Back to Blog
The security of an IRA depends on a variety of factors, and whether an IRA held at a traditional custodian or brokerage is more secure than one held at a self-directed IRA (SDIRA) custodian can depend on the specific custodians in question.
In general, traditional custodians or brokerages are more established and have more resources to devote to security measures, such as fraud detection and prevention, secure data storage, and cyberattack prevention. They are also typically subject to more regulatory oversight and scrutiny, which can help ensure that they comply with industry best practices and standards.
On the other hand, SDIRA custodians that specialize in alternative asset management may have more experience and expertise in managing certain types of alternative investments, such as real estate or private equity. Additionally, some investors may feel more comfortable with the greater control and flexibility offered by a self-directed IRA and may be willing to accept slightly higher risks in exchange for potentially higher returns.
Ultimately, the security of an IRA depends on a variety of factors, including the strength and reputation of the custodian, the specific security measures in place, and the diligence of the investor in monitoring and managing their investments. It’s important for investors to thoroughly research and evaluate any custodian they are considering, and to carefully review the custodial agreement and related documents to understand the risks, fees, and other terms associated with their IRA.
