Frequently Asked Questions
WHAT IS A BULLION ACCOUNT?
Bullion accounts (sometimes referred to as “Metal Accounts”) operate similar in concept to a normal bank account, excepting that the accounts are held in, and denominated in ounces of gold and/or ounces of silver, and are not operated under ‘fractional reserve’ methods – this basically means for each ounce of gold or silver on account, there is an actual ounce of gold or silver in the vault. Bullion accounts allow the account holder to purchase bullion at the metal spot price on any given day, plus a small administration, management, and storage fee. In most cases, buying gold in other forms, such as coins or bullion bars, command a much higher premium over the metal spot price than what can be achieved by buying through a bullion account.
WHAT DOES ALLOCATED MEAN?
When AFE Allocates bars to a client, this means the clients’ holdings are identified with a specific list of bars showing the unique bar number in the clients online account statement. It also means there is a physical gold or silver bar in a vault that is identified in inventory by serial number and fine weight that will match the actual bars in the vault. These bars are individually sight verified by a recognized international auditor, and cross verified by an Independent Trustee.
WHY ESTABLISH A BULLION ACCOUNT?
One of the most common reasons that clients choose AFE’s bullion accounts, is to allow for geo-political diversification in their bullion holdings. In the words of King Solomon: “Put a portion of seven and eight throughout the land, for we know not what trouble may arise”. Another important factor to consider, is ease of liquidation. Many make the mistake of purchasing gold and silver without thinking through how and where they will sell it later. AFE provides outstanding liquidity to our clients, by keeping the gold within the “Good Delivery” system. For more information on geo-political diversification, ease of liquidation, and the benefits of such arrangements, please contact us to speak with one of our bullion account specialists directly.
WHAT DOES “GOOD DELIVERY MEAN”?
There is a recognized global system used on a ‘professional’ level within the bullion markets that major banks, central banks, and governments use to clear large transactions in investment grade gold. This system is called the LBMA “Good Delivery” system. The LBMA is a trading and standards body that consists of banks, refineries, and security transport and vaulting companies who all cooperate to provide a framework for settlement of gold without having to remelt it each time the gold is sold. As long as gold and silver bars are retained within the “Good Delivery” system, they are accepted globally by other members of the LBMA as certified pure gold. This translates into additional ease of liquidity for clients of AFE.
WHO CAN APPLY FOR A BULLION ACCOUNT?
Any individual or entity may apply for client account, including natural persons, companies, corporations, natural and registered trusts, or other entities.
FEES AND PRICING
Initial account application and establishment is free from charge.
AFE purchases physical gold and silver bullion bars meeting the ‘Good Delivery’ standard in its own name on behalf of its clients.
AFE purchases bullion at the interbank spot price plus a premium which includes fabrication.
Our fee includes:
* Management services, including all administrative matters in connection with the purchase, segregated storage, custody and delivery of the precious metals, as well as later resale
* High security vault storage in accredited high security vaulting facilities
* Armed guards present at all stages of handling of the precious metals
* 7 Years of vault storage costs
* Insurance coverage to full market value by a Lloyds of London underwriter
* Sight verification of bars entering the vaults by a third party bullion auditor
* Account Statement and Valuation on request
For access to our fees schedule online, please Qualify for an Account
WHAT IS THE MINIMUM AMOUNT REQUIRED TO CREDIT MY BULLION ACCOUNT?
For bullion accounts, AFE has a minimum account guideline of $50,000 USD. As an alternative to traditional bullion account funding methods, AFE is pleased to offer our “Gold Savers” and “Silver Savers” programs. Many clients choose to treat this as a regular savings account, and will use a credit card or debit card to credit their bullion account with an amount of just a few hundred dollars each month.
WHEN I HAVE PRECIOUS METALS IN AN ANGLO FAR-EAST ACCOUNT, DO I ACTUALLY OWN THE METALS?
Yes. When AFE credits your account with gold and/or silver, you have full outright ownership of those precious metals. The concept of this is a bit different than a traditional banking arrangement, where when you supply your funds to a bank, you are actually no longer the legal owner of that money. The bank is allowed to do what it pleases with the money such as lend it to other customers, so long as the bank returns your money to you upon request. With AFE, your gold and silver are simply held by AFE acting as your custodian – this is known as a “Bailment” agreement- and means you are the full legal owner of your metal. AFE may not lend, lease, leverage, or encumber your metal in any way. Clients may request to have a ‘vault receipt’ in their own name, minimums apply.
WHERE IS GOLD AND SILVER IN THESE ACCOUNTS HELD?
Anglo Far-East uses only the most reputable, accredited private vaulting companies and is at all times managed under our strict custodial governance. The vaults are primarily located in Switzerland, and importantly, safely and securely store your precious metals outside the commercial banking system which reduces AFE clients exposure to systemic risk. As these vaults are not owned, managed, or controlled by banks, your precious metals completely avoids the risk that can accompany storing your metals with a traditional bank.
WHAT PERSONAL INFORMATION AND IDENTIFICATION IS REQUIRED TO ESTABLISH AN ACCOUNT?
HOW DO I FIND OUT MORE ABOUT OPENING AND OPERATING BULLION ACCOUNTS?
To apply for a bullion account follow the NEW ACCOUNTS link at the menu of any page or click HERE. You may also contact us to speak directly with a bullion account specialist for personalized assistance and answers to your important questions.
HOW CAN I BE SURE THAT THERE IS GOLD IN THE VAULT TO COVER THE GOLD THAT I OWN?
Anglo Far-East operates under strict internal and external governance. At all times there is a minimum of 100% gold and silver in the vaults to cover all client claims. Clients may request to see the Trustee Statement, Bullion Auditors Statement, Vault Access Statement, Proof of Insurance, or Certificate of Audit at any time. Full details on AFE’s corporate governance is available by following our GOVERNANCE link or click HERE
GOVERNANCE IN BRIEF
AFE retains the services of an independent 3rd party Trust Company. There is no cross-ownership or cross-directorship between AFE and the Trust Company. The Trust Company provides several important functions in AFE’s bullion custodial governance. The Trust Company appoints the Bullion Auditor. The appointed Bullion Auditor’s presence is required before a vault access can be made by AFE. No access can be made to bullion vaults without the authorization and signatures of both AFE and the Trust Company. These steps are important to your safety, and they prevent any single party, including AFE itself, to remove metal from the vaults without a series of well documented and redundant fail-safes being observed. AFE utilizes the vaults of accredited members of the London Bullion Market Association, and all bullion is insured to a full 100% of its current market value.
HOW CAN I KNOW MY PERSONAL RECORDS AND DEALINGS WILL BE KEPT PRIVATE?
Information security and client privacy is one of the highest priorities of AFE. We maintain strict corporate policy and procedures to insure the privacy and security of our client records. These practices ensure that your records will not at any time fall into the hands of unauthorized third parties, and include;
1) Strict non-disclosure, non-information sharing policy. At no time will your identification or account records by made available to non-affiliated third parties.
2) A blend of international jurisdictions that strictly protect client privacy by law
3) Leading edge technology and encryption systems
4) Management and Staff: Our thoroughly screened staff understand the responsibility that comes with managing client’s personal information, and are committed to protecting and upholding our client’s complete right to full privacy. Client information is firewalled internally versus access to all staff except personnel under the direct supervision of the AFE Treasury Director. All accounts are referred to internally by account number only.
HOW MUCH SHOULD WE OWN IN PRECIOUS METALS?
It is generally our recommendation that you should own somewhere in the vicinity of 5% to 20% of your total net worth in precious metals. By net worth we mean your unencumbered, freehold, net worth. Everybody’s situation is a little different. That percentage should also depend on factors such as your personal short-to-medium term outlook for the future, your perceived future earning capacity, your age and other factors.
IS IT BETTER TO OWN GOLD AND SILVER IN THE FORM OF COINS OR A BULLION ACCOUNT?
Either method of ownership has advantages over the other.
Bullion coins allow you to own gold and silver in a defined, small form. Coins are instantly accessible and tradable should the immediate need arise, making them the ultimate financial catastrophe insurance. However, due to the manufacturing (minting and fabrication) and shipping costs, purchasing gold and silver in the form of coins can be more expensive than bullion accounts. This added margin is usually lost should you decide to resell those coins ahead of a financial catastrophe. As with any valuable, there are safety and storage issues to be considered. Finally, considerations for liquidation of metal holdings, especially in large quantity must be considered.
The primary reasons to use bullion accounts is to achieve geo-political diversification in your holdings, as well as ensure you have easy access to markets when you are ready exit your metals positions. One thing that some fail to think through, is how, where, and when they will sell their metal if they take physical delivery, and the discounts that may have to be taken on value to do so. AFE clients are able to liquidate some or all of their holdings at will, with a simple encrypted message from anywhere in the world. AFE will take sell orders, liquidate metal into cash using AFE’s institutional access to global markets, and wire the funds to your choice of bank account. This flexibility and ease of liquidation provides a sense of security, being able to access emergency capital from anywhere in the world. Bullion accounts still provide the account holder with full outright gold and silver ownership, and also provide several advantages over owning precious metals in other forms. Due to the lower initial fees involved, owning precious metals in your bullion account means that you can buy and own more gold and silver for your investment. Your bullion is professionally managed by security vault specialists and fully insured to its current market value.
WHAT ARE THE ADVANTAGES OF AFE OVER THE BIG BANKS THAT OFFER GOLD ACCOUNTS AND STORAGE?
INDEPENDENT VAULT STORAGE AND GOVERNANCE: Increasingly, research and analysis now in the public domain, indicate large short positions and highly fractionalised bullion holdings on the books of large bullion banks. Many market analysts and commentators fear future systemic failure in the financial system, putting at risk bullion holdings of bullion service providers utilizing the bullion banking industry for the storage of their clients bullion holdings. AFE’s independent vaulting and strict governance fully protect and insulate its client’s from this type of risk. By using private vaults that have no association to banks, AFE is able to offer its clients a means of privately, safely, and securely storing wealth that is not at risk should there be some form of disruption in the banking or financial markets. The peace of mind that comes from knowing this is perhaps one of the top benefits of being an AFE client.
100% BULLION BACKING & GOVERNANCE: Client Bullion Accounts are at all times backed by a minimum of 100% gold or silver bullion. Bullion holdings held on behalf of bullion account holders are independently audited and verified to confirm an a minimum of 100% bullion backing, and are further protected by an Independent Third Party Custodian.
OUTRIGHT OWNERSHIP: AFE bullion account holders have OUTRIGHT and COMPLETE ownership of an unecumbered, actual and defined amount of physical bullion.
With many bullion equity and investment schemes, the shareholder owns a beneficial interest (or shares) in a company, investment trust or equity, which in turn owns physical bullion (most times this bullion is stored by institutional bullion banks – see Independent Vault Storage above). The value of the shareholder/investor’s shares is determined by the value and security of the company’s bullion holdings. Owning shares or a beneficial interest in a company is not the same as OUTRIGHT ownership of physical gold and/or silver.
SECURITY & SAFETY: The operation of Bullion Accounts is designed to fully protect the account holder and their bullion holdings. Safety features have been designed to provide the greatest level of security, while maintaining the individual account holder’s privacy, and ease of account dealings.
IS IT POSSIBLE TO TAKE PHYSICAL DELIVERY?
Yes. AFE offers clients the option to take delivery of your serialized gold or silver bars. Clients are responsible for all costs of delivery, including any applicable taxes, transport, security, insurance, and customs duty.
ACCESS TO THE PROFESSIONAL MARKET
AFE deals only in LBMA “Good Delivery Bars” of 400 troy oz. fine weight for gold, and 1000 troy oz. for silver. These bars are the defacto standard for gold settlement amongst nations of the world, central banks, and large institutions.
SECURE ONLINE BUY OR SELL
Bullion accounts allow the client to securely, rapidly and privately transact physical gold or silver through the security of online encrypted electronic lodgment of instructions.