Choosing a Precious Metals Advisor
Table of Contents
- 1 Choosing a Precious Metals Advisor
- 1.1 Here are 7 Keys Every Investor Should Follow When Evaluating A Precious Metals Advisor
- 1.2 Request a Complimentary Portfolio Review
Should you buy gold on your own online? Do you even need a precious metals or gold advisor? If you need one, what makes one advisor better than the next Choosing a precious metals advisor can feel overwhelming due to all the online services and D-I-Y investment advice available at your fingertips.
Where do you start, what should you consider, and how do you decide the right path for you?
To build a strong financial base and position yourself for maximum profits, it is imperative you partner with a trusted expert and advisor who has a documented track record of success, understands your goals, and shares your worldview. Decades of experience helps a seasoned advisor offer you a sharper perspective on the markets, and optimize recommendations that fit your strategic portfolio, delivering the best value for your dollar. You won’t find this type of wisdom from impersonal websites or from an inexperienced advisor.
A trusted advisor helps you hedge your bets against fees and expenses that reduce the value of your trade. He or she works with you closely to evaluate market timings and determine which metals position is best for you right now. This includes executing swaps at correct timings that increase your ounces for free, raising the overall value of your portfolio.
Here are 7 Keys Every Investor Should Follow When Evaluating A Precious Metals Advisor
1. Price Transparency
Some companies are not as transparent as others about the prices of their metals, like the weight or mint of the assets you’re investing in. You want an advisor who is transparent from the start. While gold is the only durable and reliable currency there is, varying weights and mints play a role in determining its value. Ideally, your advisor will educate you about these nuances
Generally speaking, the higher the weight, the lower the premium a consumer pays on the spot price, and the higher quality the mint, the higher the premium.
Additionally, it is critical to know any additional costs associated with the investment (like start-up costs) that are not always in fine-print.
Some companies require as much as $10,000 to begin building your portfolio. Interest is another factor: some brokerages offer 3 to 5 percent interest on your money, while others don’t offer you a nickel.
Other considerations include interest, safety deposit boxes, or storage fees (for offsite storage of your gold and other precious metals).
In short, make sure you know exactly what you are being charged for including extra costs.
2. Buying And Selling
How “easy” or flexible is it to order metals with your advisor? How about selling your metals?
No advisor can make guarantees around price or value, they should inform you of the current spot price and likelihood of your precious metals, namely gold, retaining their value.
Transaction fees are standard in the metals industry and some dealers offer you lower fees than others. Make sure you know about these up front.
If you want to sell your metals many advisors will buy your metals back, often at a lower cost than what your original purchase was priced at.
Being able to openly discuss any and all options for future transactions is an excellent quality to look for in your ideal advisor.
Most precious metals companies offer online real-time market data updates. These updates allow you to see current price movements as well as projections on the future movements of the price. (Your advisor should show you to how properly track your investment.)
3. Brokers vs. Dealers
Do you know the difference between a broker and a dealer?
A dealer is a person or firm that makes a purchase with the intent to sell it without altering its condition.
A broker is a person or firm that acts on the customer’s behalf to buy or sell, never retaining title to any property or service.
So when it comes to purchasing precious metals, who should you choose?
Before we answer that, let’s make one additional distinction.
There is a third option:
The most important difference between a broker, a dealer and a registered investment advisor concerns regulation.
Advisors have a fiduciary duty to their clients whereby they are bound by law to put the interests of their clients ahead of their own. If a conflict of interest arises, advisors must fully disclose the conflict or eliminate it.
By contrast, most brokers and dealers choose to become members of FINRA (the Financial Industry Regulatory Authority). With this affiliation, they are strongly encouraged to deal fairly with clientele. However, the ethics of all transactions and dealings are self-regulated.
For peace of mind and a guarantee that you are getting guidance with integrity (that is protected by law), we highly recommend working with an experienced advisor for all precious metals transactions.
4. Storage Considerations
Cost is, of course, a topic that requires consideration when it comes to precious metals storage. That said, there are additional storage considerations that should be discussed with your advisor.
Generally, your options for storage are to store with your advisor (which you should never do), store at home, or “store at home” with a certificate of storage (in lieu of storing physical gold at home.) Your certificate is directly tied to specifically numbered bars of gold you own and are eligible for an equal exchange of metal on demand.
Ask your advisor to review your choices and determine your best option.
5. Other Investment Options
Aside from purchasing your investment and storing it, some advisors can help you add precious metals to an IRA, or other investment/retirement fund.
If this is important to you, look for an advisor with an array of financial capabilities. Some companies offer IRA savings plans that use precious metals as the primary investment. While these accounts are less diversified, they are not typically offered through managed accounts, so they make good additions to retirement portfolios.
6. Be Wary of Sales Pitches (Reputation)
Walk away from any sales pitch that “plays down” risk, as well as sales reps who claim that written risk disclosures are “just formalities” required by the government, and therefore not necessary.
Reputable advisors are honest and upfront about investment risks.
Want to make sure you’re working with a reputable company? Do your background research. Check out the company on the Better Business Bureau or search for them at the State Attorney General’s Office. You can also contact former clients from reviews you read online and ask about their experience with the company.
7. Know Your Values & Understand Theirs
Prior to setting foot in a broker’s office or hiring “Joe Schmo” online, get clear on your personal values. Your worldview are your beliefs and convictions, what is most important to you. They are your “non-negotiables” that determine how you live, how you spend your time, the decisions you make, and how you spend your money.
For example, you may value “truth,” “directedness” and “honesty.”
Consistency may be another value of yours–you want someone you can count on, who gets back to you in a timely manner, and is there when you have a question or a need arises.
Or, you value creativity. You are energized by the idea of working with someone who can help you get the most value for your dollars and sees things outside the box.
Core values influence all of our decisions, our energy and our behaviors. In order to set yourself up for a win, it’s important you partner with a firm or individual whose values align with your own.
How do you determine your values?
Think about this:
- What have been your 3 greatest accomplishments? What about them made them great, or why did you succeed? What strengths did you have to tap into? (Write these down)
- What have been your 3 greatest failures? Even though you failed, what did you learn about yourself in the process? What mattered most to you in those failures? (Write these down)
- What common values do you see were most important to you in BOTH scenarios? (Write these down)
- Now, identify at least five values that make you who you are (and will determine who you best connect with). (Write these down)
Make sure your advisor aligns with your values. After all, it is personal.
Request a Complimentary Portfolio Review
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