How Do I Choose an IRA Custodian?
There is a range of financial institutions offering Individual Retirement Accounts (IRAs). Some specialize in traditional investments while others are self-directed custodians that allow alternative assets like real estate, tax liens, precious metals or private company stock to be placed into your IRA account.
Consider fees and assets being held by potential SDIRA custodians when making your selection. Avoid those that limit investment options or have slow transaction processing.
Fees
Custodians are certified institutions that will hold your IRA assets while also adhering to federal regulations. Custodians typically charge fees and offer various investment options. When selecting your self-directed IRA custodian, be aware of these differences and select one with excellent customer service.
Selecting an investment custodian that provides access to an expansive range of alternative investments – such as real estate, private equity and tax liens. In addition, consider custodians without excessive fees such as annual account maintenance fees (AAMFS), loads charged in mutual funds or trade commissions as potential options.
A quality IRA custodian should enable you to invest in traditional investments like stocks and bonds while making account management simple, online transactions faster, paperwork handled (5498 forms etc), paperwork related to IRA’s taken care of (eg 1099-R forms etc). However, make sure they’re not promoters who only advertise investments!
Investment options
Consider your investment options carefully when selecting an IRA custodian. Some IRA custodians specialize in traditional investments like CDs and mutual funds while others focus on alternative assets like real estate or private companies. Be sure to visit each custodian’s website and read about what kind of opportunities they provide as well as any fees charged – these could include annual maintenance fees, commissions on trades or loads for mutual funds.
A good IRA custodian should have an in-depth knowledge of the IRS regulations that govern IRAs and which assets the IRS prohibits from being held within self-directed IRAs, along with how best to process them. They should also be capable of handling complex transactions like buying/selling real estate or the acquisition of privately-held companies; their technology platform should allow easy access to account details.
Flexibility
When selecting an IRA custodian, it’s essential to keep their flexibility in mind. A good custodian should offer a range of investments – traditional IRA and Roth accounts along with health savings accounts, SIMPLE IRA and Coverdell accounts are among the options they should provide. Furthermore, their customer support should be readily available via online chat, email and telephone so you can quickly get answers to any of your inquiries.
Some IRA custodians specialize in traditional investments while others focus on alternative investments like real estate, private mortgages, tax liens and physical gold and silver. If selecting an alternative custodian it’s wise to avoid facilitators as these may push self-directed IRA investments on you in return for fees.
Ask the IRA custodian for their educational materials; these could include whitepapers, webinars or any other educational materials to help you understand your account and the process for depositing funds into it.
Customer service
Customer service of a custodian should be an important consideration. You should easily be able to connect with someone who can answer questions and assist with investments; some custodians offer only phone numbers and email addresses while others may offer live chat and mobile apps as additional ways of connecting.
As part of your due diligence, it’s also essential that you consider the fees charged by your custodian. Check whether they charge an annual, transaction, or percentage-of-balance fee, plus ask whether there are any other hidden or maintenance charges.
If you own multiple IRA accounts, consolidating them under one custodian may make sense. When selecting one to work with, make sure they know about consolidation rules and the types of IRAs which cannot be combined together. Furthermore, avoid custodians who limit your investment choices as these might provide them with revenue through limited options for investment management.
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