Guernsey Mint Refined holds its client assets in an allocated pool - that is to say that if 100 clients each individually make 1kg gold investments, then we will buy and hold 100 x 1kg gold bars for them. Not all bullion providers do the same ...
It would be far cheaper for us, and therefore far easier to charge our clients less (or charge them the same as we do now and make ourselves more money), to buy 8 x 12.5kg bars in order to hold 100kg of gold in our vault. We could then promise the 100 clients that they had a 1kg gold entitlement - as this would be true, after all. We could reconcile the individual client records back to our aggregate position daily knowing that each of our clients had a physical holding equivalent to the investment they had made.
The system works great until a client wants to collect their 1kg gold investment and take it home with them in physical form - something we consider is their right, rather than a privilege, at Guernsey Mint Refined.
At this point, one of the 12.5kg bars held in the vault would have to sent back to the refinery to be melted down and turned into 12 x 1kg bars and a 500g bar ... sound expensive? It is. We understand it is costing clients of other bullion providers very dearly.
So, we've got to be honest, we don't like the idea of fractional ownership of a (particularly valuable) physical asset ... do you?
Whilst we would be most upset to see the shiny stuff leave our custody, Guernsey Mint Refined operates, without exception, in a manner which ensures that each and every one of the clients could collect their 1kg bar and take it home with them if that is what they wanted* ... letting them have their own cake to eat.
* with a couple of days' notice and subject to a collection fee of no more than $400!
Saturday September 1, 2012 by