Private investments vs. marketable securities in IRAs


The main difference between an IRA that allows private investments vs. marketable securities the financial services firm where you open your IRA. Large-scale IRA providers like brokerage firms, banks, or insurance companies are in the business of selling marketable securities and have found it counterproductive to their business models to allow individuals to own private investments in their IRAs. This is because private investments require additional paperwork. By going with smaller, self-directed IRA administrators it is possible to hold private investments in your IRA. Here, we take a look at the difference between IRAs that only allow marketable securities and those that allow private investments. 

Video transcript:

Hi I’m Joe, Founder of WealthFlex. In this video, we’ll discuss whether there’s a difference between an IRA that you can invest in marketable securities and one that you can invest in private investments.

There is no special designated type of IRA that allows you to invest in private investments.  However, there are different types of IRAs with different sets of rules, such as Traditional, Roth, SEP, Simple, Rollover, and Inherited IRAs. But an IRA that holds a private investment can be any one of these. The difference is this, does the company your particular IRA is at allow private investments? If you’re at a brokerage firm, bank, or insurance company, that answer is most likely no. At Yieldstreet, however, our IRAs certainly allow it

Brokers, banks, and insurance companies will only allow you to participate in marketable securities such as stocks, bonds, mutual funds, and other securities traded on exchanges. This is because private investments haven’t proven to be a scalable or profitable business to be involved in for them. Private investments are also more cumbersome to custody because of their nature of being non-standardized, and sometimes involving paper contracts. 

Yieldstreet, however, has established processes to handle this. Check out our video on what you can and can’t do with your IRA, as well as our video on why your brokerage account doesn’t allow private investments

Learn more about how you can take retirement planning to the next level with a Yieldstreet IRA. Contact us at [email protected] with any questions.

Yieldstreet cannot provide tax advice, so please consult a tax professional for advice specific to your situation. 

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness, or any other aspect of such website (or article contained therein).

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