My number one red flag when researching any product or service is whether or not they clearly display their pricing and fees up-front. If you have to speak to someone to find out what it will cost you, the odds are you will pay too much.
iTrustCapital is not the first company to offer Cryptocurrencies in IRAs. There is a hand full of companies that offer some variation of this service. The ‘turn-key’ Bitcoin IRA options all seem to have one thing in common…High Fees, which of course, most do not publish on their websites. The majority of these companies are sales-focused, not client-focused, intending to make as much money on each customer as possible. The objective is to get people to enter their information to receive a ‘Free Guide’ or some other kind of give away. If this sounds familiar, it is because it is a standard tactic to generate leads for many sales organizations.
Once you enter your name, phone number, and email, your info is funneled to their commissioned sales reps to begin the calling and emailing process. They want to talk to you and “sell you” before going over the fees. Until iTrustCapital’s IRA platform was launched in July of last year, it was the norm to charge 10%+ to add cryptocurrency to an IRA in a turn-key model. What’s also interesting is almost none of these companies offer a 24/7 investment platform like iTrustCapital. You actually have to call in during business hours and make transactions over the phone. This brings to mind that classic movie, Wall Street, which was made back in 1987. Reminder, it’s now 2020.
There is an exception that, like iTrustCapital, has an online platform. I won’t say their name, but it’s easy to find them. This company recently did a press release announcing they had lowered their fees by 25%. Before this reduction, they charged fees up to 15% for a single transaction. So a 25% reduction doesn’t sound that great of a deal to me, and the fact that they DO NOT post their fee schedule on their homepage makes me think that they don’t think it’s that great of a deal either. Also, look out for the low yearly rate based on a 5-year hold front-loaded pitch. This sales tactic has been used for a long time to sell products with high fees and argues that averaged out over many years, it’s not that bad.
This same company states on its website that they are the ‘only 24/7 self-trading crypto IRA platform in the world’. This statement is obviously not true; they are fully aware of iTrustCapital, especially considering multiple clients have moved their accounts from them to iTrust. And by the way, IRAs are only available in the U.S., so adding the phrase ‘in the world’ to the statement is completely pointless.
There are other questionable tactics like saying ‘Open a Free Account’ and below that ‘Start Investing Today.’ Yes, to open an account on their site, like ours, is free, but to start investing you will need to fund your account, and there are definitely fees to do so. I can keep going, but I think I’ve made my point.
For the Digital Asset space to grow, there must be easy, transparent, and safe ways for the masses to participate. High fees and old school sales tactics will only scare new people away and delay mass adoption.