AdvantaIRA for SDIRA & Solo 401K

[Nasson Raymond]

Has anyone used AdvantaIRA in setting up and managing their Self-Directed IRA and/or Solo 401K? If yes, what is your experience? Would you recommend them? The good and the bad? Thanks for the feedback. Nasson

[Brian Eastman]

@Nasson Raymond

I cannot speak directly to the services of Advanta, and must disclose that I am a competitor offering a different kind of service in the self-directed plan space.

Two key things come to mind:

1) Advanta is a 3rd party administrator for IRA accounts. This means they are simply a processing layer, and do not act as custodian. They are not regulated in the same fashion as a true IRA custodian (such companies typically have the word 'Trust' in their name). They utilize the services of an underlying custodian for certain fiduciary services. There is some risk of working with such 3rd party administrators as opposed to a true IRA custodian. That said, Advanta does have a good reputation and track record - just an angle to look into that someone new to the concept would not even think to consider.

As an IRA provider, they would be OK for relatively static investments that do not involve a lot of transactions. If your investments will be more interactive or time-sensitive, you will want to evaluate providers of Checkbook IRA LLC programs.

2) I would strongly recommend against using any 3rd party administrator or IRA custodian for establishment of a Solo 401(k). You get a set of plan documents and that is it. We field 10+ questions per week from someone who established such a plan and has no idea what they have, how to use it, or where to get help (other than @ $400/hour with a tax attorney). As a self-administered qualified employer retirement plan, a Solo 401(k) requires access to quality guidance, and such custodial firms are simply not built to provide such guidance. For regulatory reasons, they are specifically prohibited from providing exactly the kind of legal and tax advice you need to self-administer a Solo 401(k) plan. There are several specialty advisory firms that are active here on BP that provide and SUPPORT quality Solo 401(k) plans, and that will be a much better service as well as a much better value in the long term.

[Nasson Raymond]

@Brian Eastman thanks for your insights. This is really helpful, much appreciated. Nasson