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Banks and other financial institutions do not what their clients investing in alternative assets, such as real estate, because they make money by charging you fees for transactions and by selling you traditional assets, like mutual funds.
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About IRA Financial:

IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(K) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

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If you have been considering opening a self-directed Individual retirement account (IRA) at your local bank, you may have hit a roadblock. Many individuals are surprised to learn that most traditional banks do not offer self-directed IRAs through their branches. While this may initially seem like an inconvenience, there are several reasons why this is the case.

First and foremost, traditional banks typically offer traditional IRAs or Roth IRAs, which are managed by the bank’s investment professionals. These types of IRAs have limitations on the types of investments you can make, usually limited to stocks, bonds, and mutual funds. On the other hand, self-directed IRAs allow account holders to invest in a much broader range of assets, such as real estate, private equity, precious metals, and more.

These non-traditional investments require a higher degree of due diligence and compliance to ensure they comply with IRS regulations. This is where self-directed IRA custodians come into play. Custodians are financial institutions that specialize in administering self-directed IRAs and ensure that all investments are held in compliance with IRS rules and regulations.

Another reason why banks may not offer self-directed IRAs is the additional administrative burden and liability associated with these types of accounts. The wide range of investment options available in self-directed IRAs can create complexity for both the account holder and the bank. Custodians are experienced in handling these complexities and have the expertise to ensure that all transactions are properly executed.

Additionally, banks may have internal policies that restrict them from offering self-directed IRAs due to potential conflicts of interest or concerns about investment risk. By partnering with a self-directed IRA custodian, banks can refer their clients to a trusted, third-party provider that specializes in these types of accounts.

While it may be disappointing to discover that your local bank does not offer self-directed IRAs, there are plenty of reputable custodians available that can help you open and manage your account. By working with a specialized custodian, you can take advantage of the benefits of a self-directed IRA and diversify your retirement portfolio with a wider range of investment options.

In conclusion, while you may not be able to open a self-directed IRA at your local bank, there are alternative options available that can provide you with the flexibility and control you desire over your retirement savings. By partnering with a reputable custodian, you can unlock the potential of self-directed investing and take your retirement planning to the next level.