3.5-star brokerage rating

Midland IRA Review

2020 Midland self directed Roth IRA review, Traditional IRA, 401k Rollover, SEP and SIMPLE IRA. Midland retirement accounts fees, rating, minimums, commissions, pros and cons.

Midland Self-Directed IRA

If you've opened a conventional IRA account at a brokerage or mutual fund company (such as M1 Finance or Ally Invest), you might have taken for granted the process' relative ease. A self-directed IRA is a horse of another color. It requires at least two accounts and a number of rather steep fees. To see why, it's necessary to understand how a self-directed IRA differs from the conventional variety.

Self-Directed IRAs

You open a self-directed IRA when you want to trade assets beyond the vanilla investments of stocks, bonds, mutual funds and ETFs within a tax-sheltered account. In a self-directed IRA, you call all the shots -- you can trade any instrument, asset and contract as long as it's allowed by the regulations governing IRAs. That means your IRA can own futures, Forex, commodities, real estate, private equity, promissory notes, liens, energy unit trusts, mineral rights contracts, master limited partnerships and much more. Only two types of assets are forbidden:

1. Collectibles, with the exception of certain types of precious metal coins and bars

2. Life insurance policies

Like the conventional variety, self-directed IRAs must be administered by an approved custodian who is responsible for overseeing certain rules, including:

  • Ensuring you don't contribute more than the amount limited by law
  • Ensuring you begin taking distributions after age 70 1/2
  • Providing tax information to you and the IRS
  • If your IRA owns precious metals, ensuring that they are physically maintained by a third party at a separate location

The custodian of a self-directed IRA does not advise you on your investments.

The Accounts

You will need at least two or three accounts to perform trading within your self-directed IRA:

1. The Custodial Account: This is the role filled by Midland IRA. The custodian accepts contributions, handles distributions and rollovers, provides account information and issues tax reporting.

2. Trading Accounts: You direct the custodian to send money to one or more trading companies that are responsible for funding your trades. For example, if you trade futures contracts, Midland will work with a company like Dorman Trading, which acts as a clearing firm for your brokerage account(s). You direct Midland to send a specified amount of money to the trading company, which you then use to fund your trading activity. On every day in which you have trading activity, the trading company will send you a statement (usually via email) that details your trades and your new balance.

3. Brokerage Account: You will usually also need a brokerage account. For example, if you trade futures, you might have a futures account at NinjaTrader, where you actually place your orders. The brokerage account provides the trading platform you use to evaluate and place trades. The trading account is usually the clearing firm for the brokerage account.

Using a Midland IRA Account

Midland IRA uses DocuSign for handling online forms. Of course, you are free to use the paper variety if you prefer, but that will slow down the process. The initial form is, naturally, the application, in which you give all the identifying information and indicate what type of account you want -- Midland handles Forex/futures/commodity accounts as well as conventional brokerage accounts. You'll be charged various fees amounting to $345 to establish the Midland account -- make sure you pay this fee with non-IRA money! You can register a credit card with Midland to pay for your fees. You can request a traditional or a Roth IRA. If you plan to roll over IRA money from another account, you'll also need to fill out a trustee-to-trustee transfer form. You'll also need to set up your trading/brokerage accounts, each of which requires paperwork and fees.

Once the money has settled in the Midland account, you fill out a Trading Account Purchase Authorization in which you transfer money to the trading account. You must leave at least $250 in the Midland account, because that's what they charge to close the account. The fee for transferring money to your trading account is $50 -- once again, make sure you pay the fee with non-IRA money. Once the transferred money settles in the trading account, you can start placing trades in the brokerage/futures account linked to the trading account.

Cut Hidden IRA Fees

Cut hidden investment fees by 66% and get unlimited access to a financial advisor.

Open Blooom Account

The Online Portal

The Midland IRA customer portal can be used it to request forms and access/download certain data items, including:

  • Account balance
  • Deposits
  • Contributions
  • Investments
  • Bill payments
  • Last known account values

The transactions it shows are the cash flows between you and Midland on the one hand, and between Midland and the trading company on the other. The trading company statements will give you the specifics of your trades and balances -- Midland updates its balance information monthly. If you want quarterly or annual statements on paper, you'll have to cough up $5 for each one.


Continue Reading