Ownership models
The Four Types of 1031 Exchange Company
Every 1031 exchange company does the same regulated job. Who owns them decides what stands behind your money while they do it.
The short answer
Why ownership is the useful axis for 1031 exchange companies
You could sort these firms by size, by geography, or by how long they have been trading. Ownership is more useful than any of those, because it predicts the three things that actually differ: what balance sheet stands behind your funds, how close custody sits to a regulated institution, and whether the exchange is the firm’s whole business or one product among many.
What ownership does not predict is competence. There are excellent firms and indifferent ones in every category. Treat the model as a way of knowing which questions to press on, not as a verdict.
Title-company subsidiary
Owned by a title insurance underwriter and sold alongside the closing. The largest intermediaries by volume sit here.
A substantial parent balance sheet, but the exchange is one product inside a much larger company.
What to press them on
- Which office will actually run my exchange, and who is the named contact there?
- Is the parent's balance sheet legally behind my exchange funds, or only behind the title policy?
- Are funds segregated per exchange, or pooled across the book?
In the directory: IPX1031, First American Exchange Company, Asset Preservation, Inc.
Bank or trust affiliated
Run by or alongside a depository or trust institution, so custody sits close to the entity holding the money.
A short custody chain and a regulated holder, but affiliation alone does not tell you the account is segregated.
What to press them on
- Is the affiliated institution the depository, or only the trustee of record?
- How much FDIC coverage actually applies to a balance of my size?
- Does the affiliation change what happens to my funds in an insolvency?
In the directory: Exeter 1031 Exchange Services
Independent specialist
Owned by neither a title company nor a bank. Exchanges are the whole business, and the firm picks its own custody.
Usually the deepest expertise and the most direct service. Smaller balance sheets, so the bond and the custody terms carry more weight.
What to press them on
- What are the fidelity bond and errors & omissions limits, in dollars?
- Which commercial bank holds the funds, and in whose name is the account?
- How many exchanges have you completed, and how many of my structure?
In the directory: Easy1031, Accruit, 1031 CORP.
Institutional administrator
A fund administrator for which 1031 work is one mandate among several, aimed at sponsors rather than individuals.
Built for scale, reporting and unusual structures. Individual investors are rarely the target client.
What to press them on
- Do you take individual exchangers, or only sponsors and programmes?
- What is the minimum exchange size you will accept?
- Is pricing bespoke, and what does it include?
In the directory: JTC Americas
The four types of 1031 exchange company, side by side
| Model | Owned by | Exchanges are | Main strength | Main thing to check |
|---|---|---|---|---|
| Title subsidiary | A title insurance underwriter | One product among many | Scale and closing-side convenience | Which office and officer you actually get |
| Bank / trust affiliate | Or alongside a depository or trust | A core service | Short custody chain | Segregated or pooled, and FDIC reach |
| Independent | Nobody; privately held | The entire business | Depth of exchange expertise | Bond, E&O limits and depository bank |
| Institutional | A fund administration group | One mandate among several | Reporting and complex structures | Whether they take individuals at all |
Questions about intermediary types
What are the different types of qualified intermediary?
Four, defined by ownership. Title-company subsidiaries are owned by title insurance underwriters and are the largest by volume. Bank and trust affiliates sit alongside a depository or trust institution. Independent specialists are owned by nobody else and do exchanges as their whole business. Institutional administrators are fund administrators for whom 1031 work is one mandate among several, aimed at sponsors rather than individuals.
Is a title company a good choice as qualified intermediary?
It can be, particularly when your sale and purchase both close through that title company's offices, where the coordination is genuinely simpler. The tradeoff is that the exchange is one product inside a very large organisation, so the quality of service depends heavily on which regional office and which officer you are assigned. Ask who specifically will run your file.
Does using a bank-affiliated intermediary make my funds safer?
Not automatically. The affiliation shortens the custody chain, which is worth something, but it does not by itself tell you whether your money sits in a segregated account or a pooled one, or how much FDIC coverage reaches a seven-figure balance. Those are separate questions and they have to be asked directly.
Why would I use an independent qualified intermediary?
Because exchanges are the entire business rather than a line item, so the expertise is usually deeper and the service more direct. The tradeoff runs the other way: there is no large parent balance sheet, so the fidelity bond, the errors and omissions cover and the custody arrangement carry more of the weight and deserve more scrutiny.
Which type of qualified intermediary is best?
None of them categorically. The model tells you what questions to ask, not which firm to pick. A well-run independent with a segregated account and a large bond protects your funds better than a poorly run title subsidiary, and vice versa. Ownership narrows the field; the written answers about custody, insurance and fees decide it.
One of the companies on this map charges nothing to set up
Easy1031 is an independent qualified intermediary. It charges $0 for a standard forward exchange and shares the interest earned on your funds rather than keeping it.
Easy1031 publishes this site and appears in the directory above. It has a commercial interest in you starting an exchange, worth weighing, and worth comparing against other intermediaries.