When you use a Self-Directed IRA, it is only natural to want to feel like you are in good hands. You should have trust that the Self-Directed IRA administration firm you are working with is in your corner. True, the relationship with an administration firm will be different than if you were to seek out an investment advisor. But in the case of a IRA administration firm, it is important to know that the people you are working with can serve as an effective, trustworthy custodian on your Self-Directed IRA.
How can you tell? After all, not everyone comes into this world knowing the differences between two Self-Directed IRA administration firms. That is why we have put together this brief post to explain the tell-tale signs that an administration firm might not be the right choice, or even on the level.
Warning Sign #1: Lack of Experience
This is a warning sign that could extend to just about any field. It is not to say that lack of experience is always a telltale sign that quality will be poor. But it is an important variable to consider. For example, when you look at American IRA, you will see a list of people who have been working with Self-Directed IRAs for years and even decades. There is a history there that tells you that this is what we do. If you find that lacking in another administration firm, you should at least have some questions to ask.
To gauge lack of experience, look at the people in the administration firm. Ask yourself if they are new to the industry, or people who have been working at the company for a long time. Longevity tends to hint at quality; people who are good at their jobs tend to keep those jobs.
Warning Sign #2: Poor Payment Structure
Payment structure is very important to us here at American IRA because we understand the fundamental effects it can have on your retirement prospects. Simply put, if your payments grow with your account, it can bite into your ability to retire.
A typical Self-Directed IRA payment structure might expand as the size of the portfolio expands. And this can be problematic for the investor since an investor’s goal is clearly to expand the size of their portfolio. But why should they pay more, necessarily? At American IRA, our fee payment structure is simpler, allowing the fees relative to the size of the account to shrink in certain cases. With a flatter fee structure, the investor has more wiggle room to grow a retirement account.
Warning Sign #3: Lack of Professionalism
When it comes down to it, you want to be sure that the people administering your Self-Directed IRA are qualified professionals. They handle the transactions, which means that if they are not professionals, they are representing a custodian role in a poor way. You can gauge this by reaching out to the administration firm and seeing how they treat you. Are they courteous and professional? Do they give you straight answers about their roles, or do they obfuscate?
The important thing here is that you are sure that you are working with people you trust. This is your retirement account, after all. It is a vehicle through which you build the wealth that will provide the security you need in your twilight years. If you cannot be certain about the Self-Directed IRA administration firm that is serving as a custodian on the account, then put in the work to find the administration firm that can.