It’s possible to open a checkbook IRA at any financial institution. However, only a few have the expertise and regulatory authority to hold alternative assets. Good custodians can help guide you through various complexities and provide protection from possible pitfalls like fraud or prohibited transactions. Use the answers to these five questions to choose a custodian.
Is the Provider a True Custodian?
As the popularity of a checkbook IRA has grown, lots of providers have risen to try to meet the growing demand. Many of these company fall into one category. They may be a custodian, a facilitator or an administrator. Be sure to choose a true custodian that is highly regulated.
Does the Custodian Have an Accreditation from the BBB?
In order to meet the standards for a BBB accreditation, the custodian must advertise honestly, be responsive, honor customer privacy and build trust for starters. A custodian without this accreditation is not guaranteed to meet these high standards.
What Are the Size, Scale and Expertise of the Custodian?
Before choosing a custodian for your checkbook IRA, look at their size, assets, experience and expertise. Your custodian needs to be equipped to handle your alternative asset investing needs.
How Does the Custodian Protect Your Financial and Personal Information?
There are far too many data breaches and the threat of identity theft is real. The custodian holding your checkbook IRA should be dedicated to keeping your personal and financial information secure. Ask them what steps they take to secure information and safeguard from breaches.
Does the Custodian Specialize in Specific Alternative Assets?
Sometimes custodians have specialty areas like private stock, private placements, hedge funds, LLPs, real estate or others. Depending on your alternative investment goals, these specializations can be limiting. Ask the custodian about their experience in holding the types of assets you are considering for your IRA.
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