Understanding the Direction of Investment (DOI) Process – What’s Required and How Long It Takes

What is a Direction of Investment (DOI)?

A Direction of Investment (DOI) is a formal instruction submitted by an account holder to direct their Self-Directed IRA (SDIRA) custodian to process an investment. At American Estate & Trust (AET), the DOI serves as the official submission of an investment request and includes all necessary documentation required for compliance review and processing.

What’s Required to Submit a DOI?

To ensure a smooth and timely processing of your investment, AET requires the following when submitting a DOI:

1. Completion of the Online DOI Form

• The DOI form is submitted through AET’s online portal.

• All required fields must be completed accurately to avoid delays.

2. Supporting Investment Documentation

• Investment documents must be attached to the DOI at the time of submission.

• Examples of required documents may include:

  • Subscription agreements

  • Operating agreements

  • Offering memoranda

  • Promissory notes

  • Certificates of investment ownership

• Failure to provide required documents will result in delays or rejection of the investment request.

3. Asset Approval (If Applicable)

• Certain assets require prior approval before the DOI submission. For example, assets other than cash transfers must be reviewed by AET to ensure they meet IRS and custodian guidelines.

4. Sufficient Funds in Your IRA

• The SDIRA must have enough available funds to cover the investment and any associated fees.

• If a transfer or rollover is needed to fund the investment, this should be completed in advance to prevent delays.

5. Acknowledgment of Compliance Responsibilities

• The account holder is responsible for ensuring that their investment does not violate IRS rules, including prohibited transactions.

• AET does not provide investment, legal, or tax advice and does not conduct due diligence on investments.

How Long Does the DOI Process Take?

The timeline for processing a DOI depends on multiple factors, including completeness of submission, document review, and external processing times. Below is a general timeline:

Step 1: Submission of DOI (Day 1)

• The account holder submits the DOI with all required documents through the AET online portal.

Step 2: Compliance Review (1-3 Business Days)

• AET reviews the submitted documents to ensure compliance with IRS regulations and internal policies.

• If additional information is required, the account holder will be notified, which may extend processing time.

Step 3: Funding of Investment (1-2 Business Days after Approval)

• Once approved, AET will initiate the funding process as directed in the DOI.

• Some investments may require additional coordination with investment sponsors, affecting processing times.

Step 4: Confirmation and Recording (1-2 Business Days)

• AET records the transaction, updates the account balance, and provides confirmation to the account holder.

Potential Causes for Delays

Several factors may extend the DOI processing timeline, including:

• Incomplete documentation – Missing or incorrect documents will require resubmission.

• Insufficient funds – If funds are not available, the account holder must arrange for additional funding.

• Compliance concerns – If an investment raises compliance red flags, additional review may be required.

• External processing delays – Some investments require actions from third parties, such as investment sponsors or financial institutions, which can impact processing time.

Conclusion

Understanding the DOI process is essential for ensuring a smooth and efficient investment experience. By providing complete documentation, maintaining adequate funds, and ensuring compliance with IRS regulations, account holders can help minimize delays. AET is committed to processing DOI requests in a timely manner while ensuring adherence to all custodial responsibilities.