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PENSCO Blog

Fresh alternative asset insights and the latest news on real estate and private equity investing.

PENSCO’s Custodian Connect™: Providing Investment Platforms Access to the IRA Market

  |  By Patrick Hughes

PENSCO clients are savvy, self-directed IRA investors. Our clients — sometimes in partnership with a financial advisor — build their retirement savings by executing alternative asset investment strategies. They demand reliability, expertise and a streamlined process when working with a self-directed IRA custodian. They also want seamless access to a range of alternative investments, from marketplace lending to crowd financing, which can be used to potentially bolster retirement portfolios.

These investor needs are why we launched Custodian Connect™ at LendIt Fintech USA 2018. Custodian Connect is an API-driven capability that seamlessly connects investment platforms — like marketplace lenders — to PENSCO, enabling uninterrupted opening and funding of an IRA from within a firm's platform.

For investment platforms and marketplace lenders, these APIs allow clients to easily open and fund an IRA using a fully integrated paperless process without ever leavng your platform. Clients only need to enter their personal information once to complete the IRA set-up process.

Custodian Connect is also the first of its kind to provide digital consent and Automated Customer Account Transfer Service (ACATS) to expedite funding transfers.[1] This functionality will allow clients to more quickly execute investments in their IRA once an account is opened and funded.

Fintech and the power to transform the IRA industry

At PENSCO, where we custody alternative assets for our clients' self-directed IRAs, we are seeing fintech transform the $8.6 trillion IRA market. Custodian Connect is part of that transformation, allowing financial professionals to seamlessly reach more investors by tapping into the self-directed retirement market.

Custodian Connect follows PENSCO's 2015 launch of our Alt-Nav™ online deal funding technology. This first-of-its-kind technology has streamlined the alternative asset investment process in a self-directed IRA from weeks to days. Alt-Nav has substantially reduced the amount of paperwork involved to keep financial advisors and investors informed throughout the investment process. Since its launch, we've enhanced and expanded Alt-Nav's capabilities so capital raisers, financial professionals and individual investors can easily invest in alternative assets.

When using PENSCO's Custodian Connect, investment platforms have the confidence of knowing they are working with a trusted self-directed IRA custodian. For more than 25 years, we have specialized in helping investors use their retirement account funds to invest in real estate, private equity, promissory notes and other alternatives. Today, we custody more than $16 billion in assets and we have more than 51,000 client accounts.[2]

Once an investor's PENSCO IRA is opened through an investment platform or a marketplace lender, they'll receive quarterly IRA statements and transactional emails confirming actions, such as initiating a contribution or transfer, or taking a distribution.The platform or marketplace lender can also choose to own the experience and choose to handle the communications directly with their client on behalf of PENSCO.  Depending on the client experience defined by the platform or lender, investors can use the PENSCO Client Portal to view their account, make profile changes, and add or edit beneficiaries as needed.

At PENSCO, we're dedicated to using technology to transform of the IRA industry while keeping our focus on improving the investment experience for retirement investors.

Want to learn how to make Custodian Connect work for you? You can start by checking out our video demonstration then give us a call (855) 453-4960.

This Blog does not provide investment, tax, or legal advice nor does it evaluate, recommend or endorse any advisory firm or investment vehicle. Investments are not FDIC insured and are subject to risk, including the loss of principal.

PENSCO Trust Company performs the duties of an independent custodian of assets for self-directed individual and business retirement accounts and does not provide investment advice, sell investments or offer any tax or legal advice. Clients or potential clients are advised to perform their own due diligence in choosing any investment opportunity as well as selecting any professional to assist them with an investment opportunity.  Alternative investments are not FDIC insured and are subject to risk, including loss of principal.  PENSCO is indirectly affiliated with a registered broker dealer and with a licensed small business investment company through Opus Bank (“Opus Affiliates”).  Other than the Opus Affiliates, PENSCO is not affiliated with any financial professional, investment, investment sponsor, or investment, tax or legal advisor.

[1] If the transfer is not ACATs-eligible we will need a paper request.

[2]Figures as of 12/31/2017