I started in 1986, working with IDS American Express. In 1990 I joined with a couple of others, in a firm that was eventually called Evensky, Katz, Brown & Levitt. I was located in Boca Raton, and they were located in Miami. We had an agreement that said I could take my clients but would have to pay my partners half the revenues for a period of time if I did. In 1998 my client base was growing large enough that if I didn't leave I would never be able to.

So I started my own firm, and eventually I started to get into more global investing, and we created some hedge funds. It was a great time with globalization, and we were buying individual stocks throughout the world. By 2007 we were starting to get a lot of clients from South America. They didn't want to be affiliated with a U.S. advisor. So we formed a firm called Levitt Capital Management Europe, and we were headquartered in Paris, using custodians in Switzerland.

In 2014 you actually closed the firm during a contentious divorce and gave clients their money back. And your life took an interesting turn. Can you describe that period? The divorce was a huge distraction, and I wasn't going to be able to properly manage client accounts if I was focused on something else. We had assets of over $500 million. But there was nothing I could have done in that situation. So I stopped, and I just focused on learning French. Everybody in the class I was taking was studying to take the exam for university, so I decided I would take the exam. I passed it, and then I went on to university. I got an undergraduate degree from a university in Nice, and I got a master's degree and am working on a doctorate, both in French medieval history, from the Université de Lyon.

What a big departure from the investment world! Yes, a little bit. But they are somewhat the same. One is studying what's going to happen in the future, and one is studying what happened in the past. It's the same skills; you need to be able to ask the right questions.

How did you get back into the business? In 2014 the whole world changed for Americans who were living overseas. It was the year U.S. lawmakers passed Fatca, which required all foreign financial institutions to report on Americans that were in their institution. If you were a bank or a brokerage or insurance company, or a mutual fund company or ETF, if you had American clients, you now had to report to the IRS.

It took a few years for this to go into effect, but the net result was that people could no longer ignore their taxes. The initial reaction of the bankers was just to get rid of the Americans, because it was too complicated. European law also changed, because the European Union created something called MiFID II [Markets in Financial Instruments Directive], which prohibits European residents, including Americans, from accessing U.S. ETFs and makes it difficult to acquire U.S. mutual funds.

So the Americans now caught in these crosshairs had no idea what to do. Their banks were basically throwing them out. Brokerage firms began to worry about the potential for litigation, and they started throwing anybody who didn't live in America out. Wells Fargo closed all the accounts of foreigners. So did Merrill Lynch. Fidelity, Schwab, Vanguard, realized that if they were going to continue to have foreign accounts, they would have to be regulated and registered, and they didn't have enough clients overseas to make it worthwhile. So here you are as this American, and you have no idea what to do. Who's going to take your IRA?

So you smelled opportunity. The opportunity was just enormous. In France alone, we have 300,000 Americans, and you have hundreds of thousands throughout other countries: Germany, Italy, Spain, Portugal. All these countries were in the same situation. So I decided I wanted to get in the business of serving U.S. citizens living in Europe. There was almost nobody doing it at the time. I spoke to a couple of British firms that had been covering Americans, but they too were no longer able to do it because Brexit had taken them out of Europe; therefore they were no longer regulated in Europe.

But the only way you could manage taxable portfolios for Americans, in a way that conformed with the law, was through individual securities, which is something I had a lot of experience with. But very few advisors had any idea how to develop individual portfolios. The banks in France, for example, had no interest. They didn't know how to do it. They didn't differentiate between short-term and long-term capital gains. So I had to take the equivalent of a Series 7 exam -- in French -- and figure out how the regulations worked here.

In 2022 I was able to get myself named the vice chair of tax policy for Americans abroad with Democrats Abroad (the arm of the Democratic Party for U.S. citizens living outside the country). That allowed me to get access to all the information and rationale behind all of these laws, what they were designed to do, what they were designed not to do, and I was also able to help influence some of the decisions that were being made going forward, whether it was at the Treasury or the IRS or the State Department. And even if I wasn't able to make a difference, I was able to understand how we could get around these rules in ways that would make sense for U.S. citizens living in Europe.

Still, it took about two years before we could get a custodian, because we had to find one that was licensed in Europe, also licensed in the United States, and could provide the 1099s and all the other tax reporting information you had to have.

Today you serve about 250 clients from eight European countries from your offices in Nice. What are your assets under management currently? It's a little bit hard to compare it because we work on a nondiscretionary basis, which means we have to do the transactions together with the clients. But in the two years, we've raised about $100 million. And we do a lot of fee-based work as well. So for example if you want to interview me, like to hire me, you're going to pay 420 euros for that interview. But just to give you a sense of the demand, we have something like four prospects a day. Can you imagine?

How fast do you think you can grow AUM? I think we can get to a billion in five years.

You have six employees. Are they French people? American expats like yourself? I have no other Americans, except for one who is based in Boston and works mostly on portfolio administration and things of that sort. I would love to hire Americans, but the problem is there are not that many here who have financial backgrounds.

I'd imagine hiring is tricky, in part because your employees in France have to be bilingual. Yes, it's very tricky, in part because of cultural differences. We hired a woman from Hungary who was very bright. But Eastern Europeans, and this is a generalization, tend to be a little more abrupt. In France we would say, "Bonjour monsieur." But Americans want to hear, "Hey Joe." We have this familiarity: We feel comfortable working with people that are friends. We don't feel comfortable with the distance that you often find in France. So hiring people who can communicate well with our clients was one of the lessons I learned. Now, whenever I meet with a lawyer or other professional who I want to introduce to my clients, I really have to train them how to talk to an American.

Do you help them with their taxes as well? We don't do the tax preparation, but we find them the tax advisor that does both French and U.S. taxes.

You have been involved in creating legislation pertaining to taxation of expatriates. Can you explain? For many years, Americans abroad have wanted to change the way they're taxed, because the United States is the only country that taxes you based on your citizenship. Every country in the world except the U.S. taxes you on your residency. So if I'm a U.S. citizen, I have to pay taxes to the U.S. on my worldwide income, and I also have to pay taxes, for example, in France on my worldwide income.

So President Trump made an announcement maybe a month before the election, saying that he wanted to end double taxation on Americans abroad. And we have been working on a bill, which I actually initiated, called the Residence-Based Taxation for Americans Abroad Act; it was introduced in the last session by Congressman Ray LaHood, and he's going to be reintroducing it. We expect it to be part of the tax bill that's coming up. And this potentially will change the entire dynamics for taxation for Americans abroad.

It seems like you're living the expat dream, living in France, speaking the language, and immersing yourself in the history. It sounds glamorous. Is it? Yes, I wouldn't change. I now speak about eight languages, but yeah, of course. I mean, I live in the south of France, between the French Alps and the Mediterranean Sea.

What's your advice for those who want to carve out their own path in the industry as you have? Think about the opportunities outside the U.S. The need for quality advice is like a stampede. Tomorrow night I will be speaking at a webinar for U.S. and dual citizens who live overseas. More than 1,000 people have paid to watch this webinar.

Merci, Robert.

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February 21, 2025 12:23 ET (17:23 GMT)

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