Can I use my IRA for investing in RegA+


Oscar Jofre

CEO and Co-Founder


Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Joel Steinmetz

Co-founder & COO

Rialto Markets

Joel Steinmetz

Co-founder & COO

Joel Steinmetz brings more than 20 years of financial services experience to the Rialto team. Joel has led efforts in building trading platforms, algorithmic systems, as well as new businesses while at Citi, Citadel, Instinet and Liquidnet. He has been involved in numerous transactions in capital markets at Citi and Instinet, and has performed deal flow analysis, structuring, and strategic integration. His experience spans the universe of business strategy, data analysis, and technology. Recognizing the obstacles for issuers and investors in the private placement market, Joel saw an opportunity to leverage the founding team’s collective experience to bring efficiency to inefficient markets, inspiring him to co-found Rialto.

Bill Humphrey

CEO and Co-Founder

New Direction Trust

Bill Humphrey

CEO and Co-Founder

Bill is recognized in the industry as an expert in self-directed IRAs, HSAs, and other tax-advantaged accounts, as well as the IRS codes pertaining to these investments. Bill has taught courses on retirement plan investment rules to investors, CPAs, and investment professionals through a variety of venues, including the University of Denver’s School of Law. An experienced Certified Public Accountant, Bill has focused on income tax, auditing, tax-related real estate issues, and forensic accounting for more than 20 years. Bill is well versed in IRA law and is current with all legislation governing tax-advantaged plans. Bill has served as a consultant to HSA platform providers, and is a leader in promoting the idea of investing HSA assets long term for medical costs in retirement. He has been involved in real estate investment and has assisted in developing the framework for debt-leveraged IRA real estate investment. Bill received his Bachelor of Science degree in Business from the University of North Carolina, Chapel Hill, with a concentration in accounting and computer science. He rounded out his technical background with graduate study in finance, accounting, and economics at the University of Colorado, Boulder.

Oscar Jofre  00:13

All right, well welcome everyone in Good afternoon and welcome to an amazing, that’s right, happy new year senior quiet low everyone around the world, celebrating chinese new year, the year the ark. So today we’re here for the KoreSummit webinar series 2021. And my name is Oscar Jofre, we have some great panelists here this afternoon, to have a really interesting discussion about the three magical letters IRA. So as always, you know, the format, we do one hour of chit chatting, having a conversation with experts thought leaders that know the subject matter, I’m going to ask the questions. So they will I mean, it really is a it’s up to them. And we will converse in of course, will give you an opportunity during the session as well to put your hand up, and we’ll answer any of your questions. All these webinars, of course, are available on our website at, or our YouTube channel at KoreConX. So I’m excited today, because throughout the series of this webinar series, we’re having different discussions in different areas. And you know, everybody talks about, oh, there’s payment methods, this is in that in IRA. And that’s where we leave it. Well, if everybody knows me, I like to dig in deep and try to get into the to the weeds of it, because it’s in the weeds that really matters. Well, there were there, this is a solution. And we believe it is and I brought two great panelists today. Because this is in order to make this happen. It does take a team effort, nothing is done by one party. And I’m really excited to introduce you to Mr. Bill Humphrey on president ceo of new direction products. I wanted to do that for you, Bill, because it you know, you really stand out above the crowd, you are the individual that in my view, based on the many conversations I’ve had with others that truly, you know, one day, they’ll recognize you as that, because your industry has been kind of well, we’ll have that conversation. So before we get started, why don’t you take a minute to introduce yourself with your firm, guys. And obviously, we’ll introduce our next guest as well, please.

Bill Humphrey  02:26

Alright, well, thanks, Oscar, and Happy New Year to you as well. We we had New Direction are a custody provider. So what does that mean? Why do you want custody? Well, every IRA has a custodian somewhere in the background, sometimes are more visible than others. But with us, what we’re after is providing access to as many investment opportunities as you, the investor want to have access to. So very different from fidelity and Schwab, because we’ve opened the doors to things like RegA investments inside your IRA that we’ll be talking about quite a bit. We started in 2003, because we discovered that lo and behold, you could have real estate was topic of the day in your IRA, but we had to find a custodian to do it. And we found there weren’t many. So we started our own. And now 17 years later, we have almost 3 billion in assets and staff of about 70 people back in our office and Lewisville, Colorado. And Oscar. I think that sort of enough to get started.

Oscar Jofre  03:39

Well, I thought maybe that was it. Joel, you got anything to add to that? I don’t know.

Joel Steinmetz  03:46

I’m just I’m just listening. I’m just listening to bill. It’s falling,

Oscar Jofre  03:52

falling asleep and the floor is yours, sir.

Joel Steinmetz  03:55

So my name is Joel Steinmetz, I’m the CEO of Rialto Trading. We founded the company a little under five years ago, and are a broker dealer and a an ATS and alternative trading system specifically focused on private securities, any kind of private securities but specifically focused on private securities, RegA, reg D reg s reg CF. And we work with a lot of different companies on both the structure as well as the assets in order to assure that we can get the widest audience possible to be able to have the widest amount of investments to be made. And we’re trying to get alternative assets within the private space under regulated format in order to benefit everybody. One of the things that in full disclosure that excites us about working with places like new direction is I just described the idea of getting more users Getting more assets. What new direction we think brings to the table is the ability to get it to have those things done in new ways, not just a standard, well, I’m going to call up my broker and buy, where I’m going to go into a system and sell, but rather be able to use different tools in order to be able to get into the investment universe. And that’s what we think is very exciting in the interchange of the private securities ecosystem.

Oscar Jofre  05:27

great introduction by both of you. And so maybe some of you may or may not be aware of how the questions come up. What we’ve been doing KoreConX, I do apologize, I’m not a really good host. I’m just learning the professional that was available. So that’s the reason why I’m filling in the shoes badly sometimes. But the the questions that came came from the issuers themselves that come to us. And I’m still surprised, but I shouldn’t be because you’re You and I, we were in a previous webinar. And we now know that we have a road ahead of us to educate people properly on secondary market. Right. So this is just a road. And we’re gonna have to do many of these. But the question of the webinar today is, can I use my IRA, and particularly reset RegA, but in private companies, but the real question I want to started, why is why would even someone even need to even ask that question? If it’s your own money, what is happening? Not so much what’s happening in the industry, but what has led people to believe that maybe they can, and obviously, that’s coming back to you, Bill, at first, because I think I want to, I want to have that understanding first, before we start moving into the next phase of it.

Bill Humphrey  06:48

That’s a, that’s a great question. And even after our 17 years of providing access to any investment that you want, people are still stuck in the rut that they got into. And so looking back historically, those of you who are lucky enough to remember 1976, and the ads for IRAs came out, and it was all driven by banks. So there was an ad, I remember it said, put $2,000 a year in your IRA, and you’ll retire a millionaire, which sounded great, but the assets were never mentioned, there was just put 2000 in your IRA, like it’s some sort of magical account. But once the money is in there, that’s great. But you have to buy something. So the people that wanted to start selling things to these IRAs started with banks, and then mutual funds, and then some some traded platform brokerage platforms that allowed your IRA to buy and sell, but all of those were somebody selling an asset to your IRA, which means they would only sell assets that made sense to them, not necessarily to you. Because that’s where they made their money. So so as time went on, that that became the standard, and everyone just thinks that Well, I’ve never heard of it, it must not be allowed.

Oscar Jofre  08:11

You know, I’ve heard that before. It must not be allowed. Right? But that isn’t the case. Right? Right. So

Bill Humphrey  08:17

the other direction co founder, Catherine, when asked me one day, why can’t I invest in this thing that I understand which for her was real estate. And I, after 20 years of being a CPA and doing taxes and and looking at investments? I didn’t know. So I went to find that answer where’s where’s the rule that says you can’t, there isn’t a rule. In fact, the IRS doesn’t have a rule either about what your investments can be because they’re not Investment Advisors. So we started looking around. And so all the custodians that I talked about before, some of the ones that are in the background, are really just doing the bookkeeping, for whatever investments are bought. Compare that to new direction, we’re doing the bookkeeping, but we don’t have a list of assets that you can buy. We have the IRS is list, which is you can’t buy collectibles, and you can’t buy life insurance.


That’s it.

Bill Humphrey  09:14

So with your IRA, you can buy any asset as long as you have an independent custodian like new direction, that’s not going to say, no, that’s not in our list, you can’t buy that.

Oscar Jofre  09:27

That is in and I just want to again, I’m, as they say, follow the trail and the trail you lead, you said something really interesting, and I hope I wrote it down correctly. So typically, people would buy IRAs from registered investment advisors, right? registered and in their best interest was where this product that they’d have with they can of course i i’m not discrediting that they need to make money on but was it purely, you know, was the private as a private alternative brought to their attention Because I’m going to bring this back to you, you’re because we’re dealing with the company’s raising capital. And this, here’s this gateway, because I, you know, sometimes it’s having a good understanding, because when you’re going to fix something, you want to make sure that, you know, how do we re educate that wheel? Because obviously, if I’m not mistaken, these registered investment advisors still have a lot of those clients that are advising them. where to put that IRA? Am I correct to assume that?

Joel Steinmetz  10:31

Yes, so it’s interesting, you say that Bill and I had a discussion, I guess it was two weeks ago now, about a company we’re working with one of the larger asset managers in the world, and is looking to find a way to deliver in general to deliver private investments through their ri a world. And I know we’re going to get some some conflict in the terms but through their ROI a world how do you get those investors to have a diversified portfolio that includes private securities and potentially assets that they never had before. Now, in that ri a world, one of the key ingredients for those investors is their IRA. component. And so matching those two, to be able to get the larger universe to be able to invest in these private securities, diversify their portfolio, take control, Oscar, you know, I’ve talked about the idea of empowerment, empower the investor to be able to take control of their investments, that’s what we’re hearing, we’re hearing people saying, I want to control my IRA, I want to be able to deal with it, we invest in things that I couldn’t invest in before. All we’re trying to do from a secondary market, is to be able to allow this kind of investment to be available, just like any other investment would be available. We just need that back end of things to work on the operational side. And then we can have these investments be the same way. At that point in time, the only thing we have to concern ourselves with is making sure that investment a went into the IRA accounts and investment B went into the trading account.

Oscar Jofre  12:23

That’s Yeah, no, I agree. And it’s, there’s been there’s been some good developments with I’m now learning that terms and I don’t say I are, are IAA that quickly anymore, because I’ve been getting a course from them. And wow, what a wake up call. That’s why I’m trying on it, Bill, because I didn’t realize that until that discussion with this group that I’m having 7000 of them, that there was a connection to you. I didn’t know that. And I didn’t understand. So I have no idea of that connectivity to it. So it really was rather awakening to learn how they worked, how they recommend. And then I finally had to ask the question, and and graciously, they gave me the answer. We are happy to recommend private companies. Michael, fantastic. How do we get you more, right. And because I have a client, a RegA client, for the very first time, the only client we know of that registered investment advisors are actually selling to their clients, and privately held. And now, I’ve now discovered the missing link in there. And now you’ve added another piece to this. What I love this industry, it’s all these pieces that bing, bing, bing, bing. So it’s great. I have enjoyed it seriously, since the day I know the journey, it sometimes takes time. For those who don’t appreciate things sometimes, they may not realize that on a surface, things go really quickly, but it’s in when you’re in the weeds, putting it together that actually take time. And obviously, because there have been other approaches and so we’re going to move forward now. We’ve seen an IRA in alternatives. We see it everywhere. I personally have seen it. I’ve spoken to people about it. And you know, the way it gets delivered to me is also Problem number two and I’m gonna pick on you bill a bit and then I’ll go to you Joel and that is that your industry as much as the there’s an issue about people thinking that they can invest in private which they can. The industry itself is still operating in a way that some would not come you know up to date with with the rest of the world. The Does that make sense what I’m saying. And it’s

Bill Humphrey  15:04

because of the assets that are traded on the public markets and they’re, they’re all systemized so that they one asset can be sold easily three clicks, I like to say, and you own IBM. But with private assets, for the most part there, it’s not built into the system. So it’s not as easy. So there’s usually more paperwork. And because there’s so many of them in smaller increments, it is, has been more challenging for some an individual to find an asset, and then know how to fill out the right paperwork. With new direction, what we’re after is systematizing, that paperwork so that it’s faster and smoother for those investments to happen. And at the same time, you have to remember that the money to make to make the purchase might be at fidelity or Schwab or some of the mainstream custodians. And for that transaction to happen, the money has to come over to new direction, so that we can send it to the the escrow company or whoever, whoever is issuing the shares. So it’s, there’s little timing of getting the money from fidelity or, or wherever it is over to new direction. So we’re also working on trying to connect new direction to that public system so that we can move things faster.

Joel Steinmetz  16:30

That’s where the totality of the partnerships, I think, come in. Because if you’re looking at a system that can actually take care of this specific surrounding the IRS, right, the the specific surrounding the, all the paperwork, once that’s taken care of in the background, the investor still would not be able to deal with the three clicks, that they would be able to get IBM because in a private security, it still won’t work. So while while company like new direction might be working on the IRA side, there has to be someone working on the private investment side, a platform. And the combination thereby would create a similar three click operations for investing in some alternative asset, as it would be for IBM. And because on the background, the operational side is taken care of that same investment can go into any number of accounts, including an IRA account. So if one if one unit tried to take on the whole thing, probably wouldn’t work. But when we have the specialists in one area and the specialists in the other, dealing with their component parts, and putting them together, you get the totality of the universe that allows the everything to go from beginning to end in the same method that it does normal.

Oscar Jofre  17:59

Right. Yeah, that’s a great point. I think that’s one. I mean, what I’ve noticed from the industry is that there’s a lot of everybody wants to get into it, everybody. You know, I’m seeing a lot of advertising. Now we do our arrays are arrays. And, and I go, that’s fantastic. But I’m on the other side, I see something a little different than what you’re promoting. And then you have to ask, okay, so obviously people want it. So it’s not because people don’t want to use it, or people want to adopt it. It’s not because the company doesn’t want it. So there’s a gridlock that people have very low visibility into it. And or the visibility that’s been provided, it’s been downplayed as a meta problem. I’ll put a button on your site and boom, it’s going to be taken care of. But Sorry, I say it that way. Because I go Okay, though, that’s fantastic. But we still got a problem and wonder why? Well, y’all came in all this way to this site. And he’s providing all his information right here. This is about systems, y’all. This is what this is coming all the way here. And now what you want me to do is create a button because you create some phenomenal onboarding on your end, and you will meet a person over there. And you want him to come in and do some wonderful things over there, which is great. And to create an account because that’s the only way they can do what they need. And then you’re going to push them right back to me here somehow, right where he left off on and somehow that’s going to continue. And do you know that architecturally that works beautifully. I love only because architecturally I mean, it’s like what we had to do in 1999 when it came to payment providers, the rails the rails forced us to go there and we had to come back but the time it went there, the customer was long gone. You’re on the phone. Come on bill, send them the check. Um, so I wondered, I wonder why the question has come up continuously, even though people have promoted it. And I wonder if it’s partly to do with the experience that the the investor needs to go through. So I don’t want to go too much into some of the upcoming things. But let’s walk somebody through a private investment. And we brought in, you’re here with a FINRA registered broker dealer who has to undertake all this. And, you know, I’ll give you the dollar amount investment. And you think about what the practicality of this, you know what I mean? So $400,000 investment, you will do that day in and day out, agreed, you will do the rough paperwork, walk the client through get them to fill out the PDF document. I know, Bill, you have an online system where they can be walked through, but again, the investors with with the reality right now, and y’all will get Ryan or Jim to walk them through it, and they will, because it’s worth it. So now, what if I start bringing the dollar amount down? Where does Sherry and you’ll say, Okay, guys, yeah, sorry, below what that number is, and this is in why this is important is because traditionally, what I’ve seen when people talk about IRAs, real estate having $50,000 50,000, all that people do attain there. Now we’re talking about RegA. And now we got to talk about 100 $500. Yo, how do you feel about having Jim and Ryan? doing paperwork with a custodian? Making sure that paperwork is going back and forth? Do you see what I’m trying to get out with this? Yeah,

Joel Steinmetz  21:47

and and there’s no way, which is why we don’t build it that way. If we were to build it, we look at things a little bit differently, I guess, in both the broker dealer side as well as the ATF side. The first rule of thumb for us is always scale. How do we get this to scale, assuming that we’re going to have RegA investors that might have an issuance of $10 million, then that’s going to have 1000 accounts 10,000 investors, whatever amount of money, whatever amount of investors that that might be, we we have to figure out how to handle 1000s on a daily basis for a given investment. So if we haven’t systemized and automated appropriately, then it’s not going to work. So from our perspective, our systems say, I don’t care whether it’s $100,000, or $100, it’s still going through the same process, and it’s going through the same machine. Now, part of that is going to be dependent upon the delivery from the customer. So the customer is able to deliver the documentation, all the things that are necessary, we can do AML KYC, in no time. And again, it doesn’t matter whether you’re large or small, we can facilitate that. The same holds true on the ATMs when you’re trading. So if you want to put your investment or in a primary issuance or a secondary ations into something of any size, as long as you as the subscriber, have the have the necessary documentation to get things done. The system will make sure that that can happen very quickly. And we don’t need individuals to sit there and say, Well, is it worth spending my time on this $100,000 invest? The $1,000 rise as opposed to the $100,000.

Oscar Jofre  23:46

And Bill from your end? I mean, you’re you’re the custodian, you’re the one to hold it. Obviously you want as many individual Americans to use our arrays. I’m going to ask you a question you may or may not have the answer for. But I mean, statistically, I believe only 50 million Americans have IRA accounts correct?

Bill Humphrey  24:08

Is it more I think it’s more of it. It’s also includes 401k plans and company plans, which ultimately end up being rolled into an IRA at retirement. So we look at the whole retirement industry as as a package even though a lot of the money is not an IRA is yet.

Oscar Jofre  24:31

Okay. So but that’s still less than 50% of the auto population in the United States.

Bill Humphrey  24:38

Yeah, somewhere around there. Okay. Might be a little higher, but yeah, no. Sorry, please. The people that have bigger chunks of cash are usually coming from a company plan rather than they contributed their two or three or $5,000 a year.

Oscar Jofre  25:00

And the only reason I was getting out so there’s two components to the IRA. There’s the existing portfolio, right? Where we know, one of the challenges no matter what is that there’s no way a, you know, will take reality reality, will you, in order to make this work, you would have to have a system to manage all 60 custodians. That’s just not possible. But then there is the move the transfer, as we call it, that’s one, then there is the brand new IRA. And I’ve often wondered something because I’ve been looking statistically countries that have retirement plans for their, their citizens, and the percentage, you know, by, by market. And it’s It is interesting that us, above all the countries like Canada, Australia, New Zealand, even Europe, it’s below the market now by you know, five or 10. We’re talking 30 40%. And I’m only asking this question from this perspective. This is because not because people don’t want it I believe people do. That’s just my personal opinion. I just like when people said that investors don’t want to buy a private companies, they were wrong. We now know, three and 58,000. Americans truly do want it. Why? Because we made it simple for them. Do you think that may be part of it, as well, getting into the private? Just the whole idea, right? Because it’s it’s a, it’s a part that I believe it’s also part of the discussion? Well,

Bill Humphrey  26:42

I think it’s not systematized enough for young people. So that they don’t get into the habit of putting money aside, and maybe they can’t afford it as well, but and then once they can start to afford it, then their company is doing it for him. So they’re not putting is that they’re not contributing extra, necessarily. And then once they’ve accumulated enough, that’s when currently think they start looking for assets. And they historically come to us to buy bigger things, the $100,000 investment, not the not the 101. And but time is changing, and people now can contribute to their IRA, they can contribute to their health savings account, they can contribute through their company, their different ways, and the companies are making it so that it’s the default is you contributing rather than it being the other way around, you have to elect to contribute. So it’s, it’s education and, and simplicity. And having a smaller dollar amount has been a challenge for us. Because of all the paperwork involved. So with automation, same same thing that Joel finds is, you got to ask 10 questions, and you’ve got to have a human to ask them. And it’s got to be easy and fast to get to that $100 or $500 investment level to have it make any sense for for anybody in the game. But it’s so important to have people start putting money in so that they get into the habit of saving for the future, and then they have something to work with. And then they get to watch it grow and thinking about retirement or their their future health care. And this is the current environment of worrying about health more so than we used to. But I think it’s a combination of of making it simple, and education to get people to start doing it and keep doing it.

Joel Steinmetz  28:49

And I know market is potentially going to help simply because if you if you look artistics now this statistics are showing a remarkable decrease in the in the amount of stock ownership, for example that young people hold versus what they did 10 2030 years ago. And I think there are a lot of young investors that are looking at a couple of things. It’s not that they don’t want to necessarily own something. They just want to choose what they don’t, they don’t want to say well, okay, so I get Microsoft and I get IBM, and I get Intel, and I’m done. They want to say well, I want to get into something a little bit different. I mean, it’s not traded on the New York Stock Exchange. And the second thing is that that young generation that bill’s referring to are is a generation that is, in one sense, very happy to do it themselves. They feel empowered. And they were used to the IRA world. Just as you’re saying being told to us, the company is going to put in your money for you, even people that put in money in their 401k In case it’s what’s the matching, that my company’s giving is always someone else that’s sort of doing it for us. And I think that the, you know, the younger generation, although we’ll look to that is also looking and saying, I want to do certain things myself. That will, that will, I think, help it’ll, it’ll make the education still a huge education process. But the education will be potentially easier, because you might, we might be talking to the right audience, right to people who get it. And who want this kind of solution for like, Bill was saying, How do I do this for much smaller amounts?

Oscar Jofre  30:45

Yeah, I, I have to tell you that I, it’s great that we’re having open discussion. I’m not here to advocate for saving or any. But you know, I have an 18 year old son, and he’s already started his RSP, which is the equivalent of IRA, and he did it on his own. That you mean, that’s the You’re right. And he goes, Dad, I’m only putting $25 a month. But you know, what, it? It’s amazing, you know, 1817, starting that plan. And but they made it simple. I mean, it wasn’t a difficult undertaking, it was Click, click, click, and he did it on his mobile device. It’s, which was pretty cool. And I believe this is what I was leaning to with all this is that it’s only a certain percentage of Americans. There’s a lot of dollars out there sitting. And obviously opening accounts is just as challenging as doing the transfers. That’s my advocacy has always been about always working with what’s in there because people go, that’s a huge part. Yes, it is. But bill, and everybody else will know that moving it from fidelity to bill does have its challenges, but at the same time, opening new accounts and being the first one in and with a new way of using technology and all that you’re a front runner on it. So but I want to move now into the discussion where it all started with, can I use my IRA into private? And there’s a term that I want to make sure I get it correctly? If it’s misused by us or the industry? Does the IRA industry built called IRAs alternatives? or private investments? What is the coin? Do you know how every industry coins? Something? I be curious to hear from you.

Bill Humphrey  32:31

Well, currently, I think the more general term is alternatives. And I’m not sure that’s the right term, because it’s, it’s, it is an alternative to public. But it is not an alternative in this scary sense of the of the term. So we always like to talk about more broadly diversified asset. So rather than we have a slide that shows little wedge of of the public assets, but then it shows a huge rest of the wedge of all the other assets that are available. So looking at it, you wouldn’t think that the big pool is the alternative compared to the tiny pool.

Oscar Jofre  33:17

That’s interesting. And y’all I’m gonna come to you from a broker dealer. Our privates called my Sorry, my, my little baby celebrating Chinese New Year’s already enjoying the dumplings. Sorry, y’all. The, from a broker dealer, are you also referring to privacy alternatives, or this just to the IRA space?

Joel Steinmetz  33:40

So the private markets, I still think I still refer to as private securities. What’s interesting is, alternatives are something slightly different. But now there’s a new term that’s come out, which is alternative alternatives, which is now taking things like cars or art, or collectibles contract. Yeah, that’s really more alt to alt right, there are alternative alternatives. And those are now becoming somewhat popular as well, and people trying to get the nomenclature down to understand it. But the key component, and I think this is what Bill was referring to is the private markets is is multiple sides of the public markets. It’s there’s multiples, and that’s not including most of the alternative alternatives. Right? Most of the assets that are out there, that are real assets have not been securitized and turned into something that are investable or tradable assets, like art, like entertainers, those things are assets, brands are assets. And so that that market which is over Ready dwarfs the public market is only just beginning. Because there are so many more assets that can come into the private marketplace. To make it all the more

Oscar Jofre  35:11

interesting you say that because one of the things he said building, I wrote it down, you can do you’re gonna invest in any private except for collectibles. And by I’m going to now I’m going to throw a bag, y’all I know you and I are seeing some very interesting. We’re seeing people raising money for collectibles in the so there are companies who are doing watches, I believe shoes, I have another one doing music. And then there’s another one investing in athletes. Me it’s athletes before they become you know, the tier one. So will that be treated? From your bucket as a straight private alternative? Or will it be in the bucket of collectibles? Never heard me ask that question. But now that it’s here it it makes sense.

Joel Steinmetz  36:04

Yeah. So it’s an interesting question. And really what what we we’ve been having this discussion with a lot of people in the industry, both from a regulatory perspective and other and from, from our understanding, one of the key components is, is it a security? And that’s been a question the regulators have been dealing with for a while can can we create this to make it a security? If it’s a security, then we’re going to put it in a regulatory regulated platform. And once it’s on a regulated platform, then you can start determining what, what it falls into? Does it fall into the real estate industry? Does it fall into the renewable energy industry? Or does it fall into the collectibles, and I think you’re gonna have a bunch of these that fall into the collectibles and may not, may not be available from an IRA perspective. But there will be others that are going to be categorized as securities in something other than just a collectible something a long term holding or what have you. And those, those are questions that, that have to go through a process before they get to their conclusion as to how we categorize.

Oscar Jofre  37:16

Yeah, so I’m going to come to you, Bill, because this is obviously your the area custodian. I’m working right now with five companies, I would classify them as historic, sorry, collectibles. One is in business, you know, sports memorabilia. The other one is music fans. And they’re fighting for their right of one winning. And they are selling the security, the bone ship, sorry, they’re selling shares in the company, and the company is going to own your statement sell famous rookie card when you play for the Yankees. You guys didn’t know that, right? Y’all don’t forget that I want my signature, so and they buy that, and that’s got a value x. And that x is part of the value of their company. And the reason they bought it is they bought it at 200,000. And they’re going to sell it for half a million dollars. And the so that’s one model. I’ve seen it. But I’ve also seen another model where they take a piece of art, and everybody buys into the art. And it’s still a security, I’ve seen both under RegA, Will those fit under the collectible arm? Or d? Are you flexible enough? what it was? Is it even new that makes that determination?

Bill Humphrey  38:28

Well, are we approached it from a perspective of is it? Is it obvious what you’re investing in? That it’s a collectible? So if like Joe was saying if you’re investing in a company, and it’s security ownership in that company, and that company buys a collectible, does that mean your IRA owns a collectible? And it may or may not depending on the details of what the company is, how its set up and what it what it’s actually doing. Versus there are some rules about 25% or more of the investors being IRAs or qualified plans. If it’s more than 25%, then your ownership in that entity owns its assets. So for example, small company, just two investors, one’s an IRA and one’s not. If that company went and bought Joe’s card, then the ownership would pass through to the IRA and it would not be allowed. If there were 100 investors to buy Joel’s card and five of them were IRAs, then it would not pass through. So they just be buying the company, not the company’s assets. So they’re they’re fairly complicated set of rules around that. But you really have to look at each individual transaction and say, and what is my IRA buying a collectible or is my IRA buying a company that happens to make money dealing in collectibles

Joel Steinmetz  40:00

Now that’s that’s particularly interesting from my Yeah. Yeah. If you digitize that properly, you can actually put into the security itself, the restrictions to make sure that it never violates that.

Oscar Jofre  40:16

Yeah, you could. Yeah, exactly. Exactly. If you just make sure that in your example, Bill

Joel Steinmetz  40:21

never has more than five IRA holders. And that would that would enable, especially with digital assets, that will enable you to automate that process so that even as people are buying and selling, the, the transfer agent would be aware of who’s coming in and who’s not. And the trading system would just inform and get a yes or no, can this person invest or not? Or does it trigger some other problem? Right, so if we’re, I know, we’re going a little off topic, but it’s so digitize world, the advantages that you can get in a digitized world, when again, combining a private placement placement platform for investing and trading, along with an IRA custodian that can can interpret these rules properly.

Oscar Jofre  41:17

Right? Well, for me today, I learned something new. I so I think it’s important if this is great, because I need to put the brakes on some people right now and and and so can can we walk through that little process a little bit because I get the straight vendela equity, I get that. collectibles. The reason I’m bringing this up right now is because we’re gonna see a lot of it more than we’ve ever seen before. I don’t know about you, Joe. But you know that right, we’re seeing the filings you can see it daily, somebody is coming in. And just because one person is doing one or the other one’s doing another art and same thing with collectibles in sports and all that. So what do you think it’s going to be? What, what is the undertaking from a broker dealer? I mean, for them perspective is this company hired a lawyer to create a company a LIFO legal structure, they’re going to issue securities to the investors. Obviously, you’ve been the IRA custodian, before the investors can put in their money into that, can you just walk us through a little bit of what you all would need to do as the broker dealer record in this case, because obviously, the BD is doing the compliance needs to ensure that only to the only these options can be available. And we’d love to include that. So love to hear your comments on that. How long do we have? Oh, Holy mackerel, you mean No, no. Short Form this time?

Bill Humphrey  42:45

So the big picture is the company is issuing shares, to raise money to buy art, why are they buying the art? Are they going to hang it on the wall and they’re in their houses? Or are they going to try and hold it for appreciation and resell it just like a regular business. So that the IRS rules about collectibles are so that you can’t buy something that has unique value only to you, and that it will never sell for anything higher than what you paid for. So they don’t want you buying those things that are going to hang around your house. So that’s why they keep them away from you. But at the same time, they’re not trying to stop you from investing in a company that’s making money. So the rules about the pastor ownership 25% or less of IRA or qualified plan money across the whole list of owners, then you’re in in the safe zone. So if you had 100 shares, and 100 investors, and 25 of them were IRAs, then at that point, the 26 IRA would put that into the whatever that company owns, the IRA owns, and if it’s a collectible, then it’s a problem. But if you limit it to that 25% or low, lower, probably 24%, then you have the new investor coming in has to wait until one of those 24 sells to buy their share. So it could be

Oscar Jofre  44:26

VA so there’s kind of a work around here which we can program to your point. So 25% of the overall big 24 sorry, 24% of the overall base cannot be more on IRAs and this therefore they can invest it. But as soon as it goes to 25 or more, this thing goes to a challenge and it could be reversed and nobody wants that. Right. Got it. Okay. It’s, you know, it’s good to ask this question because the private markets that’s exactly what it’s opening. I don’t like the word alternative is out route to say, I like private securities, I find the word alternatives. Whenever I hear it, I think people are thinking of like, online land blending crypto, which I feel like I know, in the IRA, I think it fits into those categories. Am I correct? Okay,

Bill Humphrey  45:21

I don’t like alternative either. Just so you know. It’s not descriptive of what? alternative to what? So, I mean, these are, these are great assets, they happen to be private assets versus public assets, which another line to draw, but

Oscar Jofre  45:39

I’ll come on. I know guys, like you’re like the weird alternative. So you know, they can keep us in the dark. But not anymore. Joel? That’s it enough. Private securities? It is, you know, I

Joel Steinmetz  45:50

actually. So I learned something today to that those those rules, if you will, that bill just described, really flipped the concept of alternatives on their head, because what you’re basically saying is that something is not defined as an alternative, just because it’s a different type of asset. It what you’re saying is, if it’s a different type of asset, but invested in a certain way, 80% of the people are investing it to hold the company, then it’s not an alternative asset. Right? It’s, it’s, it’s not necessarily what the asset is, it’s who is investing in that asset, that will have just as much of a determination on what can be done with that asset. That’s a really important factor that I think we need to educate people on. Because once that happens, you’re you’re allowing private assets to be defined in a certain way to allow different types of trading tools, and different type types of investing tools, I shouldn’t even say trading different types of investing tools. And to define something as an alternative, when, if the investment is done in a certain way, it’s actually traditional, rather than alternatives. And if it’s done in a different way, it’s alternative rather than traditional, basically says, Don’t categorize it as alternative. categorize it as private and public, and then figure out how people are investing in

Oscar Jofre  47:29

you, you’ve given me So Bill, I got a topic that you’re going to come back on. So you can get yourself ready. Because I This one was really great. I mean, we could, it’s going to be collectibles. investment, three through your IRA. I’m certain This one is good. Because if you see the number of collectible companies applying right now, with for red days, and even Reg CF is increasing beyond numbers that we see. There’s a company applying for shoes collectible, like I like shoes, but I’m sorry, yeah, I love shoes. But you know, in my collecting shoot, I like the guy who’s doing the Ferrari’s though. There’s a guy that’s actually raising money to collect Ferrari’s and he’s already bought two. And there’s another one that came to us to do guitars. And one of them is that. So? I look, I’m not laughing at intrapreneurship. And if I did, I do sincerely apologize. That was not my intent. But what I’m saying is that this is the new reality. The regulations are saying, Yes, you can. Joel’s saying something very interesting, which we’ve talked about, in structuring the deal, understanding the structure in the deal, not just from the perspective of the securities and all that, we also need to think about how the money can come into it, and where that money is coming from, and how it could affect the individual that’s putting the money in. Right? Because it that is a that is something I you know, that’s why I love these webinars, you start having a discussion, like I had one with y’all this morning. And another topic came out of it, because it they’re the prevention we’re trying to do is all of us, you bill, you all myself and the 190 plus others that we’re all together is to keep educating the market to make it available to them so they can sit down the same way with you for over an hour. This way, they get the high level points of it, and then go back and say, Okay, this is the instrument I’m going to need to use, this is what I want to do. But at least they’ve gone through the framework that this is allowable. The key element that I’m my takeaways from today is number one, IRAs have always allowed an individual to invest in private companies, coined alternatives. And so that’s never been a problem. We now know the roadblock. Just like when the jobs that was being created. Many people thought that the Robach was people like y’all. And if you weren’t there, yo, but a lot of people were saying it was the intermediaries, though they were the problem, why I couldn’t get to the retail investor. And the irony is, if you fund the board, it’s an intermediary, and there is a broker dealer. So it wasn’t that we didn’t need them, we just needed a different way to do it. And that’s the, for me, it’s just the most gratifying things to hear. Because I feel like we need to have a session bill with you in a in a registered investment advisor and a broker dealer in one, because that brings state the couple together having one on collectibles on IRA. So I, you know, I’m very thankful to that. So but I want to give a few minutes to each of you a bill, obviously, you’re in the you are on the frontlines, your firm is probably more active than most, I see that your team is trying to be progressive, using technology and partnering with different companies and all that which is great. You obviously see a different path. Where do you see the from your perspective, you have 59 other entities that you go head to head with, that are offering the same product, the differentiator really has to be on top of mine all the time. But where do you see your industry is? Is it going to grow? Because of this the private securities market for you? Or is it going to be just it’s a niche element?

Bill Humphrey  51:37

Well, certainly 17 years ago, it was it was a tiny niche. But as as more and more people become aware that it’s growing, so the wedge that goes into the alternative space used to be pretty tiny, but it is continually growing. And I think it’ll grow even more. So I think we’re just getting started into being more mainstream, that everybody knows that you can buy these private equity is just how so our mission is to make it easy. And to be able to educate people when they say, Well, why didn’t anybody ever tell me this? Because I would have been doing this since I just started. It’s all these investment opportunities that come along, people say, Oh, I wish I could do that. But Gosh, darn it, I don’t have any money in my pocket. There uncle IRA, as I like to call him has money. And he can go and make that investment. And he can return that will come back because to him, but it’s still your money for your retirement. So I think we’re just getting started.

Oscar Jofre  52:44

That’s an interesting point, you know, I’m going to refer to my son he goes, I asked him why? Because he he knows I’m in the capital markets, he didn’t come to me. Because that it goes, I I’m thinking of 510 years, there’s one thing I keep hearing you all the time plan plan. And I did that in it the opportunity and they made it easy. Do you know that I have not forgotten that part? Um, I’m not here to critique IRA your system, believe me, the Canadian RSP you think you got enough PDFs, there’s so many PDFs in that side of the fence, that they don’t even have it online. So when I heard that he went, click, click click, I was just like, you know. So it takes real leadership, I think, for your industry, not to just say, we want to make it easy to allow the emphasis and make the investments easy. But I think you went one step further. You reached out to be to find partnerships with like companies like reality and myself, full disclosure and everyone to really not just have a partnership, but to fundamentally change. It’s a painful road, you know that we look at the well we’ve gone through finding all the right pieces to make it work the way supposed to. But when it comes they’re together. It’s just phenomenal. And I believe that we’re not alone anymore. Right. I was alone when I first got started. I needed to find you and I did took a long time to find a realtor. That was a long time. And we recently found that other party that we were looking for a long, long time. That fills in that gap. And it’s it’s gratifying. So I personally see IRA I’m gonna fill that in a little bit before I go to you You’ll is that I see it as a game changer. I truly do. I see it from two different ways. Number one, I love nothing better than asking investors today who have invested why you don’t use your IRA. And what caught me off guard was a lot of them don’t have. So that was a that was one the other ones that do unless it’s a certain amount. It’s not worth it. Andrew corn always says it best Oscar. an IRA investment is worse than a root canal. You’ve heard me say that right bill. So that root canal, if we can make it simple, you know what Dentists have done, right? They get a nice television, they get an injection, you don’t even feel it anymore. In fact, you walk out really happy. So I’m pumped still go all the way through, yo, it’s you.

Joel Steinmetz  55:20

I just this one point that bill made that I think is very interesting. And that is that people, a lot of times will look at their investment, say, I’d love to invest in it, but I don’t have the money. And in actuality you do so looking at that from a slightly different angle, it gives you the ability to kill two birds with one stone, you know, you need to save everyone knows they really need to do that. You may say I don’t have the money now, or I don’t want to or what have you. But everyone knows, knows that they have to put something away for savings. On the other hand, there’s an excitement to be able to invest. And that’s not necessarily for savings. It’s it’s a way to invest to get involved and control your own finances, finances, etc. I have kids, you know, they’re just getting into the working world. And they’re trying to figure out how do I save money? Now? How do I put things away and manage my bills, etc. The combination of being able to use money that you thought was separated from the money that is in a different category, I want to invest, I need this dollars, I need I want to save any those dollars, we’re now saying they can actually come one in the same. So you don’t have to double down on what you’re doing. You can use one and get the advantage of two and kill two birds with one stone. And the to your point, Oscar, if we make that not only easy, but cost effective. That will win the day. It’s got to be 100%.

Oscar Jofre  56:49

Yeah, yeah. And it takes real leadership to do it. It’s hard road. You know, sometimes they take a lot of beating. I know, Bill knows. I always go to him sometimes because I hate him and I are very different CEOs. But either way, we’re, we’re all building companies in sometimes. Look, I’ve been very candid. I’m I’m a CEO, like a salesman, right, I sell, I sell visions and ideas. But I just don’t do that. I also want to see them through. I have children, and all that. But I also know how hard it is to make it come true. You know what I mean? And the A, and when I keep using the word leadership, is it’s one person saying it, but it’s the rest of the team carrying it through. And then because there’s some really hard road rehab told me Sherry, you’re you’re going in the meeting, how many meetings that we’ve been at where we think we’ve got the right last piece of the puzzle, and they’re saying all the right keywords, and we’re like, oh, finally, I don’t know how many emails I’ve written like that. And because I get excited, I’m like a kid in a toy store, you know, or candy store. But I get excited because I truly know it’s there. But just like I had to go through in the IRA, it took us a while. And but I don’t regret the ride. I don’t, because I’ve learned so much through each of those providers that said yes, along the way. And why they didn’t join that it wasn’t because of anything more than it wasn’t bought in or they didn’t have everything that they wanted to but they weren’t ready, or they wanted to. But they didn’t have anything they wanted to but then another side of their business took over it. And sometimes you just got to keep moving with us. We finally found one. Right. And the pleasure gets only better when but a lot of people from the outside get frustrated because how hard can it be for you, Bill? Seriously, to get it so simple. So I can go to it. I can go to a job and just click a button make the investment? Yeah, oh, yeah. I’m sure you take a beating every day on my own. So going on, you know what I, I applaud all of us in both most of you I, I speak very highly of you. Because even when I do hear a conversation from other IRA custodian, I applaud their business I but I, I indicate the reason why we are here and where it’s going to because it takes a different way of viewing things. COVID-19 hopefully for both of you and I know it has for us made us review things differently and the investors looking at things differently. That’s the other thing. Back to Joe’s point, we’re empowering them. The old and I’ve been on this view webinars, it’s the SD is the fluidness of everything we’re doing is empowerment from the beginning. And you’re part of that IRA is right here on the investment side, but it’s an end there. There’s also the secondary side, everybody just keep thinking, it ends here, there’s still more, right? And that fluidness needs to come like this full circle. So without any, there’s gonna be bumps in we’re working through. So I do want to thank you both for your patience understanding, foremost, if I haven’t said it, privately, I’m saying it to you publicly. Because I hope you all appreciate, I think you do. That what it takes to try to transform something, for the greater good of everyone. It’s easy to put a sticker on something and say it’s there. And we’ve never had the three of us. We’ve been really strong to that. And I believe what lies ahead is in me, just phenomenal. So I want to thank you both for a wonderful afternoon. I’m bringing you back, because we’re going to have that discussion. For everyone else. Thank you. The KoreSummit webinar series is available to you at You can watch the videos on YouTube channel, spread it out, let’s share it and obviously the speakers bill Humphrey and new direction, your statements from reality. We have their contact details at the website, you can contact them directly. Ask them any questions you like. They’re there to help you in your journey for your company. Whatever stage you are in startup growth, high net worth, whatever, it’s there there. Thank you both bill Yo, I hope to see you both soon. Senior quiet low happening.

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