Bank-independent storage of precious metals and other valuables

So what happens if customers decide to move their precious metals – from their bank to an independent storage facility, for example? According to most banking terms and conditions, this should not be a problem; depending on the contract terms, some financial institutions even guarantee the physical release of bars or coins. That’s what should happen in theory, but the reality of this process can be somewhat different. Most banks can implement these arrangements correctly, and do prioritise customer service. But unfortunately, not every credit institution is prepared to accommodate such requests. There are increasing customer reports of significant delays and stumbling blocks during the process of outsourcing gold and silver holdings.

It’s also important to make it clear these holdings are essentially the legally acquired property of each respective bank customer, and as such they have the right to expect to have their precious metals returned promptly. So all banks should be in a position to hand over these assets within a reasonable time frame. However, gross errors can occur with alarming frequency, with to the result that bank customers have to deal with such unexpected serious cases . Some of the proffered explanations include:

1. Lack of coverage: The precious metal holdings in the customer’s deposit account are not physically backed by the bank, e.g. not physically backed with sufficient amounts, or none of the correct denominations available. When this occurs, the financial institution must first procure the appropriate bars or coins, which can take a lot of time while their internal purchasers look for cheap deals. This can be a particular problem with precious metal accounts, ETFs, ETCs and similar instruments.

2. Inaccuracy: Due to internal errors in precious metal management, not all registered bar numbers assigned to the customer may actually be available. Identifying and correcting such errors can be time-consuming. Meanwhile, the customer is simply left waiting for clarification.

3. Disadvantages of collective storage: When the bank stores its customers’ precious metals in collective custody, the holdings of individual owners may not be clearly assigned. In such circumstances, customers are only entitled to receive back items of equivalent value.

4. The partner safe: This happens when the house bank no longer maintains its own safe facilities and stores its physical precious metals at a partner bank. The administrative response from both banks can be both cumbersome and time-consuming.

5. Delayed authorisation: Complex internal bank hierarchies often prolong the approval process, which is always detrimental to the customer. There is usually a distinct lack of properly qualified staff available to action customer retrievals.

6. Blocking the release: For no apparent reason, the bank’s legal or compliance department, for instance, can raise an objection which then blocks delivery of the precious metal to the customer.

7. Misplaced customer retention initiatives: No bank wishes to lose a customer’s business, and this may significantly delay the release of gold or silver investments. The implied threat of termination of the entire customer relationship may also be used as a pressure tactic to effect the desired outcome.

8. Lack of infrastructure: The bank unexpectedly sets unnecessarily stringent requirements for the delivery of precious metals, such as collection by special valuables transport. This in turn demands further (complex) planning, often generating increased costs for the customer. This can occur when banks no longer have the infrastructure required to handle physical precious metals.

9. Missing tax documents: The online magazines Handelsblatt.de and Focus.de report that a customer of a major Swiss bank has been waiting for the release of 8.5 kilograms of gold since 2014. The customer declined to provide evidence that his gold holding had been correctly taxed in Germany. The bank then terminated its agreement with the customer and withheld the gold, forcing the customer to take the matter to court.

As previously mentioned, these and similar errors do not represent the standard behaviour and response of credit institutions, but do catalogue some notable exceptions. Nevertheless, the storage of precious metals – whether in safe deposit boxes or via storage vaults – is clearly no longer part of the core business of banking institutions. However, the situation is completely different with independent companies such as Swiss Gold Safe, who specialise in storing valuables and have non-bank safe deposit boxes available to rent. In addition, their individual storage provision has many advantages over the collective storage uniformly offered by so many banks: In essence, individual storage ensures each holding is always clearly assigned to the respective customer. Swiss Gold Safe’s service responds promptly and efficiently to client requests, and is carefully designed to avoid unnecessary bureaucracy. You can find out more about this topic and compare the respective benefits of safe deposit boxes and individual storage.