Blog

Who is the right custodian for my Self Directed IRA?

When choosing a Self Directed IRA Custodian here are a few points you will want to keep in mind. First and foremost, you want a custodian that you can have a long term relationship with. You need to feel comfortable with how your communication is with your custodian. Do they answer the phone when you call? Do they call you back when you leave a message? You want a custodian that you feel you can trust and has the experience needed to manage your specific type of alternative investments successfully.

There are many SDIRA custodians to choose from, but their services and fees can vary considerably. Be sure to read the fine print on the custodians’ fee schedules. Take your time comparing the services they provide and the fees they charge. There is nothing worse than hidden fees, like termination fees or transaction fees that are in the fine print you never read or asked about. If you are not careful all of your profits can be gobbled up in your custodians’ fees. Know the fee schedule and ask them to explain all of their fees to you before you move your IRA funds to any custodian.

Typically a SDIRA custodian will not offer investments; they just manage the alternative investment that you choose to invest in. They also will do all the required reporting to the IRS on a yearly basis like the 5498, this reports the value of your retirement account and it also reports if you did any rollovers and contributions into your IRA. They are also responsible to report any distributions out of your IRA on form 1099R.

And finally you want to choose an SDIRA Custodian that has a clear understanding of the complex rules and regulations when investing in alternative investments. They should be able to provide you with good information concerning these rules and regulations. If you are asking basic questions on self dealing and prohibited people and they do not know how to explain it to you, keep searching. You want a staff that is competent when it comes to the rules and regulations and can articulate what those rules and regulations are.

We here at Blue Diamond Documents have formulated relationships with a number of SDIRA custodians that we can refer you to. Remember, read the fine print, ask the right questions and do good due diligence on any company you are going to trust with your retirement funds.

Timothy Schubert CISP