Raise Capital Using Investors’ Retirement Accounts
Equity Institutional Services opens opportunities in the alternative investment market and makes investing easy.
OVERVIEW
Equity Institutional Services works with issuers to offer their investors a seamless, hassle-free process for placing investments through tax-advantaged retirement accounts. Formerly Midland Trust, we still offer the same best-in-class services tailored to investment sponsors, now with additional resources as part of the Equity family of companies.
Work with the team named Best Private Equity Custodian by Forbes Advisor.
Why Retirement Accounts for Capital Raise?
- They typically account for the majority of an investor’s investable capital
- They allow current investors to reinvest with an added source of capital
- Tax-advantaged returns can lead to significant tax savings
- IRAs offer an opportunity to invest in markets investors know well and may not have access to otherwise
The Equity Institutional Services Advantage
Customer Service
You and your clients work with our dedicated, specialized service team. We do not use a call center, so you speak directly to your contact or other knowledgeable members of their team. Your firm will be handled by staff that know you, your investment, and your clients.
Annual Deadline
We proactively request these values from you to update Equity Trust investor holdings. Clients are automatically notified of updates, which reflect directly in their client portal.
Consistent Process
We allocate any distributions with just one wire and instructions from you. Our process is transparent and we make sure you always know where your client(s) are in the funding process. Plus, you'll get the fastest processing time in the industry. Investments are processed one business day after receipt of retirement funds and completed investment paperwork.
Advanced Technology
For some investments, clients can apply using Equity OnePath. OnePath is the most powerful online investment tool in the industry. You send us your paperwork, then we set up your asset on our platform. Clients complete the application and investment packet at the same time. This simplifies the investment process for you and your clients.
Complimentary Services
Private Fund Custody
According to the SEC, Registered Investment Advisors who have custody of their clients’ funds or securities must safeguard those funds. Equity Trust Company is a qualified custodian that offers this service to private funds and organizations. Equity Trust offers two levels of custody services:
Full Custody: Equity Trust will take custody of assets and cash, process all new purchases/liquidations, monitor all incoming and outgoing payments, and provide fund-level statements to all investors of the Fund.
Document Custody: Equity Trust will take physical custody of original documents.
Custodial Accounts
Investment accounts for taxable money. Taxable money includes personal savings, corporate savings, or trust funds. These account types allow investors to buy and sell alternative investments. Types of custodial accounts offered at Equity Trust include:
-
-
- Individual
- Trust
- Joint
- Joint Tenants with Rights of Survivorship (JTWROS)
- Tenants in Common (TIC)
- Tenants by Entirety (TBE)
-
Process & Timeline for Financial Professionals and Clients
There is no cost to the investment sponsor and financial professionals to use Equity Trust as the custodian. Set-up is done once for each fund and the IRA investor pays the administrative fees.
STEP 1: ASSET REVIEW PROCESS
Identify an investment. Equity Institutional Services reviews the asset before accepting custody to determine if we can meet the obligations and administrative responsibilities of the investment. We do not evaluate, perform due diligence, or do other assessments on the asset or sponsor. To get started, please have the Investment Sponsor or Fund Manager complete our Onboarding Form.
STEP 2: OPEN AND FUND AN EQUITY TRUST ACCOUNT
Investors open an Equity Trust account by completing our online application. Accounts can be funded via transfer, rollover, or contribution. They can do this by completing the appropriate form found here.
STEP 3: COMPLETE INVESTMENT PAPERWORK
A Subscription Agreement will be presented in a turn-key electronic package via Docusign with the purchase authorization form. Investors must review and sign. Once Equity Institutional Services receives a receipt of retirement funds and the investor-approved subscription documents, the investor is placed into their fund.
The Timeline for Investors
OPEN AN ACCOUNT
Account setup with Equity Institutional Services can be done quickly online – 15 minutes.
FUND THE ACCOUNT
The transfer/rollover process typically takes about 2 weeks.
ASSET REVIEW PROCESS
This step typically takes 1-2 days once our Onboarding Form is completed and the necessary documents are received.
SUBSCRIPTION AGREEMENT
Investments can be executed next-day from receipt of executed investment docs & available cash (assuming 7 day right of rescission has paused).
New Accounts
|
Action |
Who Does It? |
How Long Does It Take? |
|---|---|---|
|
Send Investment Paperwork |
Investment Firm |
Minutes |
|
Set up Investment on Platform |
Equity Institutional Services |
One Day |
|
Complete Account Application |
Investor |
One Day |
|
Sign Application |
Investor |
One Day |
|
Complete Transfer Application |
Investor |
|
|
Transfer Funds |
Old Custodian / Equity |
Variable |
|
Fund Investment |
Equity Institutional Services |
24-48 Hours |
Additional Funding
|
Action |
Who Does It? |
How Long Does It Take? |
|---|---|---|
|
Complete Transfer Application |
Investor |
|
|
Transfer Funds |
Old Custodian / Equity |
Variable |
|
Fund Investment |
Equity Trust |
24-48 Hours |
What Can Slow the Investment Process for Financial Professionals?
- The account where the client is transferring funds from is not liquid.
- The plan the client chooses to use for the investment is not portable to another custodian. Have the client confirm that a rollover of the account is possible.
Types of Portable Accounts
In general, defined contribution plans are portable. Defined benefit plans (pension plans) and flexible spending accounts are not portable. Many employers won’t allow an account to rollover if the employee is still employed by the plan sponsor. There are exceptions, so it is best to ask the plan sponsor.
Individual Retirement Account (IRA)
If a client has an established IRA, it can transfer to Equity Trust. An Equity Trust account can then fund alternative investments.
401(k) and 403(b)
401(k) plans are also known as an Individual 401(k) or Solo 401(k). These retirement plans provide the same profit-sharing advantages as a typical 401(k) with less complexity and lower costs.
403(b) plans are like 401(k)s. Public schools and certain types of non-profit organizations (501(c)(3)s) offer these plans.
Both of these plans can rollover into an Equity Trust account. Often, that depends on whether the account owner is still employed by the plan sponsor. The account owner should check with the employer about rollovers if still employed by the plan provider.
Savings Incentive Match Plan for Employees (SIMPLE)
SIMPLE plans allow contributions from the employer and the employee. These plans can rollover, except for Roth IRAs. However, if it is within the first two years of the owner’s first participation, money can only transfer to another SIMPLE IRA. After the 2-year period, they can transfer to other types of non-Roth IRAs.
Simplified Employee Pension (SEP)
A SEP is similar to a Traditional IRA in that a rollover from trustee to trustee can happen at any time.
Health Savings Account (HSA)
HSAs allow for contributions from the employer and employee. These contributions can transfer or rollover into another like account.
Get Started
If you have any questions or would like to connect with our team, complete the form below or schedule a 1-1 consultation.