An IRA custodian is typically a bank, financial institution or trust company approved by the IRS to serve in this capacity. A good custodian may also offer alternative, potentially more risky forms of investments such as real estate or private placement securities.
When choosing a custodian, look for investment options, low fees and excellent customer service. In addition, make sure they offer user-friendly websites with dedicated support teams.
1. What type of account do you offer?
Traditional IRA custodians generally only permit investments in marketable securities such as certificates of deposit and money market mutual funds, while alternative assets like real estate, private equity, cryptocurrency or precious metals require finding a Self Directed IRA administrator or custodian.
An administrator serves as the intermediary between an IRA owner and its partner custodians who hold assets within an IRA account. These typically consist of non-bank trust companies chartered by specific states.
2. Do you offer a Roth IRA?
Custodians serve the important function of safeguarding an IRA’s assets for safekeeping. Custodians typically charge fees or commissions for their services.
Most IRA custodians do not allow IRA holders to invest in private investments like real estate, precious metals or privately-held companies; rather, they tend to offer marketable securities instead.
IRA Financial has partnered with multiple custodians in order to give our clients more options in choosing a custodian, such as investment options, fees and customer service.
3. What type of investments do you offer?
Traditional IRA custodians (banks, brokerage firms and mutual fund companies) limit your IRA investments to securities such as stocks, bonds and ETFs; whereas self-directed IRA custodians allow investors to invest in nontraditional assets like real estate, private equity funds, cryptocurrency or precious metals.
Find a custodian who understands the regulatory requirements and processes involved with investing. They should also have experience in preventing prohibited transactions, and clear channels of communication to provide timely responses when questions arise.
4. What type of fees do you charge?
Fees should be considered when selecting a Self Directed IRA custodian, but equally as essential is service quality and expertise offered by each provider.
Many IRA custodians charge fees based on the value of your account; other may charge a flat fee per transaction.
Administrators serve as middlemen between investors and sellers, earning their income by brokering transactions between investors and sellers. Their fees may be tax deductible provided they were paid using personal/outside funds after considering itemized deduction rules.
5. What type of customer service do you offer?
Custodians should strive to offer outstanding customer service, promptly answering questions. Furthermore, they should provide educational materials regarding processes and rules.
IRA custodians are highly regulated, with stringent policies, procedures, and internal controls to safeguard client information. When searching for an IRA custodian, look for one who is both reliable and has outstanding reviews – as well as offering an affordable flat fee schedule with unrivalled client support for self-directed investors.
6. What is your coverage area?
Custodians must ensure all transactions comply with IRS regulations, while also offering systems and procedures designed to safeguard your information against hackers.
Custodians often do not determine whether an investment is suitable for IRA account holders; administrators, however, can evaluate investments through government reporting mechanisms.
Some IRA custodians specialize in traditional assets while others accept nontraditional investments such as real estate, private notes, tax liens or precious metals. It is important to find one who specializes in what type of investment you wish to make.
7. Do you have a website?
The ideal IRA custodians provide a broad selection of investments at low fees with excellent customer service, understanding IRA rules such as contribution limits and age requirements.
If you want to invest in alternative assets such as real estate and tax liens, look for an IRA custodian who allows these types of investments and has an easy-to-use website that is user friendly; one who will also answer all of your queries quickly and accurately.
8. What is your experience level?
Every IRA account requires a custodian. Selecting an ideal custodian is especially essential if you plan to invest in alternative investments like real estate and private equity; look for ones who specialize in handling these types of assets while adhering to IRS rules and regulations related to them.
A high-quality custodian should offer a broad selection of investment options at reasonable fees with top customer service, experience handling self-directed IRAs and know how to avoid prohibited transactions.
