Choosing a Self-Directed IRA Provider
Though you can open an IRA with nearly all financial institutions, but a few are knowledgeable enough and have regulatory authority. A good custodian can assist you through the challenges of self-directed IRA ownership and shield you from prohibited transactions, scams and other pitfalls.
The following are tips that can lead you to a good self-directed IRA provider:
Types of Providers
Self-directed IRA providers can be any of the three: Administrators, whose task is to manage the required papers for starting IRAs; Facilitators, who generally inform people about self-directed IRAs as well as help structure single member LLCs; or Custodians (these are typically highly regulated banks, credit unions or non-depository banks) that have been granted custodial powers over IRA assets.
Better Business Bureau Accreditation
To get BBB accreditation, a self-directed IRA provider should meet the bureau’s requirements in trust building, truthful advertising, sensitivity to customer concerns, and upholding customer privacy, among other standards. Unaccredited providers may fail to meet these standards.It’s certainly safer to deal with a BBB-approved provider.
Size, Scale and Expertise
A provider with less assets under custody or not to few unique investments considered IRA eligible may be limited in terms of capability.Business size tells you so much regarding a provider’s experience and expertise, and you have to go with one that can accommodate your needs for specific alternative asset investment.
Providers may have certain areas of specialty, like private placements, LLPs, LLCs, exchange-traded assets, and more. Ask your prospective provider to give you details of their experience in holding the specific types of assets you plan for your IRA. Specialists are always updated on all rules and regulations that could impact your self-directed IRA investments.
Smaller, regional providers are typically concentrate on limited geographic locations, meaning so if you’re beyond their strategic scope, some of their services will be unavailable to you.Choose a provider that can service your area – or future area, just in case.
In this generation of data breaches and identity theft, it’s crucial that your provider is serious about keeping your personal and financial information private and secure.They have to be able to tell you in detail the steps they perform to make this possible.
Lastly, the use of qualified IRA funds for investing in alternative assets is generally paperwork-intensive. Having a new provider set up and maintain a self-directed IRA is an intricate and time-consuming process, but not if there is a responsive client service team that can help you.Therefore, pick a prospective provider that will give you exactly this.