Opening a private lending IRA with just any old IRA custodian might prevent you from being able to enjoy all of the benefits that a private lending IRA has to offer. That’s why it is imperative to do your homework when choosing a private lending IRA custodian. Here are five things that you should be aware of when choosing the right custodian for your needs.
Is the Company You Are Looking At Truly A Custodian?
Thanks to the ever growing popularity of self directed IRAs like private lending IRAs, there are a ton of companies that are popping up claiming to be custodians. However, this isn’t always the case. Custodians of private lending IRAs are regulated companies that have the ability to custody assets on behalf of accountholders and are recognized by the IRS. This is the type of provider you want to work with. Administrators and facilitators should be avoided at all costs.
1. Are They BBB accredited?
Now that you have established the type of company you are working with, it is time to see how they conduct their day to day activities. The Better Business Bureau, or BBB, is still the gold standard when it comes to rating businesses based on best practices and how they handle customer complaints. If the custodian you are looking at is accredited with the BBB, you can rest assured that they are competent in the services they provide as well as hold high standards for customer service.
2. Do They Have Experience?
Of course, when you review a potential custodian, you are going to want to take a look at the size of their custodial assets, so to speak. Custodians who have managed a relatively small number of assets may not be the right custodian for you, especially if the types of assets you are wanting to invest in aren’t represented. Generally speaking, a company with more experience is going to be able to offer you more.
3. Where Do They Offer Services?
Thanks to the advancements in global connectivity due to the Internet, it is easy for smaller, more regional custodians to find themselves showing up in searches done in areas they don’t service or have a limited exposure in. Make sure that the custodian you choose services the area in which you live.
4. Are They Committed To Your Privacy?
Keeping your personal information private is something that is in the best interest of every individual. Your custodian should take your privacy as seriously as you do. Ask your potential custodian to provide you with their privacy policy and their pledge to not sell your information to third party marketing companies.
5. Do They Emphasize Customer Service?
Using your IRA funds to make loans is something that can be somewhat paperwork intensive. Making sure that your I’s are dotted and T’s are crossed is an important element of doing this successfully. Make sure that your custodian is committed to high levels of customer service so that you can rest assured that your paperwork is always in order.