In July of last year I wrote about “Knowing Your Bank“.  I mentioned “Tier One Capital Ratio” as being one of the criteria regulators use to measure the health of a bank.  Regulators require banks to maintain a tier 1 risk-based capital ratio of 4%, a tangible capital ratio of 4% for a total risk-based capital ratio of at least 8%.  Bay Commercial Banks total risk-based capital ratio is 17.16%.

Bauer Financial recommends all institutions they rank with either 4 or 5 stars.  What this means to them is that the institution is safe, financially sound and operating well above its regulatory capital requirements. 

What this means for the client is piece of mind.  Any client who deposits funds with Bay Commercial Bank or Bankers Exchange Services can be assured their funds are secure.    

To open an account contact our office at (877)989-1031.  We facilitate 1031 Exchange transactions nationwide.

This information further strengthens the notion of how important it is to thoroughly vet your 1031 company before making the decision to have your funds placed in their care.  Here are the questions you should ask and the answers you are looking for:

1.  Are the exchange accounts segregated?  The answer should be YES, there is never a reason to comingle exchange funds with operating accounts or other exchange accounts.

2.  How are the exchange funds invested?  The answer should be in FULLY LIQUID ACCOUNTS, such as certificates of deposit, cash management, working capital, money market accounts, bankers acceptances or U.S. obligations.

3.  If having all of your exchange funds FDIC insured is important then you need to ask if the company is participating in the Temporary Liquidity Guarantee Program offered by the FDIC.  This program will ensure any amount of funds through a bank.  Certain restrictions apply so be sure to get all the details.

If you would like more information on 1031 Exchange give Bankers Exchange Services in Walnut Creek, CA a call (877)989-1031.  We are a bank owned intermediary.  We segregate all exchange funds.  We deposit all funds into money market accounts.  We are participating in the Temporary Liquidity program.

Some of the questions that you ask a qualified intermediary before you make your choice should include the following:

1. Will my money be placed in a segregated account rather than a pooled account with other exchanger’s money? You want your funds placed in a separate account which is FDIC insured up to the legal limit per depositor rather than a pooled account which will contain all the combined funds from all of the exchange clients. You will want a separate account set up using your taxpayer ID number.

2. Does the QI carry a Fidelity Bond and E&O insurance? A fidelity bond helps cover the loss a QI may suffer due to a dishonest act by one of its Employees. Errors & Omission or professional liability insurance protects against claims that something was handled incorrectly. In both cases these types of insurance policies will go a long way in enabling the QI to have the resources to protect your money.

3. What kind of internal processes and audit controls does the QI have in place? Will you receive an account statement or have access to an online account? Bankers Exchange Services is wholly owned by Bay Commercial Bank with branches in the East Bay and Southern California. Because we are bank owned we fall under the very strict regulations that govern our bank.

4. What is the technical ability of the staff employed by the QI? You want to work with someone who can answer your questions in a clear and concise way and explain the process simply. Bankers Exchange Services has highly trained professionals to assist you, including two certified exchange specialists® and an advisory attorney on staff. With the help of your tax advisor we can guide you effortlessly through the process and save you thousands of tax dollars.

Remember there is no substitute for effective tax planning! We at Bankers Exchange Services are committed to helping you achieve your wealth building goals. If you have any questions or would like to discuss any aspect of a 1031 exchange give us a call at (877) 989-1031.

Questions to ask a potential Qualified Intermediary: Are they bonded? Do they carry errors and omissions insurance? Do they segregate exchange funds into separate trust accounts that are federally insured? If the answer to all of these questions is YES that is a good indication you will be dealing with a reputable industry professional.

For help with any of the aforementioned topics or any other exchange related questions give Bankers Exchange Services a call, we have several extremely qualified individuals on staff that would be more than happy to walk you through an exchange transaction from beginning to end. We always want our clients to feel at ease when doing an exchange. Client satisfaction is our number one priority.

For more information please contact Bankers Exchange Services at (877) 989-1031