When you’re a Self-Directed IRA investor, it’s easy to say that you’re going to control everything, and nothing else matters. But experienced IRA investors know differently. They know that an IRA requires working with a custodian—an administrator on the account who facilitates the transactions that you want to issue from the IRA. And working with a custodian who not only can handle a wide range of assets, but will charge you affordable fees for doing so, should be top priorities when selecting the best companies for Self-Directed IRA investors.
That’s why we’re going to take this post to explain what the “anatomy” of the best companies for Self-Directed IRA investors looks like, from head to toe.
Self-Directed IRA Company Fees
First things first: let’s get the fees out of the way. Yes, a custodian on the account is going to charge you fees—after all, they’re providing you with a service. This isn’t new to investors who are familiar with the concept of mutual funds, for example, charging fees. What you want to do as an investor is minimize these fees so that you can maximize the amount of returns you get in your retirement account.
There are two typical approaches in how Self-Directed IRA companies handle fees:
- Dynamic pricing fees: In a dynamic structure, the more assets or more value you keep in the retirement portfolio, the more fees the company charges you. This is obviously a disincentive for expanding the value of your portfolio, and even if you ignore that disincentive, it’s not always fun to know that the more money your IRA makes, the more money you may end up paying in fees, too.
- Static pricing fees: This is what we do here at American IRA—we simply “unlock” unlimited transactions under a certain account type, giving the investor the ability to pay flat rate fees no matter how big their account grows or how many assets the account holds. In other words, you can lock in the fees you pay and grow the money in the account, maximizing what your IRAs growth.
Of course, pricing alone isn’t a reason to choose one firm over the other. But it’s a major factor when weighing how a Self-Directed IRA administration firm is going to help you in the long-run.
Reliability with a Self-Directed IRA Administration Firm
Once you’re settled on the types of fees you want the Self-Directed IRA to charge you, you’ll likely move to the next priority: the ability to work with a reliable IRA administration firm. At American IRA, for example, we offer administration services as a custodian in such a way that you can hold a variety of potential asset classes in your retirement portfolio. And we do it with a team of dedicated professionals who have experience in Self-Directed IRA investing. This, in turn, gives you some assurance that you’re working with people who have done it before. That’s especially important if you’ve never invested with a Self-Directed IRA and know that you want to work with people who have real experience.
The best companies for Self-Directed IRA investors are those companies that offer administration and custodian services in such a way that you feel confident. You shouldn’t only feel confident in the fees you have on the account, but in the people who are handling the paperwork that forms the foundation of the portfolio you’re choosing for yourself.