The SEC’s Office of Investor Education and Advocacy (OIEA) and the North American Securities Administrators Association (NASAA) recently issued a notice warning investors about fraudulent investments in self directed individual retirement accounts.
This is the dirty little secret of checkbook control and or self directed IRAs. There is a very good chance that you discovered the concept of self directed IRAs from an investment promoter. Now they sent you to someone to open up a self directed IRA. In fact the party opening the IRA could even be receiving either a commission for you to open the self directed IRA.
If that is the case, make sure you do your due diligence on the investment. My guess is that 90% of people who have created self directed investments have lost money. Sure a very large part of that could be due to the real estate melt down, but at the same time I’ve slowly come to the realization that a lot of people just aren’t sophisticated enough to manage their own investments.
Bottom line, if you take “checkbook control” over your retirement funds. Make sure you know what you are doing.