What are the potential warning signs that a Self-Directed IRA administration firm is not going to be all it is cracked up to be? That was the question recently posed at a post at American IRA’s blog. In the post, the Self-Directed IRA administration firm examined issues such as experience, payment structure, and professionalism to give potential investors an idea of what to look for.
The post started by introducing one potential warning sign: lack of experience among the leadership at the administration firm. Because a Self-Directed IRA administration firm serves as a custodian on Self-Directed IRA accounts, the post argues that experience is important, providing the staff of an administration firm with critical skills unique to the Self-Directed IRA. It is a different type of retirement account arrangement, requiring administration that understands how Self-Directed IRAs work.
The second potential warning sign, according to American IRA, had to do with payment structure. Payment structure can sometimes result in an investor paying more as a retirement account grows. But American IRA argues that a flatter payment structure is more beneficial for investors, allowing the money to grow within the account while the fee remains flat. That means that the fees, as a percentage of the portfolio, can actually shrink over time.
The third issue pointed out was the lack of professionalism, an issue that investors might find a problem within any type of investing arrangement.
“People want to be confident that they’re working with a good Self-Directed IRA administration firm,” said Jim Hitt, CEO of American IRA. “This post takes that concept and makes it specific. What are the actual warning signs that an administration firm is not on the level? How do you find someone you can trust? This is the type of post that investors who are in the first stages of seeking out a Self-Directed IRA can really benefit from.”