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How to Choose an IRA Custodian
One of the most important steps in the self-directed IRA process is choosing the right custodian for your account. A good custodian can guide you through the complexities of self-directed IRA ownership and help protect you from pitfalls, such as fraud and prohibited transactions. But the wrong custodian can make your IRA experience harder, riskier and more complicated than it needs to be.
How do you find the right IRA custodian?
Below are just a few of the important questions that will help you identify the right custodian for your self-directed IRA. After you’ve done the due diligence on your custodian along with your investments, you’ll be ready to pull the trigger on your alternative asset retirement strategy – with a great custodian like Pacific Premier Trust by your side to help you every step of the way.
- What kind of entity is it?
- Is the custodian Better Business Bureau (BBB)-accredited?
- Does the custodian have adequate size, scale and expertise?
- What is the custodian’s client service model?
- What is the custodian’s scope of coverage?
- What lines of business does the custodian support?
- Does the custodian specialize in a particular type of alternative asset?
- How does the custodian protect your account?
Choosing an IRA Custodian
What kind of entity is it?
An administrator’s role is to process the necessary paperwork to establish IRAs. Administrators are not regulated.
Facilitators are non-regulated bodies that mostly provide education on self-directed IRAs and assist in establishing single member LLCs.
A custodian like Pacific Premier Trust is a highly regulated bank, credit union or non-depository bank that is permitted to custody assets in an IRA. Both state and federal governments provide oversight to custodians and there are stringent policies, procedures and internal controls in place.
Is the custodian Better Business Bureau (BBB)-accredited?
The standards that must be met for BBB accreditation include building trust, advertising honestly, being responsive and honoring customer privacy, among other things. If a custodian is not accredited, there is no guarantee they meet these standards.
An accredited custodian like Pacific Premier Trust has successfully met BBB standards of competency in performing its services. Pacific Premier Trust has been a BBB accredited business since 1995 and currently has an A+ rating, on a scale of A+ to F.
Does the custodian have adequate size, scale and expertise?
A custodian with a low level of assets under custody or relatively few unique positions accepted on the platform may have limited capabilities and expertise.
The size of a custodian’s business can speak volumes about their level of experience and expertise. With more than $14 billion in custodial assets, nearly 46,000 client accounts and more than 43,000 assets (as of 12/31/19), Pacific Premier Trust has the breadth and depth of knowledge to accommodate countless types of assets over 30 years in business. In addition, as the leading alternative asset custodian for clients who want to invest their retirement funds in non exchange-traded assets, we are well-versed in the IRS rules and regulations for holding alternative assets in an IRA.
What is the custodian’s client service model?
Setting up and maintaining your self-directed IRA with a new custodian can be complex and time-consuming if you don’t have access to a responsive client service team.
Pacific Premier Trust has a dedicated client service team to guide you through the onboarding of your account and answer any questions that may arise during the lifecycle of your investments.
What is the custodian’s scope of coverage?
Smaller, regional custodians can be focused on narrow geographic areas – so if you’re out of their area, you may be out of their strategic scope and have limited access to services.
Pacific Premier Trust covers the entire U.S., so wherever you are located, you can open a Pacific Premier Trust self-directed IRA account and access our dedicated client service team.
What lines of business does the custodian support?
If you’re a financial professional looking for a self-directed IRA custodian for your clients, it’s important to select a custodian that has a comprehensive advisor support system in place.
Since 1989, Pacific Premier Trust has worked with advisors to help build their alternative investment businesses. Today, we are pleased to support advisors and their clients with institutional services.
Does the custodian specialize in a particular type of alternative asset?
Some custodians have a particular area of specialty, such as private placements, private stock, LLPs, hedge funds, LLCs, direct real estate or exchange-traded assets. Depending on your alternative investment needs, asset specializations can be limiting.
With more than 43,000 assets, Pacific Premier Trust offers custodial expertise on a broad range of alternative assets.
How does the custodian protect your account?
It is important to ensure that your custodian has adequate systems and controls in place to protect your personal and financial information.
At Pacific Premier Trust we are committed to technological innovation to revolutionize the alternative asset investing process and to keep your information secure. Your personal and financial information is protected behind secure networks, and we use advanced encryption technology to allow you to safely communicate via PacificPremierTrust.com. We do not sell your personal information to anyone, and we limit the number of Pacific Premier Trust employees who can access your account. All Pacific Premier Trust employees are trained to be vigilant when handling personal information and to be on the lookout for any potentially fraudulent or suspicious activity.