Self Directed IRAs and Fees

Let’s take a look at what kind of fees retirement accounts often have to pay, and how Broad’s Checkbook Control model is able to eliminate a great many of them.

If you have your retirement money invested with a standard IRA provider, than your account could be subject to a large selection of fees including (but not limited to): set-up, custodian, asset, termination, commission, transaction, load, management, surrender, special asset management, and wrap or advisory fees. These fees vary according to the specific provider, but basically anytime your account changes in any way (deposit, transaction, etc.), it will be pinged with a fee. Additionally, there will be general fees that are often tied to the size of the account or are just thrown in to cover overall operating expenses. Each fee individually might seem insignificant, but taken together they can definitely do some damage to your hard earned retirement funds. This is especially true for most standard accounts where the profits are continuously reinvested. Over the course of a career, the constant loss of investment capital can mean a significantly lower payout at the end.

The Custodian model gives investors the ability to invest in alternative assets, but it retains many of the fees of a standard platform. The most notable of these is the transaction fee. When investors move to self direction, one of the direct consequences will be a more hands-on involvement with their retirement assets. The management of these assets is often transaction heavy and requires constant investor involvement. The Custodian model takes advantage of this by placing the Custodian as the indispensable middleman for all transactions. Every interaction with the retirement asset will require paperwork and a fee paid to the Custodian. For a self directed account, this is a big win for the Custodian, but a big loss for the investor.

The Checkbook Control model is able to do away with most IRA fees by cutting out the Custodian from the investment process, and putting the power back in the hands of the investor. It does this through a specialized LLC which allows the investor to perform all transactions via a dedicated checking account. This set-up virtually eliminates all management and transaction fees. The fees that are still present are the initial set-up fee and a low annual holding fee. The good thing about these fees is that they are both fixed. You’ll know from the beginning exactly how much you will be paying in fees, and you’ll never see an increase due to account activity or size.

As mentioned above, Broad utilizes a specialized LLC in the establishment of your Self Directed IRA. LLC formation varies in price from state to state, and thus the overall pricing for the platform also differs from state to state. Call one of our friendly Specialists today to find out how much it will cost to set up a Self Directed IRA in your state.

Find out more about Self Directed IRA Fees.