PENSCO’s Kelly Rodriquez Announces His Top Five Predictions For 2015

Ready to share his thoughts about the new year, CEO of PENSCO, Kelly Rodriquez revealed his top five predictions for 2015.

Kelly Rodriques FeaturedDuring a recent post on the platform’s blog, Rodriquez stated, “As the CEO of PENSCO, I find myself at a fascinating intersection between IRAs, alternative assets, regulation and emerging investment trends. As a custodian, PENSCO enables investors to hold non-exchange traded assets in their self-directed IRAs. That means that we not only need to be experts in IRAs, but we also need to be on top of the shifting regulatory environment while also staying up-to-date on the ever expanding range of alternative assets that can be held in a self-directed IRA.”


His predictions are as follows:

  • The accredited investor debate will remain on hold — until at least October: 2014 came and went without the SEC passing rules to implement key parts of the JOBS Act. That means the crowdfunding industry entered 2015 in a disappointing holding pattern, awaiting guidance on whether or not they will be able to raise up to $1 million in equity funding from ordinary Americans – not just accredited investors. Last year SEC Chairwoman Mary Jo White said the agency would take a deep dive into how to revise the definition of accredited investor and the agency estimated that it would issue final crowdfunding rules in October of this year. But even that date might be overly optimistic. Chairwoman White has said that there is no “drop dead date” to complete its rulemaking, which means the industry could exit 2015 stuck in the same holding pattern.
  • Peer-to-peer lending will gain popularity among IRA investors: Last year was an exciting one for peer-to-peer lending (P2P). Lending Club debuted its $1 billion IPO, becoming one of the 10 biggest US tech IPOs in history. The company matches investors with individual borrowers who are looking to borrow money to refinance personal loans, like credit card debt. The IPO has helped to boost mainstream awareness of this unique lending space, which is evolving rapidly. The sector started by focusing mainly on providing small-sized loans to well-qualified borrowers, but it is expanding to include larger loans, like mortgages, and we’re now also seeing the securitization of P2P loans. We expect P2P lending to rise in popularity among self-directed IRA holders, who can invest in these opportunities using retirement dollars. P2P investments can be a way to diversify retirement holdings while also earning higher yields than are being offered on traditional fixed-income products.
  • Private equity will woo individual investors: Individual investors are poised to become an even more important source of capital for private equity. According to data from Preqin, which was cited in the New York Times, individuals provided 11 percent of the capital raised from 2011 to 2013, compared with 8 percent from 2007 to 2009. At PENSCO, private equity is the fastest-growing asset class held by our clients in their IRAs and last year, 60 percent of the new accounts we opened were in the form of a private fund, private placement and other type of private equity deal. Investors are increasingly gravitating toward holding private equity in their retirement accounts for diversification and potentially higher returns.
  • A potential pause on The Hill for IRA regulatory changes: For the past few years there has been a steady stream of headlines discussing potential regulatory changes that could affect IRAs. For instance, President Obama has proposed barring contributions to plans worth more than $3 million while lawmakers have proposed limiting “stretch” IRAs, where heirs who inherit an IRA can cash out the account over their lifetime. But Republicans gained control of Congress after November’s mid-term elections and the start of every new Congress means a change in priorities. With power shifting in DC to a party that has a reputation for policies that favor businesses or the wealthy certain proposed IRA regulations might not gain much traction.
  • IRA rollovers poised for enormous growth: Americans held approximately $7.3 trillion in IRAs as of the third quarter, according to the Investment Company Institute, and most of that growth was fueled by rollover activity. These retirement accounts will continue to see strong growth as baby boomers, who are expected to retire at the rate of 10,000 per day for the next 15 years, roll over their company sponsored pension plans and 401(k)s into traditional or Roth IRAs. With today’s investor taking an increasingly active role in their retirement planning and execution, we expect this will also lead to a rise in self-directed IRAs that allow them to invest beyond traditional assets like stocks and bonds.


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