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What to Look for in a Self-Directed IRA Custodian | Prep for Your Future

What to Look for in a Self-Directed IRA Custodian | Prep for Your Future


What to Look for in a Self-Directed IRA Custodian

Preparing funds for retirement can be a daunting task. With all the investment options and pitfalls, setting up an IRA could be frustrating. Account holders don’t have to dive into a retirement plan alone. The IRS mandated that to open an IRA, account holders must contact a trustee or custodian to hold their assets.

While the Self-Directed IRA (SDIRA) accounts are “self-directed” by account holders, the right custodian should be able to help you handle your assets and set up your self-directed IRA in an efficient and effective manner. So, what should you look for in a SDIRA custodian?

Prep for Your Future: What to Look for in a Self-Directed IRA Custodian

Certifications and Administration

When setting up an SDIRA, the IRS requires a certified trustee or custodian who will oversee the wide array of alternative assets permitted. It’s imperative that your custodian is licensed and regulated by the IRS. This certification is what separates custodians from self-directed IRA administrators.

SDIRA administrators can offer clients services, but they are limited without the proper certifications. While the administers handle marketing, selling, and data entry, they cannot hold titles to assets, investments, or properties. They also cannot issue any funds. A trusted SDIRA custodian has the authority and the proper certification to handle the alternative assets. When choosing a custodian or trust, be sure they have the proper permits.

The Right Experience and Specialization

When seeking the right self-directed IRA custodian, experience plays a major part. Custodians with long-term experience have a lot to offer. Account holders can research former and current customers to investigate a custodian’s practice. A trust that comes in high regard from the community and customers is a good place to start.

Also, the company should be recognized as a leader in the self-directed IRA industry with principles that align with yours. Is the firm the proper size with the right credentials? With an ever-changing world, it’s imperative to choose a company that has ongoing education with proof of their studies.

With more complicated alternative assets, it’s important to reach out to the right custodian to handle your investments. Specialty investments like private placement, real estate, or other alternative investments allowed by SDIRAs require a level of experience. Whichever assets fit your long-term retirement plan, it’s vital to choose the right custodian for the job. You should feel secure in your company’s education and qualifications.

The Importance of Service & Service Value

An experienced self-directed IRA custodian not only takes care of the assets, but also the account holders. SDIRAs give you the freedom to invest on your own terms, but there could be complications without thorough research and a helpful custodian. How a trust treats its account holders should be just as important as the assets they carry. The process could be time consuming, so you should choose a responsive custodial team that is ready and willing to help you set up your account and funding.

Does the firm provide helpful tools, education, and training for potential investors? The trust should take professional accountability for their charges, including upholding quality standards and best practices. They should be knowledgeable and available for any questions account holders may have.

Online Safety and Cyber Security

Data breaches and identity theft are major concerns for your investments. In an age that has us guarding our personal and financial information from unknown criminals, what steps will your custodian take to be sure your assets are protected? The right custodian will monitor investments for any suspicious activity and be vigilant in using the best software technology available to protect against a breach. Trusts should be trained to react to a cyber-attack and be on the lookout for fraudulent activity to be sure your investments are safe.

Better Business Bureau Rating and Specialties

Self-directed custodians are mandated by the IRS to be certified to practice and hold assets for their clients. While the IRS determines whether they can perform such a task, the Better Business Bureau rates a company by how well they do it. A BBB accreditation shows that a custodian has reached exceptional standards in advertising honestly, customer care, and best practices. With an official credit, you can be sure that the company handling your investments is up to standard.

The Custodian Right for You

The right custodian for your self-directed IRA should meet your personal standards above all else. A specialized asset protector with knowledge of the field and an accredited business is the ideal choice for handling your individual retirement account.

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