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Setting Up Your Retirement Plan: Top 5 Things to Look for in an SDIRA Custodian

self directed ira tips

Setting Up Your Retirement Plan: Top 5 Things to Look for in an SDIRA Custodian

Setting Up Your Retirement Plan

When looking into setting up a retirement plan, there are plenty viable accounts to choose from. If you are interested in taking charge of building your nest egg, or are interested in exploring alternative investment options, consider looking into a self-directed IRA.

SDIRAs grant account holders the freedom to build a solid portfolio by allowing a range of investment options. Of course, should you choose to open an individual retirement fund, a trusted IRA custodian is needed to oversee the account, as per the IRS.

When considering an SDIRA custodian, it’s important to perform your due diligence and select one the will match your retirement vision. As you conduct your search, here are five things you should keep in mind.

#1 – Certified, Approved and Licensed

Owning an IRA requires a custodian. In addition, every custodian must have the proper certifications to assist with an account. This could be a tricky matter, especially when it comes to IRA administrators. Administrators act as the marketing and customer service for some IRA custodians. They bring in the clients but are not authorized to handle any of the account services. Since a certified custodian is required, it’s important to be mindful of who exactly would be handling your transactions.

Another important tool to utilize is the BBB rating. The Better Business Bureau is a great resource for finding legitimate custodians, and they paint a clear picture of the pros and cons of each company. There are many companies authorized by the IRS, but not all of them will be a good fit for your personal vision. Browsing the BBB can help you avoid fraud companies and select the correct firm for you.

self directed ira tips

#2 – Industry Knowledge and Specialization

Another thing to consider in a custodian is how familiar they are with your investment choices. Are you planning to invest in real estate, precious metals, or trust deeds? Or are you interested in diving into a newer market like cryptocurrency? Most SDIRA custodians are passive, since the idea of an individual retirement account is for you be in control of your investments. However, your custodian choice should have thorough knowledge of your asset industries.

Some custodians specialize in an investment, like real estate. If you are considering a niche investment, it may be more difficult to find someone to represent you. It’s likely for the rarer investments, you’ll have to choose a more specialized custodian. Keep in mind your research and the BBB before making any choices; it’s important for a custodian to be well-versed to handle your entire portfolio.

#3 – Custodian Experience and Industry Leadership

A company’s expertise is only trumped by experience. Longevity, workload, and leadership in the industry are pros when selecting a proper firm. When researching a custodian, a key point to look for is how long they have been a company. While age isn’t necessarily a deal breaker, a more established company could prove to be beneficial for investing, especially in a market that is commonly explored, such as private loans, or real estate. If you are considering investing in newer assets, it may be more difficult to find a properly experienced custodian.

The longer a company has been in business, the more likely there will be reviews. Additionally, consider the types of advertising and whether their name is well-recognized in the industry. Experience is invaluable when it comes to investing in your future,

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#4 – Quality IRA Custodian Customer Service

Quality service is always appreciated in any industry. Your custodian selection should be eager to handle your account and make sure your needs are met. As you interact with different custodians, they should be a match for ideals, expectations, and lifestyle. A good way to measure the quality of a custodian is how they treat others in their care, like their staff or other clients. Poor treatment of employees should raise a red flag, especially if it means inadequate training and protocol. These custodians will be holding onto your assets; if they do not place priority on proper training, it does not bode well for your asset protection.

Consider your availability, what assets you are interested in, and how much hands-on treatment you would like with your account. Quality customer service is always a plus, especially if there are any issues. Be sure that your account is being placed into good hands.

#5 – Affordability and Security

With any service, annual fees are to be expected. As you select a custodian, consider what you value and how much you are willing to pay. Between visits, calls, and other services, custodian costs may rack up due to any unexpected fees. Contract and transaction clarity are imperative when drawing up an agreement. A good custodian will be upfront with any charges they may apply to your bill over time. Any procedure costs should be noted, especially when it comes to security.

In addition to protecting yourself from any unwanted charges, it’s important to find a custodian who will protect you from any unwelcome withdrawals from your account. Cyber security is crucial in the rising age of technology. The digital age has made it easier for criminals to access vital information, and a security breach is not unheard of. Your top IRA custodian choice should be aware any faulty account transactions, ensuring total account safety for your retirement fund.

Performing Your Due Diligence

During your selection process, be aware; most IRA custodians prefer a hands-off approach when it comes to setting up and choosing investments. Self-directed accounts are designed to put you in control of your retirement fund. A good custodian will provide you with optimal customer service, industry knowledge, and the security needed to set up your investments. Be sure to consider all of your options and choose the best fit for your future.

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