I recently read an article that talked about the top financial threats facing investors and small businesses.
The Securities and Exchange Commission is reporting an increase in complaints about fraudulent schemes that utilize Self-Directed IRAs. Scam artists are using Self-Directed IRAs as a way to lend credibility to a bogus venture.
Of the seven areas of potential fraud the author wrote about, six are investments that a self-directed IRA could make. The article addressed Self-Directed IRAs specifically by stating, “Custodians and trustees of Self-Directed IRAs may have limited duties to investors, and generally will not evaluate the quality, or legitimacy of an investment.”
I know with every article I write, I state that IRA Innovations does not provide investment advice or recommend any product provider. We do recommend that every self-directed IRA Investor seek advice from a trusted financial or legal adviser.
It goes without saying that a Self-Directed IRA is allowed to make alternative investments; from Real Estate to Cows, from Cars to Private Placements, and more. Using caution and doing your homework are the keys to success. Investors need to know what they are buying before they invest.
It is up to you, the Self-Directed IRA investor, to perform due diligence.
- Do not invest in something you do not understand.
- Thoroughly check out the provider and the investment.
- Read the offering or the Private Placement Memorandum.
- Google the names of the principals and the firm.
- Look them up on the rip off report and other online websites that will lists complaints, including scams and fraud.
- Check them out on FINRA and the SEC online for complaints.
- Check out the state where the company is licensed or domiciled to make sure they are active and are in compliance.
Remember the saying: if it sounds too good to be true, don’t invest.