Out of approximately 1.4 million practicing attorneys throughout the United States, only about a dozen specialize in the niche area of self-directed IRAs. Of these, Mathew Sorensen, of Kyler, Kohler Ostermiller & Sorensen, arguably ranks at the top.
Best-selling author, lecturer and adviser to government groups, professional associations, and to leading companies in the industry, Sorensen encompasses the knowledge, skill and expertise to effectively place him in a class by himself. He’s best known for his book, “The Self Directed IRA Handbook,” which has sold over 20,000 copies and is the most used book in the industry.
DIVERSE CLIENTELE
Serving individuals, large and small businesses and myriad organizations, Sorensen’s clients seek him out from across the country. Most of his clients are using retirement plan funds (IRAs or 401(k)s) to invest in real estate or private company transactions. These investments require more planning and structure than does clicking a button to buy a mutual fund or publically traded stock with a brokerage account. There are legal restrictions and tax rules that are critical when structuring these investments.
Over the years, he has advised thousands of clients with self-directed retirement plan investments, establishing IRA/LLCs, partnerships, private offerings, corporations and other investment structures utilizing funds from IRAs and 401(k)s. In addition to account owners, his clients have included trust companies, financial institutions, insurance companies, hedge funds, investment sponsors and third-party administrators. Even those who retain high-powered attorneys or CPAs for other aspects of their lives, turn to Sorensen regarding self-directed retirement decisions.
“In many instances, when these clients contact me, they’ll have their attorney or CPA on the call as well,” says Sorensen. “Initially they may be a little skeptical wondering, ‘What’s this guy trying to do?’ You know, they’re protecting their client. But, after about five minutes, they are always pretty clear that I know far more than they do in this particular area. I can site the code and the cases, and explain how it needs to be structured properly. They appreciate that and recognize that we’re working together as professionals.
“I’ve spent a lot of time doing the research,” he adds. “I like having an area where I can really be an expert, and it’s nice when people seek you out, and really value and appreciate what you have to offer.”
While Sorensen is certainly the acknowledged luminary in this highly specialized area of law, his firm in general handles an abundance of real estate transactions, private business transactions, and the selling and buying of companies. But, as he points out, inevitably these “pieces” are always involved with self-directed IRA investments.
“I have a basis in all these areas in general,” he says, “but I can also take the IRA-specific rules expertise to apply them to that type of investment for my clients. I love being an expert in a small field and being able to provide advice that clients need but have a hard time finding.”
BRAVE NEW IRA WORLD
As the word spreads that IRAs and 401(k)s can be used for investments other than the traditional mutual funds, more and more people are taking advantage. However, in this area which, just 20 years ago was virtually unknown or one of the best-kept secrets, it’s difficult to navigate on your own. Subsequently, in addition to trust companies, financial institutions, hedge funds, etc., Sorensen says he’s helping an increasing number of “every day” people.
“Many are just every day, working Americans,” he says. “I think there is a misconception that self-directed IRAs are for the rich, when most account holders are simply hardworking Americans who maxed out their retirement plan contributions over a career. They’re just trying to live their own version of the American Dream and want to be very productive with their retirement account. They just need some advice to make sure they don’t mess up the rules.
“Many don’t trust the stock market and don’t want to pay all the Wall Street fees, so they buy a little rental property, collect the rent, pay expenses from their IRA and grow their retirement account and future that way.”
He also has clients whose interest is raising capital from retirement accounts and need advice or companies in the industry that service those accounts, such as private banks or trust companies.
“It’s an interesting group of people who are attracted to this kind of investment,” says Sorensen. “I work with people who have a lot of money in retirement accounts, many who’ve worked for Fortune 500 companies, who’ve maxed out their IRA and 401(k) every year they could. Now, they’ve finally retired and they’re sick of buying mutual funds, so they’re looking for something else. Many have an expertise already.
“But, I have a lot of clients too who are pilots or engineers,” he continues. “They’re just the type of person that doesn’t trust the stock market because it’s impossible to understand. They get their mutual fund prospectus and can’t read it. They’re the type of person who wants to understand everything and are frustrated with Wall Street and the way it’s designed.
“So, they like self-directed retirement accounts because they can keep it basic. Invest in assets they can understand, that they have more control over and a lot of them feel they can have a better competitive advantage. They can do better finding investments than picking something on Wall Street.”
TRUE COUNSELOR
Much of what Sorensen does is to educate.
When he first entered private practice, after working as a corporate attorney for a large company and then serving as a prosecutor with the Utah attorney general’s office, Sorensen was looking for a niche in which he could apply his significant experience and become an expert. He astutely surmised that by developing a very specific area of the law, one which held his interest and where he could immerse himself in all the intricacies, his value as an attorney would exponentially rise.
“I realized we had a lot of clients asking about this particular subject,” he says. “They wanted to know how to use their retirement account to buy real estate or invest in a startup or private company. Everyone knows how to use their IRA to buy a mutual fund or stock; just go online with your brokerage account. But, not many people understand or even know that they can use their retirement account for other investments. That’s been in the industry ever since retirement accounts were created, but it’s a very small, niche industry and one that really did not have many good lawyers advising on the subject.”
He’d found his niche, but was surprised to discover a dearth of information on the subject. This became something of a good news/bad news situation, because it prompted Sorensen to write his own book. “The Self Directed IRA Handbook: An Authoritative Guide for Self Directed Retirement Plan Investors and Their Advisors,” which became an instant best-seller and is considered to be the definitive resource for SDIRA investing.
Released in 2013, Sorensen’s book is the most widely used and referenced book in the self-directed IRA industry. It’s been endorsed or used for training by nearly half of all major self-directed IRA custodians and is the used as part of certification training for companies in the industry by the Retirement Industry Trust Association (RITA).
A frequent, and much sought-after speaker and lecturer, Sorensen not only succeeded in carving out a niche within the legal community, he’s become one of the top experts in the field. Sorensen is the host and keynote speaker at the annual Self-Directed IRA Summit held annually as well as numerous, prestigious industry events.
In addition, his popular blog has a readership in excess of tens of thousands of loyal followers.
THE MAKING OF A SELF-DIRECT GURU
Meeting Sorensen at the age of 19, one wouldn’t have guessed he would ever achieve such fame and heights of achievement. Just out of high school, he was already married to his high school sweetheart, Kathryn, and father to their eldest child, Brooke. For most young men, this would have been responsibility enough, but Sorensen knew what he wanted. Although, it meant working full time while attending first college and then law school, he was not about to give up his dream.
“It was hard,” he admits, “but I am blessed with an incredible wife and partner. She took care of everything at home and even worked part time. I was in a hurry to take care of my young family and finished my bachelor’s degree in three years and law school in three years while working full time.”
Now married for 20 years, the couple have two more daughters, Claire and Adde.
“I guess I was just raised right,” says Sorensen. “I always had to earn my own money and had a job since I was 14. When you are married and a dad at a young age, it’s just a question of sink or swim. I wanted to be a lawyer and that just meant working a little harder.”
Sorensen enjoys spending time with his family. He is an avid cyclists and races road, cyclocross, and mountain bikes. He also enjoys snowboarding and skiing. Another little-known-fact about Sorensen, he was a guitarist in a classic rock cover band known as Spilbeedog.
“You have to love what you do and have people you love to come home to,” he says. “That’s how I define success.”
