Expert: Paul Henneman - 3/10/2005

Question
I am looking for an institution that offers something in the way of a custodial account for a self-directed IRA. My desire would be to be able to direct funds from the account to purchase stocks that I would like to hold in a Roth IRA. These stocks would be purchased directly from the company rather than through any sort of broker. I know that there plenty of places that offer such accounts but I am wanting to keep fees to an absolute minimum. Can you recommend any institutions that would fit what I am describing?

Answer
Will,
  Thank you for your question! I have one solution: www.FOLIOfn.com
  I think this service is perfect for you. It is unique in that they have a program where you can hold a basket of stocks for a flat fee of $19.95 per month. You can buy or sell the stocks in your portfolio as much as you like for that flat fee. You can hold up to 50 stocks at any time.
  How can they do this is usually the next question. FOLIOfn does what is called 'basket trading'. That means they save up all buy and sell requests from their users and conduct all them twice a day, at 11am and 2pm. This means they get huge bulk trading rate discounts, which is passed on in terms of such favorable trading fees to users. It is true that if you request to sell a stock in your Roth IRA at 8pm, it will not actually be done until 11am the next morning. This is delay is often caused 'slippage' and in the case of FOLIOfn, it can be several hours long. I believe this is ok. Unless you are day trading, it is relatively unimportant if you get an 8 am price or 11 am price. Sometimes the stock prices moves in your favor anyway, so this largely cancels out.
  Based on your description, I think it is a perfect service and strongly recommend that you investigate.

I hope this helps! Please do not hesitate to follow up with me if I can be of any further service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
www.VEInstitutional.com
www.VEReports.com
(800) 381-5576