IRAs may be set directly with any mutual fund company. Such direct business usually enjoys low custodial fees (some are as low as $10 yearly), but, when rebalancing, there are trading charges and, if funds are replaced or repositioned there are often sales charges.
When dealing with IRAs, most advisors:
* May set up an IRA with an advisory or brokerage account on the trading platform used by his or her broker-dealer/advisory firm, but, again, when there is rebalancing, there are trading charges to consider, and custodial charges are likely to be higher than with direct business.
* May do REIT business with a custodial trust company. If an advisor uses this approach and the trust company goes berserk, increasing fees geometrically (as one I used did, after it was acquired by another firm, costing customers and me dearly), one may wind up with charges that subtract a significant portion of account performance. And, of course, the REIT is likely to be illiquid and it may be expensive or impossible to exit until there is a liquidity event.
* May set up a crazy real-estate “self-directed” IRA; if so don’t let a relative of the IRA owner use the property and check the unaffiliated tax rules re unincorporated business tax (UBT). In other words, make sure everything about the self-directed IRA complies with all rules and that any required UBT taxes are paid.
* Or, if an advisor has, say, $10 thousand or more in the IRA in question, one might use the set it and forget it model. While it would still need to be reviewed periodically, changes may be made internally without charges to the customer. How could this be done? By contacting Sammons, a company that has built an exceptional IRA product, one that rebalances for free and has low costs.
The Sammons Mutual Fund LiveWell IRA is available for ages 18 and up; it may be used for Traditional IRAs, Roth IRAs, SEP-IRAs, inherited IRAs and rollovers. Regardless of the type of plan, a customer must begin with at least $10 thousand and additional contributions must be at least $1 thousand (or $100 for monthly EFT). The expenses range from 75 bps for accounts less than $25 thousand to 40 bps for those at or above $100 thousand. There are mutual fund management fees, but no mutual fund sales charges. There are no front-end or back-end fees.
One great advantage of LiveWell—a feature I really like—is the fact that automatic (free) rebalancing is available. The concession is 1% the first year and 50 bps annually thereafter.
LiveWell has an array of over 100 mutual funds inside its wrapper–tactical allocation folks like me can have a ball with funds like:Guggenheim Transparent Value Directional Asset Allocation, Ivy Asset Strategy, Templeton Global Bond, Aberdeen Long-Short; and LiveWell even has two tactical no-load offerings from WBI. There are allocation funds and target-date funds, and on and on…
Sammons is a $46 billion company. You may reach the sales desk at 855-624-0201. But, before you pick up that headset or IPhone wait; there’s more.
More? Sammons also offers a variable annuity that contains many sub-account versions of the same funds that are inside the IRA wrapper. The VA also has a $10 thousand minimum. It is essentially a c-share annuity, one with no early-surrender penalties and low fees. It pays a higher concession than the IRA wrapper, and is available from ages 18-90 in qualified or non-qualified versions. The phone number is the same for both the VA and the IRA wrapper.