Offshore IRA Fees are Low, Guaranteed
I guarantee that Offshore IRA Fees are lower than what you’re paying in the U.S. on a large managed account. Put more succinctly, the cost to manage your large IRA offshore should be less than Fidelity’s “No Fee” IRA or 401(k), less than Prudential’s no and low cost options, and less than any managed account you can name. The larger your IRA, the more you save.
It’s simple: Offshore IRA Fees are fixed. If you manage your own offshore IRA account, you should never need to pay:
- Account Fees
- Brokerage Commissions
- Management Fees
- Investment Commissions
- Hidden Fees, or
- Be locked in to only those investments your provider approves.
When you sign up for the “no fee” IRA with most providers, you still get hit with all types of commissions and hidden fees. Even worse, you are only allowed to invest in those products offered by your provider.
That provider is probably charging you a fee to make the investment and making a lot more on the back-end on commissions from the fund you’re invested in. Plus, they often add on low balance fees, short term trading fees and account closing fees.
The typical fee structure on many investment funds is 2/20. Your provider earns 2% per year on money in his fund, plus 20% on the appreciation of the assets in the fund. If you’re lucky, there is a hurdle rate so they only earn this 20% on earnings over LIBOR, U.S. inflation, or some other benchmark like U.S. Treasuries. If they place you in someone else’s fund, they might earn a 50% commission, so 1%/10%. Obviously, they direct you to their branded products.
So, for a “free” IRA, you could be paying a 1% fee to manage your money, brokerage and trading fees on each transaction, 2% on your money placed in their fund, plus they are earning 20% for the use of your money on the back-end.
No wonder IRAs have such dismal returns. By comparison, Offshore IRA Fees are minimal. If you take your IRA offshore with us, costs should be as follows:
- $2,995 to form the offshore LLC, open the offshore bank account, and draft the operating agreement.
- The custodian we use most often charges $250 to open the account and about $550 per year.
- Second year fees on your offshore IRA LLC should be around $650.
Note: Estimates are as of June 15, 2014 and subject to change without notice. I have not considered bank or wire fees in either the onshore or offshore examples above, but you can assume they are higher offshore. If you have multiple IRAs, fees from your custodian may be higher. Your formation fee remains the same ($2,995) because you may place multiple accounts in to a single offshore IRA LLC.
These fees don’t go up as our IRA gets larger. Your Offshore IRA Fees are fixed, regardless of the size of your account.
You can take control of your retirement account, fix your Offshore IRA Fees at about $1,200 per year (year 2), and eliminate all commissions and hidden charges.
For information on how to take our IRA offshore and control your Offshore IRA Fees, please call or email us at info@premieroffshore.com for a confidential consultation. We are experts in the offshore IRA and will be happy to work with you.
