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Can You Still Use a Financial Advisor if You Own a Self-Directed IRA?

When it comes to understanding self-directed IRA pros and cons, a specific industry, or investment opportunity, financial advisors have a wealth of knowledge from in-depth training and hands-on experience. For a self-directed investor, this expertise and experience can be a huge asset. But when should you reach out to your investment advisor and how might they be able to assist you? Keep reading to find out.

The Key to Success is Experience & Knowledge

To make the most of your self-directed IRA, you need to have some level of expertise and comfort in the industry and enterprise in which you’re investing. Whether the investment is a rental property or precious metal, this experience and knowledge will help you to weigh the self-directed IRA pros and cons as well as the work of managing your investment. With patience and time, you can gain the inside knowledge required to manage your self-directed IRA investments through careful online research or professional networking.

Understanding the time and financial demands that come with a self-directed investment is key to knowing whether it will be a good investment for your financial goals and lifestyle. For example, if you don’t have any real estate experience and aren’t interested in the day-to-day of real estate ownership, then purchasing a rental property with your self-directed IRA may not be the best option for you.

Talk to Your Advisor About Your Self-Directed Investment

Investing in a self-directed IRA means that you have full control (and full responsibility) of your account. It also means not having the opportunity to pick the brain of an expert for counsel and recommendations. That’s why it might be a good idea to talk to your investment advisor before making a self-directed investment.

Many investment advisors manage a large portion of their client’s wealth. If you’re interested in diversifying your portfolio with a self-directed investment, your investment advisor may be able to help you find the right investment for your experience level and even help you weigh self-directed IRA pros and cons and gain a better understanding of the actual process of making an investment using a self-directed IRA.

If your investment advisor doesn’t have the ability to assist you with your self-directed IRA, they’ll more than likely be able to point you in the right direction. As an investment expert, your advisor will be able to provide you with valuable insight and recommendations. You’re probably not the first client who’s inquired about self-directed investments. Leaning on their expertise, especially as it pertains to your specific portfolio, will allow you to compliment your traditional investments with other non-traditional (self-directed) investments.

It’s important to remember that your financial advisor is your advocate and wants to see you succeed and ultimately reach your retirement goals. Unfortunately, too many self-directed investors hide their self-directed investments (or desire to pursue) from their financial advisor for a variety of reasons, including:

  • Being advised against self-directed investing because the advisor won’t be making a commission.
  • Being laughed at for considering a self-directed investment.
  • Fear of hurting the feelings of their advisor.
  • Fear of being dropped as a client for working outside the umbrella of the advisor or firm.

At the end of the day, it’s your money to invest as you see fit. Your financial advisor is going to do their job and help you make smart investments which further your goals. They are, however, limited in the types of investments they’re able to make on your behalf. So, if you’re truly interested in pursuing a self-directed investment, include your financial advisor as part of that conversation. If your relationship is a strong one, and they’re sincerely looking out for your financial best interest, they’ll be more than willing to help you find the resources needed to make it happen.

Learn More About Self-Directed Investing

Whether you plan to work with an investment advisor, go it alone, or use a combination of both, the team at iPlanGroup is here to assist you. Talk to your advisor, then schedule a FREE 30-minute IRA strategy session to learn more about what a self-directed IRA can do for your financial future.

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