Broad Financial is a self-directed IRA company that has been operating since 2004. It serves customers throughout the US and has been reviewed hundreds of times online. This is one of the most popular options for people who want to create a self-directed IRA, but are their services worth it? And are they a legitimate business?
Here are the most important things to know before you get started.
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About Broad Financial
Broad Financial was founded by experienced finance professionals who wanted to offer real estate holdings to their clients. They began operating in 2004 and helped clients to acquire many different types of real estate. But when the 2008 economic crash happened, most of their clients had 40% of their retirement savings wiped away overnight.
This caused the company's owners to reassess. They decided that while real estate is a solid investment, it should only be one part of a balanced retirement portfolio. In 2009, they began branching out to offer a variety of other alternative and traditional assets as well. Their hopes were that clients would be protected from any severe economic downturns in the future.
As the company grew over the years, amassing a clientele of thousands of customers, they created their own IRA custodial company. Madison Trust Company is a subsidiary that is licensed to act as a custodian for self-directed IRAs. They will manage both the alternative and traditional assets held in the account.
One of the biggest things that attracts clients to Broad Financial today is their Bitcoin IRAs. Many people are investing in cryptocurrency for their retirement, in the hopes that it will keep growing exponentially over time. While this is legal, it can be difficult to find a company that has the expertise to help you get started.
Another option is to create a self-directed IRA that has checkbook control powers. This means that you open an LLC within the account, and you use the LLC's checkbook to purchase assets with the account funds. This choice is popular for people who want to have ultimate control over their account without deferring to a custodial team.
Available IRAs
The company's entire purpose is to help you set up an IRA that works for you. It should have a balance of assets that reflects your values, risk tolerance, and goals for long term growth. As such, Broad Financial gives you access to a variety of different investment opportunities at competitive prices.
There are three main types of IRA offered through the company.
One is a basic self-directed IRA. This account will be set up with a custodian and maintained over time. When you make transactions within the account, you will have to pay a fee to the custodian. Different assets and different types of transactions have different fees.
Assuming you work with Madison Trust Company, you should be able to find a transparent explanation of their fees. Broad Financial should also be able to work with any other custodian that you prefer instead.
The second type of IRA is a checkbook IRA. While this is still a self-directed IRA, it involves significantly more paperwork. Because of this, the setup fee tends to be much higher. But at the end of it, you have a checkbook that you can use to make direct purchases with your account funds.
Some people prefer checkbook IRAs because they like to have total control over their holdings. They also like to avoid the transaction fees that come with custodial management.
But some financial advisors have recommended that people don't use checkbook IRAs. They say that these types of accounts are often used to commit fraud, which means that they have a higher chance of being audited by the IRS.
The solo 401(k) is the last account option. This is basically the type of 401(k) you'd use as a self-employed contractor. With a traditional setup, you'd use assets like stocks and bonds and other Wall Street favorites. But Broad Financial sets the account up so that you have greater flexibility.
Some examples of things that you can do with a solo 401(k) include: