Any Good Self-Directed IRA's out There??

[April L. Williams]

I recently invested a small chunk of change in with a company to roll over into a "traditional IRA", which was then rolled over into a "self-directed IRA." However, I'm not very happy with the ethics of the company. I was told, initially, that my investment in my self-directed IRA could bring anywhere from 12-20% interest. However, I was never told that there are lag times throughout the year when I can technically invest that money into "projects", as they call it, that will get me this 12-20% interest. So, I asked my rep today, "So, during those lag times, my money just sits there not doing anything??" He slowly replied yes. Keeping mind, I was charged a hefty fee for even opening this account, and with the lag time, there's no way I will be able to make that fee up with the interest from this account. Is this typical with Self-Directed IRA's?? Are there any Self-Directed IRA's out there that do not have lag times that you can invest your money year round??? Or, are Self-Directed IRA's basically a waste?? Trying to make decision on where to cut my losses and move my money into something else or put it back into my Traditional IRA which invests in the stock market. But, just makes me uneasy investing any more of my money with them when they knew I could not invest any of the money in my Self-Directed IRA (2) days ago when they set the account up, knowing it would cost a hefty amount just to set the account up.....not happy about that. I've really had to learn over the last few months that the old saying, "your word is your bond" that used to apply to doing business back in the day does not apply today....which is truly sad....not how I like doing business with others.

[Brian Eastman]

@April L. Williams

It does not seem that the issue with with the IRA, but rather with the investment provider who encouraged you to setup a self-directed IRA so you could invest in their opportunities.

A self-directed IRA is simply an IRA platform with different processing capacity. Because of the more labor intensive people pushing paper process that is required for an IRA to document the more individual types of transactions that occur in alternative assets, the fees are higher than in a conventional stock brokerage IRA.

So, a few things to unwind.  I suggest you get your own counsel in the form of a CPA or independent financial advisor (not a stock salesperson, but a strategist) to look at what you are doing and provide guidance.

It is possible with a self-directed IRA to keep capital deployed more consistently and/or easily move between "idle" in conventional stock/fund investments and "deployed" in the specific alternative asset opportunities.

You can potentially stay in a custodian-managed self-directed IRA which is what you have. That will always be a bit clunky and slow. Alternatively, you might see benefit in upgrading to a Checkbook IRA LLC where you can have direct control over funds and are not required to go through the custodian layer for each and every move.