Author Topic: Alto Alternative IRA  (Read 196 times)

jameslend

  • Newbie
  • *
  • Posts: 35
    • View Profile
    • Email
Alto Alternative IRA
« on: April 08, 2021, 02:22:33 AM »
I guess this was inevitable. I had hoped they would cover at least until the loans matured, but I guess not...

Communication seems poor. Changing terms and sending an email 6 days _after_ the policy change.

============


Now that we’ve officially become a one-of-a-kind marketplace bank, we’re excited to announce that we’ve established a new preferred custodian—Alto Solutions, Inc. (Alto)—which will enable you to easily invest your IRA beyond LendingClub Notes.

To celebrate our partnership, Alto is offering new custodial accounts to our investors with no account fees for the first year (valued at $100).

•   You will be responsible for all account fees going forward. LendingClub has historically covered your annual account fee. As part of establishing a preferred custodian, as of April 1, 2021, we will no longer pay annual fees to your current custodian. You may want to check your custodial account agreement to be sure you understand your obligations to pay annual account fees and any transaction-based fees.
•   You may be required to manually fill out additional paperwork to invest. You may want to check your custodial account agreement to be sure you understand the requirements for investing the cash in your current LendingClub IRA account as well as investment options.

JRubin84

  • Newbie
  • *
  • Posts: 2
    • View Profile
Re: Alto Alternative IRA
« Reply #1 on: April 08, 2021, 07:22:05 AM »
I can't figure out if making this transfer will force us to pay an account closing fee to STRATA Trust.  I just find the idea of paying a fee to close an account absolutely absurd.

nickclin

  • Newbie
  • *
  • Posts: 2
    • View Profile
Re: Alto Alternative IRA
« Reply #2 on: April 08, 2021, 09:10:04 AM »
From a strictly business standpoint, it makes no sense for LC to have retail customers switch to another IRA custodian. They clearly have no intention of keeping or building a retail base, so they'de be better off cutting us loose and let us eat the custodian fee without bothering with an alternative. Having ties with an IRA custodian has no value to them.
I think what happened is that a business manager at LC saw the hit to the bottom line coming from the fee expense, wanted to cut it, but their compliance & legal department said something like "you can't stop paying the fee when all our marketing material states that we'll cover it as long as the account value is over $10k". So they came up with this alternative, hoping that if customers voluntarily switch over to the new provider, it would void any commitment they made for legacy IRAs.
It probably won't take much of a legal push to get LC to reverse their position.

rj2

  • Full Member
  • ***
  • Posts: 106
    • View Profile
Re: Alto Alternative IRA
« Reply #3 on: April 08, 2021, 02:26:01 PM »
It's pretty clear they think they have found a win/win for them.

#1 - they probably collected a referral fee from Alta for selling them a book of business
#2 - they now have an excuse not to reimburse anyone's annual fee

We're getting absolutely screwed, and since they have no intention to keep any kind of retail base, they just don't care.
« Last Edit: April 08, 2021, 02:30:11 PM by rj2 »

rj2

  • Full Member
  • ***
  • Posts: 106
    • View Profile
Re: Alto Alternative IRA
« Reply #4 on: April 08, 2021, 02:28:01 PM »
I can't figure out if making this transfer will force us to pay an account closing fee to STRATA Trust.  I just find the idea of paying a fee to close an account absolutely absurd.

It's impossible to know what kind of fees you will face with Alta. Potentially you pay a fee to STRATA to move your account to Alta, and then you pay lots of fees to Alta, and then another fee to close your Alta account.

This looks like a way to maximize the amount of fees we pay.

jameslend

  • Newbie
  • *
  • Posts: 35
    • View Profile
    • Email
Re: Alto Alternative IRA
« Reply #5 on: April 08, 2021, 08:20:59 PM »
From a strictly business standpoint, it makes no sense for LC to have retail customers switch to another IRA custodian. They clearly have no intention of keeping or building a retail base, so they'de be better off cutting us loose and let us eat the custodian fee without bothering with an alternative. Having ties with an IRA custodian has no value to them.
I think what happened is that a business manager at LC saw the hit to the bottom line coming from the fee expense, wanted to cut it, but their compliance & legal department said something like "you can't stop paying the fee when all our marketing material states that we'll cover it as long as the account value is over $10k". So they came up with this alternative, hoping that if customers voluntarily switch over to the new provider, it would void any commitment they made for legacy IRAs.
It probably won't take much of a legal push to get LC to reverse their position.

I don't think the voluntarily switching has anything to do with it. Pretty sure all the marketing materials are gone. They are no longer paying fees for any self directed ira's. The Alta ones seems to be promotional only for the first year.

nickclin

  • Newbie
  • *
  • Posts: 2
    • View Profile
Re: Alto Alternative IRA
« Reply #6 on: April 10, 2021, 05:14:25 AM »
No it's still there and it's pretty clear about fees, with no expiration date. I've never been charged IRA fees, but if I do I'll email them a print out of this link. In my experience it's hard for corporations to wiggle their way out of this.
https://www.lendingclub.com/site/static/IRA%20Fee%20Schedule%20-%20LendingClub.pdf



I don't think the voluntarily switching has anything to do with it. Pretty sure all the marketing materials are gone. They are no longer paying fees for any self directed ira's. The Alta ones seems to be promotional only for the first year.

jameslend

  • Newbie
  • *
  • Posts: 35
    • View Profile
    • Email
Re: Alto Alternative IRA
« Reply #7 on: April 10, 2021, 01:29:05 PM »
No it's still there and it's pretty clear about fees, with no expiration date. I've never been charged IRA fees, but if I do I'll email them a print out of this link. In my experience it's hard for corporations to wiggle their way out of this.
https://www.lendingclub.com/site/static/IRA%20Fee%20Schedule%20-%20LendingClub.pdf



I don't think the voluntarily switching has anything to do with it. Pretty sure all the marketing materials are gone. They are no longer paying fees for any self directed ira's. The Alta ones seems to be promotional only for the first year.

ok well let us know how is goes. I'm pretty sure the email will trump that posted pdf. And if you DO email them, it'll just prompt them to remove it I'd guess.

rj2

  • Full Member
  • ***
  • Posts: 106
    • View Profile
Re: Alto Alternative IRA
« Reply #8 on: April 12, 2021, 12:16:57 AM »
The catch is "$10,000 invested in Lending Club notes" - it's impossible to run down your portfolio without spending several years where you won't qualify. You might have it in cash in the account, or in your Strata account, or whatever, but you won't qualify because it won't be in notes, and they have PREVENTED you from having it in notes.

I also have a question about the $150 account termination fee.... since they are the ones forcing me to terminate my account, why should I pay that?

jameslend

  • Newbie
  • *
  • Posts: 35
    • View Profile
    • Email
Re: Alto Alternative IRA
« Reply #9 on: April 13, 2021, 12:58:08 PM »
The catch is "$10,000 invested in Lending Club notes" - it's impossible to run down your portfolio without spending several years where you won't qualify. You might have it in cash in the account, or in your Strata account, or whatever, but you won't qualify because it won't be in notes, and they have PREVENTED you from having it in notes.

I also have a question about the $150 account termination fee.... since they are the ones forcing me to terminate my account, why should I pay that?

since they are discontinuing the reimbursement, the 10k threshold is no longer relevant.

the termination fee is from the ira, so technically they are not forcing you to close the ira, just lending club account once your notes mature.