Can an outside source (e.g., individual IRA account holder) pay miscellaneous “wrap” fees related to his/her IRA or other type account?

Well, first, what are “wrap” fees?

It is not meant to be an all-inclusive definition, but such fees can include transaction costs, broker’s fees and commissions, financial planning, investment advice and even discretionary account management activities.

Well, good question!

While this question isn’t exclusively intended for self-directed plans (e.g., IRAs), it is a very common question that people ask when establishing a self-directed plan. Typically, it comes up when they are paying a one-time fee or many account related fees and they ask if the IRA has to pay for the fees or can they as individuals. This is especially true with Roth IRA accounts, as just by the very nature of the account the account holder will want to keep as many Roth dollars in the account as possible. [Read more...]

Probably for anyone who has ever participated in a “traditional” 401K plan at their company OR are participating in a self-directed 401K, they know that 401K plan documents typically provide participants the ability to take out loan provisions from the plan. As a quick overview, typically such loans must be paid back based on the following IRS regulations:

1) The loan cannot exceed 5 years;

2) the loan must be secured in some manner;

3) amortized loan principal and interest must be paid in nothing less (or longer) than on a quarterly basis; and,

4) the loan must be repaid with a “reasonable amount of interest.” [Read more...]