IRA Funds

Finding a Broker or Custodian

To put IRA funds into gold, you have to establish a self-directed IRA. This is a type of IRA that the investor manages directly and is permitted to own a wider range of investment products than other IRAs.5. For a gold IRA, you need a broker to buy the gold and a custodian to create and administer the account. This company will store or hold your bullion, says John Johnson, president of GoldStar Trust, headquartered in Canyon, Texas.

Custodians are usually banks, trust companies, credit unions, brokerage firms, or savings and loan associations approved by federal and state agencies to provide asset custody services to individual investors and financial advisors. They do not select metals dealers for their IRA clients. This is the investor’s responsibility. However, established custodians have relationships with several hundred dealers nationwide and may be willing to share that list.

It can also work the other way. “Some metal dealers may recommend an IRA custodian,” says Johnson. “However, consumers are always free to search for custodians independently.”

Choosing which company to use is complicated, as it is a specialized task that major brokerage firms generally don’t offer, according to Moy. “When I did my homework, there were a few criteria that were important to me,” he says. These include:

  • Transparency: Knowing all your costs upfront can avoid any nasty surprises, such as hidden fees after you invest.
  • Track record: Look for a company with an outstanding reputation from objective third parties, such as the Better Business Bureau or the Business Consumer Alliance. Moy says it may also be helpful to dig into what customers say about the company, especially the number of complaints filed. He looked for firms that were “educational and not pushing a hard sell.”
  • Flexibility: Each investor’s needs and goals differ, so Moy suggests choosing a company that will cater to you rather than having a one-size-fits-all approach.

Qualifications: You should only deal with a company with all the appropriate and required licenses, registrations, insurance, and bonds to protect your investment. Ask for verification of those licenses and other information.…