When shopping for the right self-directed IRA (SDIRA) custodian it is important to ask the right questions. There are currently around 60 legitimate firms that are approved by the IRS. While not all of those firms specialize in SDIRAs, there are many to choose from, making it important to find the one that fits your individual needs best. Here are some factors to consider to ensure you put your assets in good hands.
Knowledge and ExperienceWhen selecting a custodian for a self-directed IRA, their experience is important. In order to find a competent custodian, they should have an extensive knowledge base of the industry. An SDIRA custodian does not provide financial advice; however they will be taking care of your finances and should be experienced enough to fully comprehend the inner workings of your account. This helps with transparency between the custodian and account holder and builds a stronger relationship.
ServiceA custodian will be responsible for various functions within the maintenance of an SDIRA. Their service must be held to high standards due to the substantial documentation requirements. A custodian’s efficiency and timeliness of response can affect investments. An account holder can avoid these costly mistakes by paying attention to important service components such as consistency, responsiveness, depth of knowledge, precision, and direct communication.
FeesEvery IRA custodian charges a fee to maintain your account. Be sure to ask a potential custodian what their fees are and how you will be billed to avoid any confusion. Every custodian follows some sort of fee structure. In order to understand the cost of an SDIRA, you will need to discuss set up cost, transactional fees, annual charges, and any other miscellaneous costs that you should be aware of. Billing can vary depending on your investment types. It is critical to take the time with due diligence to understand how much you will be charged overall for your unique needs.
Questions to AskTo determine the level of knowledge and support that a custodian offers, you will want to know:
- What practices, online platforms, or other features does the custodian implement to make communication easier?
- What is their company’s core values and mission?
- How long has the custodian been conducting business?
- Does the custodian offer any educational materials on the process or on their specific services?
- What fees are involved? How are they billed?
- How often will they provide reports and what do those include?
- How many clients does the firm provide services for?
- What is the average turnaround time for opening a new SDIRA account? Investing in an asset?