The annual charge is $800. They tell me that the letter will be included in the deal. Here is more elaborate info that I transcripted from an audio I received in the mail. This can also be heard on their website.
Interviewer: I understand that there are rules about self-dealing with regard to your retirement account. Does this mean that you cannot work for the business?
Interviewee: We should start by explaining a little bit about the prohibited transaction rules. Although your retirement funds can be invested in anything except life insurance contracts and collectibles, there are rules to prohibit individuals from using their retirement account to benefit themselves now. If you wanted to invest in a business where you and your retirement account own 50% or more, then you’d normally be prohibited from working for that business and drawing a normal salary. This is not the case for Audeo clients. In fact, Audeo clients have to work for the business in order to qualify for the 401(k).
Interviewer: That’s interesting. Why would you say this?
Interviewee: Well, just like there are rules for prohibited transactions, there are also exemptions to these rules. Now one particular exemption allows for the purchase of a certain kind of company stock called “qualified employer securities” that can be purchased by a qualified plan. The intent of Audeo is not to provide benefit for the individual now. Our clients are all capable of getting a job, working for someone else and getting a check. Audeo’s intent is to provide a great investment for our clients’ investment accounts. Our clients sleep better at nights knowing their investments are within their control. They have the ability to affect how well those investments perform. This just isn’t the case with stock market investments…The exemption that Audeo uses is the same exemption that is used for employee stock ownership plans…Congress provided for this specific exemption specifically to allow for business funding from retirement accounts.
Interviewer: Qualified employer security and qualified plans; could you talk a little bit about those terms and what they mean?
Interviewee: Well stock of a company must qualify for the specific exemption in the ARISSA code. As part of the Audeo process we file the corporation or work with the client’s existing corporation to insure that the proper steps are followed for this stock to be qualified. In addition, we also create a specialized 401(k) plan that must have special verbage and structure in order to qualify to purchase this stock.
Interviewer: How can an investor or entrepreneur insure that they meet those requirements?
Interviewee: That’s where Guidant comes in. Our business is setting up the entities, businesses and retirement accounts that enable this type of investment purchase inside of a retirement account without incurring penalties or taking distributions. We do all the heavy lifting for our clients because this is our area of expertise. As part of the Audeo process, we also include time with an outside attorney that provides a secondary pair of eyes to insure that all of the steps are followed for the plan and the stock to be qualified.
Interviewer: I guess one of the options is I can pay my personal attorney to get educated on ARISSA laws and I can pay my personal accountant to get educated on ARISSA laws and maybe they can give me a solution that might work like this product. So I guess I’m curious. What does the IRS have to say about these retirement accounts?
Interviewee: Good question. Every Audeo plan is structured with a 401(k) retirement account. Every 401(k) plan we structure receives an IRS determination letter that verifies the plan is approved by the IRS and is considered qualified. We have a unique plan that has been modified and approved by the IRS to allow for investments and to qualified employer securities.