Real Estate Investor · Member since 2011 · 29 posts · 40 votes
I am looking to do a self directed IRA, i was thinking of using
the "Equity trust Company" www.trustetc.com.
Their fees seem reasonable, the service seems capable, and they
are out of Ohio which is not a hotbed of fraud unlike Florida and Nevada.
Pluses: They were recommended to me. They are a family owned private business. They have been in business for a while
Negatives: They are small $64MM assets, their CPA is a one horse shop.
As I am trusting my IRA to them, I wanted opinions. My IRA was at Merrill, and they exploded, so the big guys aren't safe.
Madoff was a family enterprise also.
San Francisco, CA · Member since 2014 · 345 posts · 281 votes
12y
The issue of who is the custodian of your money while it is in a Self Directed IRA is a big deal that people should think about. I use uDirectIRA and I have had mixed results with the service and the security of my personal information. My money though, when it is not invested in a note etc., sits in bank accounts of Amercan Estate and Trust, a Nevada company.
American Estate and Trust, unless you specifically tell them to keep the money in an FDIC insured institution account, has the right to invest that money in 'high quality' fixed income investments. There is no disclosure of what the 'high quality' fixed income investments are - no description is provided. IRA holders also receive a pittance of interest (they could pay me/you .5% while investing in 8% junk bonds and pocket the difference.) I transfer money out of my SDIRA when it is not locked up in a deal.
I think a lot of these outfits make a good deal of their funds by investing this 'float' - IRA money not invested by customers - in other debt or equity investments. SD IRA's are still lightly regulated cowboy town as far as I am concerned. Be careful especially that you understand (and can be shown) where your money is when it is not in one of your self-directed investments.
The risk is that your 'custodian' decides to buy a bond or make a loan or whatever in XYZ company (or uses your funds as collateral, etc.) and then it goes bad. There is no insurance for your deposit in this case.
Buyer beware. Don't be afraid to ask questions aggressively. You are your own best advocate and there are options, so if something smells bad, think carefully about it.
Pensco is the big outfit in San Francisco that I would qualify as blue chip and most reliable, but they also charge % of asset fees.
Real Estate Investor · Crossville, AL · Member since 2014 · 11 posts · 3 votes
12y
I have used IRAclub for about 7 years now. They are non-custodial (no hold ups when you need your money) and are super easy to work with and reach. Dennis Blitz is the owner.
San Francisco, CA · Member since 2014 · 345 posts · 281 votes
12y
The issue of who is the custodian of your money while it is in a Self Directed IRA is a big deal that people should think about. I use uDirectIRA and I have had mixed results with the service and the security of my personal information. My money though, when it is not invested in a note etc., sits in bank accounts of Amercan Estate and Trust, a Nevada company.
American Estate and Trust, unless you specifically tell them to keep the money in an FDIC insured institution account, has the right to invest that money in 'high quality' fixed income investments. There is no disclosure of what the 'high quality' fixed income investments are - no description is provided. IRA holders also receive a pittance of interest (they could pay me/you .5% while investing in 8% junk bonds and pocket the difference.) I transfer money out of my SDIRA when it is not locked up in a deal.
I think a lot of these outfits make a good deal of their funds by investing this 'float' - IRA money not invested by customers - in other debt or equity investments. SD IRA's are still lightly regulated cowboy town as far as I am concerned. Be careful especially that you understand (and can be shown) where your money is when it is not in one of your self-directed investments.
The risk is that your 'custodian' decides to buy a bond or make a loan or whatever in XYZ company (or uses your funds as collateral, etc.) and then it goes bad. There is no insurance for your deposit in this case.
Buyer beware. Don't be afraid to ask questions aggressively. You are your own best advocate and there are options, so if something smells bad, think carefully about it.
Pensco is the big outfit in San Francisco that I would qualify as blue chip and most reliable, but they also charge % of asset fees.
Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
11y
IRA Services Trust Company is another company that will serve as custodian of the assets or will hold the IRA LLC with checkbook control. You get to decide.
Coppell, TX · Member since 2014 · 188 posts · 125 votes
11y
I'm looking into Broad Financial out of New York area. Their custodian fees are the best I've found ($45 per quarter). They charge $1,495 to set up LLC in any name you want that's available. They've been very responsive.
I looked also at Quest IRA in Dallas where I live. They have great trainings on IRA and more but their custodian fees are more expensive so I'm weighing the pros and cons of both companies to see what's the best fit for our $300K+ funds that are currently earning 3.5% in a 403(b).
I'm looking into Broad Financial out of New York area. Their custodian fees are the best I've found ($45 per quarter). They charge $1,495 to set up LLC in any name you want that's available. They've been very responsive.
Rodney, Broad Financial is NOT a custodian, they are facilitator and will set up IRA owned LLC for you, but there will be another third party custodian to hold you IRA. Be sure to ask more questions so that you can understand the structure.
Coppell, TX · Member since 2014 · 188 posts · 125 votes
11y
@DmitriyFomichenko, I know this already about Broad. They set up the account and have already discussed the custodian company to me which will be the one charging the $45 quarterly.
Coppell, TX · Member since 2014 · 188 posts · 125 votes
11y
@marknolan, I don't see on their site where they set up the LLC or charge for it. Only the $59 start up cost. But without filling out their online form, I can't see other fees apparently.
Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
11y
Per our disclosure, companies like the one I work for also offer the LLC setup service and for a lower price. IRA Services Trust company's annual custodian fee is also less at $136 than $45 X 4.
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
11y
I just completed 3 transactions with Equity Trust. They were quick, professional and a pleasure to deal with.
I had a deal in December 14 that almost didn't close due to Equity Trust dropping the ball on some paperwork.
So it's possible that they are hit and miss, however I like to think that the level of complaining I did back in December caused them to do additional training with their staff and that they will now be consistently good.
The principals of Broad Financial recently created Madison Trust Co to be their own in-house custodian. I can certainly understand why they would want to do that for the sake of efficiency and control, but it raises several concerns. This is a brand new custodian. There is no independence of the custodian from the IRA LLC facilitator. The IRS has strict compliance guidelines and an independent custodian ensures that all providers of the IRA-owned LLC meet those criteria without concern for expediency or the shared business model. I'm not saying that Broad and Madison are cutting any corners, but there is the concern that they could - even unintentionally.
And when speaking about custodian fees, a few dollars this direction or that is inconsequential. Quality of service varies greatly among custodians - not always in accordance with fees. Be sure to work with a custodian that has a track record of solid compliance and customer service.
Investor · Diamond Bar, CA · Member since 2015 · 1 post · 1 vote
10y
I recommend uDirect, simply because we've worked with them for a long time, and they are highly reliable and professional in what they do. However, don't take my words for it. Do some research on them and see how you feel. They're actually doing a webinar on this coming Thursday on due diligence of investing with Self-Directed IRA by Kaaren Hall from uDirect and Mathew Owens from OCG Properties. You can at least listen to their materials first before inquiring further about their service. Here's a link if you need it:
Investor · Canton, GA · Member since 2015 · 88 posts · 63 votes
10y
I personally use the Kingdom Trust Company out of Kentucky. They have been pretty reliable and reachable so far. Never had a problem calling them up to discuss a transaction, and their employees all seem very knowledgeable on the whole SDIRA space. Sometimes they can get backed up when it comes to email so if you have an urgent question, I recommend calling them directly. Also, their website/client portal is not that great in comparison to other custodians. It's very basic and does not update in real-time. They require their customers to fill out PDF's and email them to an investment associate rather than fill out an online form in the client portal. This is a challenge I think most SDIRA custodians have however from what I've researched.
Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
10y
Hands down I prefer IRA Services Trust Company. They have been in business since 1978 and I have always been able to get in touch with them effortlessly.
Real Estate Agent · W Hartford, CT · Member since 2015 · 9 posts · 0 votes
10y
I am looking to move my SEP to a self-directed IRA. Since it seems that recommendations change from year to year, I would love to hear what custodians are in favor right now. TIA.
As a realtor, you are likely self-employed and would find the Solo 401(k) format provides some significant advantages over a self directed account serviced by a 3rd party custodian.
As a retirement plan, the Solo 401k allows for contributions of up to $53K per year (same as the SEP IRA), but with both employer and employee contributions, you can generally get more contributions into the plan with more moderate income.
The Solo 401k is a retirement trust, and you can serve as the trustee. Once you have established the plan with a reputable provider, you can simply open a trust account at the bank and/or brokerage of your choice, and will have signing authority on the account.
Rather than send paperwork to a 3rd party to process your transactions, you can self-administer the plan and directly execute plan transactions.
It is a more flexible, powerful and cost-effective tool, and something you should look into.
Wholesaler · Miami, FL · Member since 2016 · 2 posts · 0 votes
10y
Hi All,
Has anyone worked with Horizon Trust? It has been recommended to me but I feel that their fees seem to be high? I am on the fence about Equity Trust because it seems they are hit or miss based on the previous posts even though I see their fees are lower.
I am looking to create a self directed IRA to use the money to Purchase RE and/or Tax Lien Certificates. I only have $20k to move.
Investor · Cleveland, OH, OH · Member since 2011 · 13 posts · 2 votes
10y
@Laura B. In my position I work with many custodians from the investment opportunity side. I' also active SD investor myself, not to mention having had firsthand experience in the custodial arena in the past. Specialized IRA Services is my go-to provider for my clients. They have personalized service, very cost efficient, & they offer educational support that's actually valuable. Not just the fluffy stuff. As notes previously, I highly recommend looking into a Roth Solo-401k wherever you go. Hope this helps on your search.
SpecializedIRAServices.com
RITA also offers a list of its members as well - that's always a good resource:-)
Has anyone worked with Horizon Trust? It has been recommended to me but I feel that their fees seem to be high? I am on the fence about Equity Trust because it seems they are hit or miss based on the previous posts even though I see their fees are lower.
I am looking to create a self directed IRA to use the money to Purchase RE and/or Tax Lien Certificates. I only have $20k to move.
I really appreciate it.
Hey Steven,
Best is kind of subjective, do you mean cheapest? Do you mean fastest? etc. The one thing I really caution you against is going with a company that has a sliding fee scale. Horizon for example charges based on your account value, which is great now if you are only investing $20,000 but if you want to add money to the account, or if that account grows (which it hopefully will) you could find your fees double someday because your account balance crossed one of their fee bracket threshholds.
I would recommend finding a custodian that has a flat fee structure so you know your account fees won't double in a few years.
Additionally make sure you find an actual custodian rather than a facilitator. Custodians generally have set up and annual fees, but those will generally be inflated by a facilitator to make their cut.
I would also consider going with a company that deals in more than just self directed accounts. Generally a self directed trust company will only be audited by the state financial division, where as a company that deals with S&L and traditional accounts will be subjected to much more rigorous auditing. Additionally the self directed marketplace is somewhat rife with fraud, and a larger more established company will likely be more reputable.
I would suggest checking with Provident Trust Group or Northern Trust. I used to work for Provident so I know their fee schedule is flat, and Northern Trust is a well established trust co that deals in all different types of accounts, not just self directed.
Wholesaler · Miami, FL · Member since 2016 · 2 posts · 0 votes
10y
Hi Adam, Thank you for your reply. In terms of the best, I think what I meant was that I am not going to get bent over and get screwed without being kissed. Like you mentioned sliding fees, I didn't know some companies charged a flat fee. Thank you for that tip.
My issue it was going to cost me $1000 bucks to move my money over and it just felt so tired of dishing up cash every time my program offers me something that I need. I read some where that I can create an IRA LLC and have check book control which feels like exactly what I want to do so I don't have to be dishing fees for any little thing and I have control of timing. Do those two you recommeded handle that?
I need to get my act together in all this, I am really down the hole....
Roseland, NJ · Member since 2012 · 73 posts · 20 votes
10y
@Steven Ojeda I'm sure everyone has an opinion on providers based on their experience with them. It really depends on what you're looking for from a company.
I think it's going to be difficult to find someone who can competently handle self-directed IRAs and also other types of accounts. This part of the retirement industry tends to be quite specialized as traditional custodians don't want to handle this business for a variety of reasons.
Please be cautious about single member LLCs as they do allow more flexibility; however, unless you are extremely familiar with the rules on self-direction, you can easily do a prohibited transaction and put the tax advantaged status of your account at risk.
For instance, did you know that if the LLC applies for credit (even a credit card) and you sign off on the application as the manager of the LLC this is a prohibited transaction?
If you go that route, be sure you work with an ERISA attorney who can advise and guide you through the process and on an ongoing basis to be sure you follow the rules.
Best of luck finding a provider who works for you.