Bullion in a Self Managed Super Fund (SMSF)
As bullion dealers we have seen a very significant surge in the number of purchases through Self Managed Super Funds (SMSFs). The majority of these purchases are coming from brand new entities that have just been set up, and large portions of their balances are being put into precious metals. We have also seen a wide range of ages with many SMSFs set up by people in their early 30s. Balances are big and small, with people from a range of backgrounds putting their wealth for retirement in precious metals. Investors are leaving industry funds in their droves, and looking to reduce their counterparty risk.
When we think about the point of Super, it’s to preserve wealth that will be available for people when they retire. With faith in politicians, banks and institutions more generally trending steadily down towards zero, and inflation on the rise, people are looking for assets that will stand the test of time, and will be there for them after they finish working.
Two months ago we saw major tremors in five major pension funds in the UK, with the Bank of England forced to act to stave off bankruptcy. While Australian superannuation funds don’t guarantee a fixed return for retirees, there is some cause for concern with Australian industry funds holding major exposure to ASX and US listed equities. This week we saw Amazon lay off 10,000 staff, Meta Facebook fired 11,000, and Twitter is cutting back 3,700 employees, half its workforce. Although many of those ex-Twitter salary recipients were charged with policing free speech on the social media platform.
So… how do you buy bullion or crypto in your Self-Managed Super Fund? It’s easy.
First you need to supply your trust deed and related documents. We set up an account for you in the system and then any purchases or sales can be put in the name of your SMSF. Depending on your auditor, they may prefer you to take out a storage box with the likes of Reserve Vault or The Melbourne Vault in the name of your SMSF and you can take a photo each year as a part of your audit. Some require an independent audit and insurance and both the Reserve Vault and The Melbourne Vault offer both at very competitive prices.
Other auditors may prefer you have 3rd party custodial storage. SMSFs that are looking for fully-insured custodial bullion storage with us have two options:
ALLOCATED: You have segregated secure storage where the exact bars that you have purchased are held for you. Even if we were theoretically to stop making a certain type of bar, or change its design, in 10 years when you want to access that bar, it will still be in there despite leaving our online shop many years earlier. You pay $13 per ounce per year for the gold (+GST), and $17 per kilo per year for the silver (+GST).
UNALLOCATED: Your holdings are a part of a fully backed pool of bullion. When you buy for example 20 kilos of unallocated silver, we are likely to keep it in the form of 5kg bars, or buybacks that we were planning to re-melt, or even larger 10kg+ blocks that we have sourced. The advantage of the program is that there are no storage fees. On the flipside, if/when you want to take possession of the metal, the specific bars you get are our choice. For investors who purely want the metal in a place they can access it with ‘no frills’ this is the most cost effective option.
For both, you will have your holdings viewable through our online portal at any time and you are able to generate your own statement of holdings yourself. To sell, you only need to call or email. To take delivery of your metals, there are no fees. Each year you can have a statement of holdings with the price at 30 June to give to your accountant.
With all of the uncertainty in markets and currencies, it certainly pays to have at least a percentage of your retirement fund in the one asset class that has no counterparty risk and has stood the test of time throughout the administration of various governments, nation states, cultures and ages.
Whether you are looking to set up an SMSF, or if you already have one, for more information on buying bullion or crypto via your SMSF, please see our website or speak to one of our friendly consultants.