Considering a Self-Directed IRA – Here’s Something You Need to Avoid
When you work with a financial adviser without researching them first, you take your chances. Sure, you might put a lot of research into deciding on a financial adviser who truly has your best interests at heart—and that’s a great way to find someone who will be a valued part of your “team.” But one of the reasons that the Self-Directed IRA is so popular is because many others who don’t perform their due diligence find themselves with bad financial advice.
As USA Today notes, a new rule with the Department of Labor is designed to protect Self-Directed IRA investors like you from financial advisers who are only looking out for themselves. But that doesn’t mean you can necessarily trust that you won’t be hoodwinked ever again.
Noting an exemption called BICE, or the Best Interest Contract Exemption, the author points out that there are still ways for financial advisors to give out bad advice for their own self-interest. And investors like you need to know about these things.
The BICE Clause: What it Is, and What You Need to Know
According to the article, the BICE clause is something that salespeople can get you to sign in order to let them make sales pushes on certain products that benefit them financially. You can see how this would quickly lead to a conflict of interest, in which your best interests aren’t the main concern. That’s a problem.
The USA Today article also explains how you can tell whether or not you’re working with an adviser on the up and up when you’re doing an IRA rollover: you can have them sign a letter that has them agree to operate under the Investment Advisers Act of 1940 “as amended.” Author Ken Fisher says that if your adviser doesn’t do this, then it’s time to run.
Finding a Better Way to Handle Your Retirement
There is a lot to know about retirement accounts. What each one is, what a rollover might accomplish, and how you can maximize your assets to ensure that you have the retirement nest egg you need by the time you’re ready to finish your work.
It makes sense. You want to hand it all over to a financial adviser and say, “here—just turn this money into more money.”
If only it were that easy. The truth is, everyone who takes an active interest in their financial well-being is going to have to know more about the financial world out there. They’re going to have to know about tax protections, tax rules, contribution limits, and the rest of the story. Hiring a financial adviser doesn’t excuse you from this knowledge—if anything, you want to stay on top of your finances just to make sure that your financial adviser is still doing a great job for you.
But there’s another option.
The Self-Directed IRA and You
A Self-Directed IRA may seem rudderless to you, without a financial adviser to come in and tell you what to do with your money. But the opposite might be true. There’s a rudder—it’s just up to you to steer it.
That means educating yourself about what a Self-Directed IRA is, what kinds of assets you can hold in one, and what it takes to set one up. Though there will be a learning curve—as there is in any new venture—there are tremendous advantages to the Self-Directed IRA as well. The foremost one? No one’s trying to scam you or push a specific type of financial product on you.
For more information on these Self-Directed IRAs, continue reading up on them here at www.AmericanIRA.com or call us at 866-7500-IRA.