Statement Check-up!

February 04, 2021

Let’s be honest, when was the last time you looked at the financial statement associated with your retirement account? If you’re like most people, you probably throw it in the “round” file not to be thought of again until the next one arrives. Just like a blood test can provide your doctor information about your overall health and well-being, your financial statement provides critical information about the state of your retirement accounts – and we’re not just talking about the return on investment (ROI). It’s time to fish those statements out of the recycle bin and put them under the microscope! What you will find may surprise you.

What specific information should you be reviewing or looking for?

  1. Are the investment assets titled correctly?
  2. Have incoming funds been allocated properly?
  3. Is the Fair Market Value of each investment correctly reflected in the holdings?
  4. Have fees been assessed appropriately?

Investments should be titled as they are officially documented by the investment sponsor. It is important to verify that all your investments are included in the holdings portion of the statement and that there are no assets listed that you have not authorized the investment. It is important to notify the Custodian/Financial institution as soon as possible if you do not recognize an investment or if you determine that one or more investments that you did authorize are missing from the statement. Investments should be grouped by investment type for example, Trust Deed Notes, real property and/or precious metals.

Incoming funds such as interest payments, principal payoffs or rental income should be tied to a specific investment. Be sure to verify that all incoming funds are being deposited in to your account as agreed upon with the investment sponsor or property manager. Ask yourself, am I earning the correct amount of interest and is it being posted to my account in a timely manner by the Custodian? Are there any payments missing? Are principal payoffs being applied to the correct asset and is the value of the asset being adjusted accordingly?

The value of your account is reported to the IRS each year on tax Form 5498. Not only is the total value of the assets disclosed but the asset type is reflected on the form.  It is important to confirm that any fair market valuations submitted to the Custodian/Financial institution have been received and the asset values have been adjusted accordingly.

Some Custodians assess their fees based on the total account value including cash and assets. If the value of your account is inflated you could potentially be paying more in fees then agreed upon when you opened your account. Are you being charged a fee per each transaction and have those fees been disclosed to you? Do the fees you have been charged tie back to a specific transaction?

A monthly review of the financial statements associated with your retirement account may uncover a plethora of information. Be diligent, review your statements and report any discrepancies to your Custodian/Financial institution right away!


Contact Us