Frequently Asked Questions
WHAT KIND OF GOLD OR SILVER DOES AFE SELL?
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.
WHAT IS AN ALLOCATED CUSTODY ACCOUNT?
Allocated Custody Accounts are 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.
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 AN ALLOCATED CUSTODY ACCOUNT?
One of the most common reasons that clients choose AFE’s allocated custody 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 Relationship Managers 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 AN ALLOCATED CUSTODY ACCOUNT?
Any individual or entity may apply for client account, including natural persons, companies, corporations, natural and registered trusts, or other entities.
Institutions such as banks, funds, pensions, endowments, and family offices are welcome to inquire about Institutional level services with AFE Custodial Company →
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. There are no spreads. AFE charges a fee for administration, vaulting, insurance, and auditing costs only.
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 Apply for an account
WHAT IS THE MINIMUM AMOUNT REQUIRED TO OPEN MY ALLOCATED CUSTODY ACCOUNT?
The minimum account opening value is $50,000 USD.
WHAT ARE GOLD AND SILVER SAVERS PROGRAMS?
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. Client must have an allocated custody account funded with the minimum opening value to be eligible for this program.
WHEN I HAVE PRECIOUS METALS IN AN ANGLO FAR-EAST ALLOCATED CUSTODY ACCOUNT, DO I ACTUALLY OWN THE METALS?
Yes. When AFE allocates gold and/or silver to your custody account, 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” → – and means you are the full legal owner of your metal. AFE may not lend, lease, leverage, or encumber your metal in any way.
WHERE IS THE GOLD AND SILVER HELD?
Anglo Far-East uses only the most reputable, accredited private vaulting companies and is at all times managed under 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 your 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. Learn more about why AFE vaults in Switzerland →
WHAT PERSONAL INFORMATION AND IDENTIFICATION IS REQUIRED TO ESTABLISH AN ALLOCATED CUSTODY ACCOUNT?
HOW DO I FIND OUT MORE ABOUT OPENING AND OPERATING ALLOCATED CUSTODY ACCOUNTS?
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.
GOVERNANCE IN BRIEF
AFE retains the services of an Independent Trustee, which is a licensed CPA and Auditing firm. There is no cross-ownership or cross-directorship between AFE and the Independent Trustee. The Independent Trustee provides several important functions in AFE’s custodial governance. The Trustee 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 Trustee. 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.
INTERNATIONALLY DIVERSIFIED ALLOCATED CUSTODY
One of the reasons to use an allocated custody account 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.
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.
SECURE ONLINE BUY OR SELL
Allocated custody accounts allow the client to securely, rapidly and privately transact physical gold or silver through the security of online encrypted electronic lodgment of instructions.