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A Virtual Revolution?

Paperless Self-Directed Investing Takes Crowdfunding and P2P Lending to Warp-Speed for SDIRA and 401(k) Investors.

In today’s fast-paced world where friends, family and colleagues are no more than a Snapchat away, where you can deposit a check via smartphone instead of visiting the bank, it is not surprising that more and more investors are looking to the internet for investment opportunities.

Increasingly, individuals are seeking to control their retirement accounts rather than blindly trusting their financial advisers and the stock market, and this trend has led to a dramatic increase in online investment businesses and firms catering to the independent owner of a self-directed IRA or 401(k).

However, while the investment world has largely kept pace with investors’ rising appetite for virtual investments and speedy capital deployment, the paperwork world has not. In fact, while peer-to-peer (P2P) lending and crowdfunding have skyrocketed in popularity, self-directed investors find themselves dragging far behind the “normal” pace of these new investment venues thanks to outdated paper-based processes and infrastructure that have previously been integral to self-directed IRA and 401(k) management.

IRA Services Trust Company believes that its new ISCP™ technology resolves this timeliness issue for investors once and for all. The technology “allows real-time access to over $12 trillion of capital for the P2P industry,” the company boasts in a recent press release, adding, “Platform investors [will now have] the ability to effortlessly fund their P2P and crowdfunding investments through their 401(k) and IRA accounts.”

Previously, investors have often found themselves stonewalled or, at a minimum, frustrated and delayed by the need for hard-copy paperwork when deploying self-directed retirement funds. This has been a particular issue, noted IRA Services Trust Company, when investors wished to buy notes or make loans using their retirement accounts.

“The lack of automation and integration not only hinders a P2P platform’s ability to scale; it prevents retail investors from maximizing the benefits of tax-deferred P2P investing,” a spokesperson said.

The new ISCP™ technology not only eliminates the need for much, if not all, of this hard-copy paperwork, it also boasts bank-grade security, simplicity of operations and an interface that enables trust custodians and finance platforms to work together online for real-time deployment of investment monies. IRA Services Trust debuted the platform in April 2016 at LendIt USA, where it was dubbed an “industry game-changer” by crowd-finance self-directed IRA expert James Jones. Jones cited the “state-of-the-art, fully digital process” as the key to making “tax-deferred micro alternative investing scale to millions of investors with 401(k) and IRA accounts.”

With any new investment technology, particularly those that enable investors to take investments online or eliminate paperwork, a certain degree of skepticism is always appropriate. However, IRA Services Trust Company does have a sterling record when it comes to cybersecurity, and the company states with confidence that it has “the highest level of information security you’ll find in any of our competitors.” Many finance platforms have already begun integrating the technology into their systems as well.

The financial world today is just as fast-paced, if not more so, than any other sector of our professional or personal lives. If you have a need for speed in your investments, as many real estate investors in particular do, then working with platforms employing the new ISCP™ technology may be an attractive option for you.