Auditing and Transparency
At AFE, our objective is to provide the highest levels of transparency while maintaining strong privacy for our clients. To this end, we have implemented a strong system of governance and audit trail to protect the precious metals held on behalf of our clients. It is a requirement that our client have 100% ownership of their gold and silver bullion and that clients know their metals are stored in the safest and most private way possible.
Any time AFE conducts a “Bailment,” it is a requirement that a third-party independent and well-recognized auditor is in attendance. This auditor performs a “Vault Sight Verification” audit comparing the individual gold and silver bars that are entering vault storage against a Weight List supplied by the refinery. This Refiner’s Weight List includes the manufacturing refinery, the unique serial number on each gold or silver bar, the exact weight in fine troy ounces, and the year of manufacture. This audit is also cross verified by an agent of the vault company who signs off on the Certificate of Deposit with the sight verification auditor. Further, the auditor provides an independent Sight Verification Report of the Bailment.
These records are provided to an independent Trustee company that has access to AFE’s account ledgers and acts as a custodian of records. The independent Trustee verifies that the individual bar numbers and fine ounces of metal from the Refiner’s Weight Lists match exactly the Site Verification Report from the Auditor and the Certificate of Deposit reports from the vault company. The independent Trustee verifies that gold and silver bars allocated to clients reflect the exact number of fine troy ounces contained within the aggregate Certificates of Deposit and Sight Verification Audit reports, that no gold or silver bars are over or double allocated to clients, and that a one-to-one ratio of troy ounces in the vault-to-AFE records exists at all times.
Copies of Vault Access Statements, Proof of Insurance, Trustee Statements, Bullion Auditor Statements, and Certificates of Audit are available to clients within their secure online accounts and upon request. Further, these documents can be made available to qualified potential clients conducting Due Diligence.
Why doesn’t AFE make such documents available on the public internet?
In AFE’s experience, any potential client who is serious about their investment decisions are happy to request due diligence information from us. It is our policy to provide 100% transparency to our clients and to prospective clients; however, we do not agree that this information should be made available for casual inquiry, and therefore, these documents are not available on the public internet. This in no way reduces the ability of a prospective client to conduct thorough due diligence on our firm.
Why doesn’t AFE publish information about how much metal is held in custody?
AFE believes client privacy is of paramount importance which is reflected in AFE’s structure, policies, systems and security. In our view, we consider publishing public information about metal held in custody on behalf of clients is a breach of client privacy. AFE clients appreciate the fact that we are not advertising to the world how much metal they have or how much metal AFE is a custodian of.
Contrary to what some commentators and analysts say, many of AFE’s clients believe gold is still a vitally important reserve asset and strategic resource. Many wars have been fought over it throughout history, and to this day it still forms a core position for the world’s central banks and is still counted as a reserve asset. Gold may again at some point become the last line of defense in terms of personal wealth protection.
While the practice of advertising how much metal is held in custody by some service providers may have some advantages in terms of marketing, at AFE we prefer not to breach our client privacy by advertising where and how much of our client’s wealth is stored in the form of precious metals.