Protection/Security
The duties of the regulators vary somewhat between organizations and entity types. However, there are many duties that they have in common, including ensuring:
- The financial stability of each institution they regulate;
- The safety of customer funds;
- That each company has the appropriate financial controls, procedures, personnel and policies, so as to reduce the likelihood of errors, fraud, etc.;
- That each institution meets the requirement of all pertinent rules and federal and state regulations that apply to its type of institution.
Regulators take their responsibility seriously. This is not only because it is their duty to the public, but also because they are responsible to step in if necessary, should an institution fail to meet its responsibilities. As a result, regulators typically require monthly reporting from each institution under their purview, and they conduct annual audits. Such audits are in addition to the required audit of the company's books, records, financial controls, etc., by the institution's external auditing firm. All of these procedures are designed to prevent and/or detect major risks or problems before they become serious. Regulators typically require detailed plans to resolve any outstanding problems, and will also review the results of such resolution.
It is therefore very important that you understand that the organization with whom you choose to hold your IRA is regulated and is in good standing. Some organizations offering IRA services are not directly supervised by a federal or state regulator. These organizations appoint a bank to act as their nominal custodian or trustee (to fulfill the legal requirement to offer IRA services). However, typically, the "administrator" (as such firms are called) does much or all of the processing and record-keeping. The risk is that there is no regulator supervising and reviewing the procedures, controls and processing of these administrators. In many cases, such firms have ultimately gotten into serious difficulty, gone out of business or been guilty of outright fraud and theft of customer funds. So be sure to check out the legal authority of any custodian/trustee with whom you may do business.
Insurance
Preferred Trust Company, LLC (“Preferred Trust Company”), as a regulated institution, is required to maintain certain insurance policies. These policies include fidelity insurance (for employee theft, fraud and dishonesty), generally called a "banker's blanket bond"; an E & O (errors and omissions) bond; and a workman's compensation insurance policy for its employees. In addition, a company may maintain additional insurance or increase the amount of coverage on any of the required policies at its own discretion. Regulators require periodic evidence that these policies are in effect and at the appropriate levels for the size and type of business involved.
The Bank Secrecy Act & The Patriot Act
The USA PATRIOT Act of 2002 (Patriot Act) was enacted into federal law to strengthen the Bank Secrecy Act (BSA) in an effort to combat terrorism in the aftermath of the terrorist attacks on September 11, 2001. For the past several years, the federal regulators, with extensive BSA examination programs, have been examining banks and thrifts for BSA compliance. Non-depository trust company regulators began to review and assess BSA compliance during their regular examinations of non-depository trust companies commencing October 1, 2003. According to the guidelines of the Association of Independent Trust Companies (AITCO) the expectation to enforce the Patriot Act by their chartered members amounts to implementation of the following policies by Preferred Trust Company:
Minimum information to be obtained:
- Name of Client
- Date of Birth
- Address
- Identification Number (social security or tax ID number)
Customer Identification Program (CIP)
- Verify client identity
- Maintain a record of the information obtained
- Determine if client appears on any list of suspected terrorists or terrorist organizations
Since Preferred Trust Company is a non-depository trust company, we have always required prospective clients to submit the minimum information now required by this Act and we have implemented the Customer Identification Program herewith, as verification of that information. If the prospective client's identity cannot be verified utilizing the non-documentary method, Preferred Trust Company will require a copy of a valid and unexpired driver's license or passport.
As required by the regulations, we will retain all required records for a period of five (5) years from the date the account is closed. The description of the document that was relied upon and the methods used to verify the identity of the customer will be retained for five (5) years after opening the account.
Preferred Trust Company is in compliance with maintaining copies of such items and safeguarding them against disclosure under the privacy regulations adopted in 2001 under the Gramm-Leach-Bliley Act. All such records shall be filed or stored in such a manner as to be accessible within a reasonable period of time.
Website Terms and Conditions
Your privacy on the Internet is important to us. As part of the operation and customization feature of the Preferred Trust Company website ("preferredtrustcompany.com"), we gather certain types of information from users, and we would like to explain the types of information we gather, what we do with them, and how to correct or change the information.
Information Collected By Preferred Trust Company
Preferred Trust Company collects information from users regarding aggregated data such as information about traffic patterns on preferredtrustcompany.com (for example, how many users log on to preferredtrustcompany.com on a daily basis).
Aggregated Information
Aggregated information, such as which pages users visit, is collected through various means. One of these ways is through an IP address, a number that is automatically assigned to your computer whenever you are surfing the Web. Web servers, the computers that "serve up" Web pages, automatically identify your computer by its IP address. When you request a page from preferredtrustcompany.com, our servers log your IP address. Preferredtrustcompany.com does not link IP addresses to anything personally identifiable, so although your session will be logged, your session will remain anonymous to us. Preferredtrustcompany.com collects IP addresses for the purpose of system administration only.
Use of Cookies
Preferredtrustcompany.com uses “cookies” to automate the process of logging on to certain areas of the site. The preferredtrustcompany.com cookie is a small data file stored on your computer that contains a single, randomly assigned user ID number. By recognizing this ID number, preferredtrustcompany.com can automatically provide you with the personalized content which you requested. Cookies can neither read any other files on your computer, nor damage your computer. Most browsers are initially set to accept cookies. If you'd prefer, you can set your browser to refuse cookies or to alert you when cookies are being sent.
Use of Information Collected by Preferred Trust Company
Preferredtrustcompany.com uses both the personal and aggregated information we collect for multiple purposes. The information is used to improve the content of the site, to customize the content and/or layout of the site for each individual user, and if requested, to provide information services by email to the user. After submitting a request for additional information, users will receive a single email message acknowledging receipt. Preferred Trust Company will never disclose your personally identifiable information to a third party, unless required to do so by court order, law or governmental agency.
Information Security at Preferred Trust Company
Preferred Trust Company employees understand the need for user privacy, and Preferred Trust Company has appointed a privacy policy administrator to monitor privacy practices. Access to user data is strictly limited and can only be accessed by specific individuals with the necessary username and password combination.
Links to Other Sites
It is important to note that preferredtrustcompany.com contains links to other sites, and that those sites may not follow the same privacy policies as Preferred Trust Company. For instance, a link in the "Services" section under “Account Profile” of preferredtrustcompany.com will take you away from preferredtrustcompany.com to a contracted support site. You should review the privacy policies on those websites to determine their information handling practices.
Changes to the Privacy Policy
Preferred Trust Company reserves the right to change the policy on use of information collected. Any changes in policy will be noted in a revised privacy policy statement and will be posted at least 30 days prior to implementation.
