How to Choose an Alternative Investment Custodian

In the financial world, the term "custodian" simply indicates that an individual or entity has legal responsibility for the possession of a client's securities or cash. A "custodian" is not the same as an "administrator", an individual or entity that may be handling documentation, but is not legally responsible for safekeeping of the valuables being administrated.

Your custodian serves you by:

  • Maintaining the IRS tax-deferred status of your IRA or other retirement savings account
  • Assuring that the documentation to support tax deferred status is complete and accurate
  • Following all guidelines and regulations to:
    • establish and fund the account
    • acquire and document each alternative asset
    • maintain account activities such as dividend and interest payments, expense payments, etc.
    • report annual asset valuation
    • produce annual reports for tax filings
    • execute distributions and payments on behalf of your retirement account
    • divest the asset once it is sold

Regulatory oversight

PENSCO Trust Company is registered and regulated as a non-depository trust company by the state of New Hampshire. PENSCO Trust Company meets the regulatory requirements of a bank or trust company and is responsible for administering accounts on behalf of its clients. PENSCO Trust Company is subject to oversight by both the New Hampshire state regulators and the Internal Revenue Service.

FDIC insurance

Cash held in your tax-deferred retirement account is insured up to $250,000 by the FDIC insurance of the member bank holding your money. In PENSCO's case, we allocate our clients' cash reserves to accounts in multiple, well-capitalized banks at any one time, in efforts to make FDIC insurance available up to $250,000 per accountholder, per institution.

If you have questions concerning where your deposits are held, please call us for details.

What to look for in a custodian

So, to choose a custodian to administer your self-directed retirement savings account, you should look for:

Experience
PENSCO has been serving self-directed IRA investors for more than 20 years.
Regulated oversight
PENSCO is registered in and regulated by the state of New Hampshire.
FDIC insurance
PENSCO extends FDIC insurance coverage by spreading client cash over multiple banks.
Sound reputation
PENSCO is known for its premium client services and long history of client focused services. Many of the country's most distinguished financial institutions refer their clients to PENSCO for alternative investment custody services.
Service orientation
PENSCO has a knowledgeable and helpful client service team, including dedicated relationship managers for advisors.

Next steps