Ep.5 Season 2 - Gold and Silver Storage - What Do You Really Own? Types of Storage Explained

I'm marki actually welcome back inside the vault [Music] [Applause] [Music] today we're focusing on a subject that I take very seriously especially because it ties in with exactly what we do here at swp you see sometimes when people buy precious metals from a vendor or a broker for storage in one of their vaults or storage programs they don't always know what they're getting one of two things can happen either the marketing material from the vendor or the dealer is misleading and I've seen this happen often throughout my career even from some of the more reputable dealers in the business or the legalities of the storage contract can be buried in the storage agreement or the fine print of the terms and conditions people often don't understand them or don't take the time to read those contracts so today here inside the vault with the help of these visual cues I'm going to explain to you that different types of storage accounts that exists including unallocated allocated commingled and fully segregated storage we'll discuss the pros and cons of each and share some best practices with you so you don't get taken advantage of we're going to start by talking about unallocated accounts represented by this pile over here so the first question is what is an unallocated account basically in simple terms what it means is that you own precious metals that are part of a larger pool you don't have any direct title to specific bars or coins what you own is a share of a pool of precious metals held by the company on your behalf so the next question is what do you actually own when you have metals in an unallocated account what you could own is some rounds like these ones here it could also be in the form of a bar of a dysfunctional at this point it could be in the form of some junk silver that is bought back under spot so it's got lesser value than some other products but more often than not sadly you might actually just own a piece of paper and the reason that this happens because when you buy an unallocated product is basically you're giving the dealer permission to manipulate their inventory as they see fit to satisfy their contract to you you literally can be left holding a piece of paper and in some cases you can be literally left holding nothing at all because when all of these movements are happening within the company's back office metals moving from one depository to another scrap metal is going to a refinery they're offset in your trade with another paper trade it's really hard for you to distinguish what you actually own you certainly don't own personal property any longer and there's no way that an auditor could possibly come in at any point in time and fully audit the company's position and retrace your metal the advantages of an unallocated account is that they're very cost effective and the dealer can do this because again you're giving them the right to manipulate and use the position for their own means so in exchange they'll offer you very low Commission's or premiums in order to own this product the cons are that you're not able to establish clear ownership of personal property and again you will not be able to have this metal audited typically you can withdraw physical precious metals from unallocated accounts although you have to keep in mind you're gonna have to pay the premium shipping and insurance for these products before they're delivered to you the next type of account that we're going to speak about is the allocated commingled accounts so that's one step up from the unallocated accounts now we know where the metal is the problem is we might not know what form it comes in or who it belongs to there are two possibilities when you're buying into a commingled program what often ends up happening is that lets say you're investing in silver and you buy a thousand dollars worth of silver you might be buying a sliver of a much larger silver bar that is co-owned by a number of different people the problem here again a little bit like with unallocated is you're gonna have troubles identifying clear ownership of the personal property the second scenario is that when you're buying precious metals that are going into a coal mingled pile you may not know which brand of product you're paying for or eventually receiving I'm gonna give you a real-life example that recently happened to one of our clients to illustrate the point I'm trying to make here mr. Jones purchased 210 ounce pamp suisse bars for deposit at a facility inside the United States about five years ago because he was buying pamp suisse bars he paid a higher than normal premium for a product that has an excellent reputation and liquidity five years go by he decides to transfer his 20 ounces of gold to our facility when the products arrived to our facility that they weren't to ten ounce pamp suisse bars they were to ten ounce generic gold bars of lesser brand strength when we informed the client that the products had been swapped out he came to realize that he had entered a commingled storage program at the initial facility the problem that he faces now is that he's holding two products of lesser value and brand strength than what he originally purchased so his two bars went into a coma a gold pile and then five years later two different bars came out of that pile leaving the client with a problem he's now spending time energy and money debating with the original facility about what went wrong so just an example of what can happen when you're buying into a commingled situation the pros again of buying into commingled accounts is that you're gonna save a little bit of money the cons are that you're gonna have a hard time establishing ownership of personal property and auditing that personal property you're certainly not going to be able to go to the facility and say I'd like to see my thousand dollars worth of silver they're just gonna point you out a larger silver bar or you could have the same scenario that our client faced where your products are being swapped with others potentially of lesser value the final type of storage account that we're going to talk about is fully allocated and fully segregated I call this old-school when you purchase precious metals that are in a fully allocated fully segregated account you own the physical gold and silver down to the exact coin and bar that you purchased they can be identified all the way down to the serial number it is your personal property very easy to identify very simple to audit by third parties and also very simple to audit by yourself if you can make your way down to the facility and visit your precious metals and take a look so when you're buying precious metals for the fully allocated fully segregated accounts they're literally being purchased and deposited into your own storage bins they're not being commingled like we saw earlier they're not a fractional amount of a larger product and they're certainly not something that we're not clear on at all the ownership of your product is very very clear as you can see for example you'll have your own unique identifiers for your physical storage location and then those products are going to be physically segregated from anyone else in the vault I can go down to the facility open up my box audit the products that I purchased make note of the serial numbers that come on the bars that are unique to these products return them myself and then that box is most likely going to be sealed up with another unique identifier again it makes the whole process very very clear very very definitive that I am the owner of these products and that's really what you're after the last thing that you need in your life is the uncertainty of who owns this property is it the dealer is it a bunch of people or are you the clear owner the pros of owning physically allocated and segregated metals are that it makes auditing very straightforward not only for third parties but also for yourself as well you're eliminating any third party risk from the equation because you are the legal owner of this personal property the company doesn't have the right to manipulate it in any way we're gonna leave you with four insider tips to help you avoid being taken advantage of number one always buy from a reputable company this is going to reduce third-party risk and help you avoid fraud or potential criminality if possible buy from a company that boasts sells the precious metals and stores the precious metals which will help you cut out the middleman number two read the contract carefully make sure you understand what you're getting if you don't understand don't hesitate to ask the dealer or broker questions they should be able to give you clear answers so that you know exactly what you're getting into number three make sure a physical audit of the metals is conducted at least once a year by a third party and finally make sure to deal with a company that allows you the possibility to come down and visit and self audit your metals for example here at swp given only 24 hours notice we allow our clients to come down and conduct a self thank you for joining us for this episode of inside the vault I hope you took away some very important notes on how to better understand the type of storage options that do exist out there by listening and employing these best practices I'm sure you'll find a safe home for your precious metals I'm mark Yaxley if you have any more questions feel free to email us at info at SW PKM calm you can tweet us at swp gold or subscribe to our YouTube channel and enjoy more great episodes of inside the vault [Music] [Applause] [Music] you

Channel: Strategic Wealth Preservation - SWP

Views: 96,367

Keywords: Offshore Storage, precious metals, metal, SWP, Strategic Wealth Preservation, gold, gold bars, gold coins, bullion, bars, management, finance, silver, silver coins, silver bullion, gold bullion, palladium, platinum, secure, invest, investment, vault, cold storage, offshore, Cayman Islands, Grand Cayman, gold stacking, silver stacking, deposit, safe, security, deposit box, segregated, travelling with gold, travelling with silver, storing gold, storing silver, collecting coins, offshore storage

Id: E_fxByi7sLc

Length: 11min 18sec (678 seconds)

Published: Fri Apr 17 2020