Welcome to the World of Self-Directed IRA Custodians — Structure and Fees

You already know you have options for establishing your self-directed IRA.  These choices are utilizing the services of a Custodian, an Administrator or a Facilitator.  Learn more about the Custodian business model including sample fee structures for two nationally-leading self-directed Custodians.

Custodian Structure

A Custodian is a company who is either approved and regulated directly by the IRS, or affiliated with or owned by a bank or trust company and subject to regulation from their state Banking Commissioner and/or the Comptroller of Currency and FDIC Custodians handle the formation and maintenance paperwork for your retirement account as well as handle the money for you.

“A Custodian Ensures my IRA’s Compliance with IRS Prohibited Transactions” — Think again.  Many clients believe this, but,  generally speaking,this is not correctYour IRA Custodian simply will adhere to your instructions and will not verify that your investment meets or complies with any IRS regulations.  Don’t believe it?  Read the language in any IRA Custodian application….they clearly absolve themselves from any such responsibility.

Want Checkbook Control of your IRA Funds? — Typically speaking, you won’t have it.  When you retain the services of an IRA Custodian, they hold the checkbook and only act upon requests that you make.  You might ask why have a Custodian holding the checkbook if you are not required to do so.

Need your IRA Funds in a Timely Manner? — That may or may not happen depending on when you need an investment choice funded.  However, won’t most agree that when your IRA LLC checkbook is in your desk drawer, that is always going to be faster than making a request of a Custodian for the same funds?

Custodian Fees — Are you prepared for annual fees for your IRA?  In addition, are you prepared for annual account balance fees, annual account maintenance fees, transaction fees, miscellaneous fees and termination fees?    Review an [illustrated] example of annual fees  from two national-leading Custodians on a hypothetical investment purchase.  Remember, when you are reviewing the example, ask yourself, “Do I want to pay these fees every year and still not control the IRA checkbook?”