How do custodians make their money?
Each year you are charged a fee for simply having an account with a custodian. A custodian generates revenue in a variety of ways: Asset based fees. Transactional fees Holding fees Special fees Asset fees are usually based off a percentage of the value of your self-directed IRA. When your IRA increases in value, they are able to charge you more – even if you never purchase an asset. Under this system, larger accounts are penalized. Transactional fees are when your IRA purchases an asset. With real estate, there can be fees assessed for wiring an escrow deposit, reviewing a purchase and sale, recording each document, and fees for the final wire of funds to complete the purchase. When you sell that asset the process repeats itself. Holding fees are assets that are held with a custodian. If your IRA ever purchases a piece of real estate, the custodian can assess a quarterly fee for just holding the deed on behalf of your IRA. Special fees include expediting service, express mail, wire fun
