More Than OffShore Gold vs OnShore Gold Storage
Is Switzerland Worth It?
For U.S. gold buyers it makes sense to look at and compare Hard Assets Alliance to Global Gold when it comes to buying and storing actual physical coins and bars that you own and want kept outside the banking system entirely.
Before I get started, a fair warning: I am not just trying to “diss” Global Gold or Switzerland though it might sound like it. I have known the principles involved in Global Gold for many, many years, and Switzerland is a wonderful country.
It’s just that, even when the Swiss Franc was lower vs the dollar than it is now, Switzerland is just plain EXPENSIVE!
In the past we were coached to think that Swiss law and Swiss privacy was worth it. But is it?
- The Swiss bankers (not connected with Global Gold, just speaking of Swiss Banking in general) aren’t just recently being revealed as schmucks for caving to U.S. government demands on everything, changing rules, revealing private information – something new every month – these are the same class of people who were happy to keep stolen Jewish money from back in World War II.
- There is no Swiss privacy anymore.
- There is no Swiss “trust”.
- There is no gold backed Swiss Franc anymore. Partial gold backing simply doesn’t count when they trash their currency over 15% via the U.S. Dollar practically overnight so as to, in effect, peg the Franc to the Euro; the fiat currency of experimentation.
While Global Gold representatives will still tout the “Swiss advantage”, we personally are starting to think it’s little more than better chocolate – if you can afford it.
IMPORTANT NOTE: We have accounts at BOTH of these providers (and have no intention of closing out either) so we – unlike many if not most other reviewers – are speaking from personal experience, not brochures!
Hard Assets Alliance versus Global Gold: The Similarities
Both Hard Assets Alliance and Global Gold offer you the opportunity to specify specific Gold coins and bars (Global Gold is offering only coins except in Switzerland when I checked while writing this) and store those in a secure vault allocated specifically to your name. There is no counterparty risk.
Both offer Silver, Platinum and Palladium products also.
The price you pay for the Gold is pretty competitive (keep reading below!) at each and can only be purchased during market hours, neither is a 24/7 buy online Gold operation.
Periodically, both of these companies will charge you a storage fee for keeping your Gold for you.
Working with either company you have the option of contacting them and having them ship you your Gold.
In our opinion, both of these companies are solid, reputable and pleasant to work with. You can talk to real people and the Swiss do speak perfect English.
That’s pretty much where the similarity ends…
Hard Assets Alliance versus Global Gold: The Differences
When we opened our accounts at Global Gold, HAA did not exist, so no comparison between HAA and Global Gold was possible.
Opening Your Account (Win for HAA)
Hard Assets Alliance was a piece of cake to get the account opened and funded. Global Gold, because they feel overly threatened by Uncle Sam, were a bit anal about needing to know the source of the funds. In one case, a trust with inherited money, they demanded to know how a relative who died back in the 1970’s earned the money!
We had to provide proof of our physical residence via utility bills for Global Gold as well.
Then, in order to speed up the process, we had to FedEx the signed documents to Switzerland – causing both additional delay and expense.
(Both will open an account in the name of a trust, even irrevocable, though GG required more paperwork.)
Funding Your Account and Balances (Win for HAA)
Would you rather do an expensive international wire (and possibly end up wanting to strangle the teller at the bank) to Global Gold or a simple, free ACH transfer to HAA?
At Hard Assets Alliance you can leave any extra funds on account (at zero interest) to pay for future storage invoices or simply have them send you a check or ACH transfer back the amount you wish to have returned to you.
With Global Gold there is a more convoluted process of submitting an order, getting a quote, then wiring the money + extra, then they wire back any excess. My recollection is they do NOT charge you for the return wire. Since they are on Swiss time zone it’s not terribly convenient and may take a day or two to sort it all out.
Products Available (No Win)
Global Gold offers that you can buy what you want in Switzerland and hire them to SHIP IT to Hong Kong or Singapore but why you would want to incur such an expense I don’t know.
Both Global Gold and Hard Assets Alliance offer Gold, Silver, Platinum and Palladium as stated above. Yes, offerings do also vary by vault, but the selection is across 4 precious metals and not just Gold, so it would be difficult to compare.
Let’s call it a push.
Vaults Available (Win for HAA)
All Gold storage companies we work with use VIAMAT in various cities. Other companies are fast being added to the mix as vaults fill up due to the popularity of owning and storing physical, allocated Gold outside the banking system. Silver storage popularity has also caused these vaults to fill up even faster due to the volume differential per currency unit versus Gold.
So, in our opinion, neither uses “safer” vaults.
Global Gold currently offers Switzerland, Hong Kong and Singapore storage.
Hard Assets Alliance offers New York and Salt Lake City if you are a U.S. citizen not quite comfortable with offshore Gold storage, and also London, Zurich (Switzerland), Melbourne (Australia) and Singapore.
Prices can vary with either firm depending on where you buy. New York, Zurich and London are likely to be the lowest cost on initial purchase.
Gold Purchase Process (Win for HAA)
Hard Assets Alliance has the Smart Metals platform which allows you to buy Gold (or Silver, Platinum and Palladium) online during market hours. Simply choose your vault location (unless you are requesting immediate shipment) and product.
HAA does have a US$5000 minimum transaction size and that currently applies to each product/location. Bit of an inconvenience but just wait until I get to GG.
With Global Gold the purchase is pretty much all wrapped up by the time you fund your account, see above.
Here is the BIGGIE with Global Gold, the MINIMUMS!
With Global Gold your initial Gold purchase must be CHF50,000 (Swiss Francs, currently about US$53,000). But this is not where it ends. You must buy coins in LOTS, typically 10. So if you decide to buy 40 Krugerrands (almost exact at today’s Gold price) for CHF50,000 and the price slips a bit, you can rejoice at the better price but end up having to buy 50 coins for about CHF62,000 instead!
Then subsequent additions to your account are subject to a minimum buy of CHF20,000, with coin lot issues still to come into play.
This makes Global Gold best for heavy hitters, not the average Gold buyer
Broker Fees (Win for HAA)
The prices charged by both of these companies are indeed competitive, Global Gold through their extensive connections and Hard Assets Alliance through their Smart Metals platform.
Global Gold, though, adds what their website refers to as a “competitive broker fee” being added.
Really?
Maybe in the old days, but not in the age of the internet and online Gold buying. No one else we deal with charge any broker fee at all, so we don’t see how any broker fee could be competitive.
This is negotiated ahead of time on the buy or sell, again, heavy hitters will do better, but on MINIMUM purchases like we made the “competitive” broker fee was an outrageous 3%!
In our opinion – biased because of the FEES we paid – this is a KEY ADVANTAGE to using Hard Assets Alliance over Global Gold.
Storage Fees (Win for HAA)
Storage fees are the bane of owning physical Gold and other precious metals unless you take the extreme risk of storing it yourself.
The difference in storage fees between Global Gold and Hard Assets Alliance is more than just the actual amount. Here again, GG’s sliding scale will help larger clients feel less pinch, but for someone with a minimum size account at GG and a comparable account at HAA, HAA’s fees are around 1/3 LESS.
But we keep going.
HAA invoices quarterly, and as mentioned above, you can leave money in your account to cover that. GG invoices annually, in arrears, which is decent of them, but it’s a royal pain plus the additional expense of the currency conversion cost charged by the credit card company all explained here (including a VERY UNTIMELY spike in the value of the Swiss Franc which cost us another 4%!).
With both companies you can operate paperless, simply login to download such things as statements and invoices.
Jurisdiction (Win for GG)
HAA is U.S. based. GG is in Switzerland.
Having a Swiss jurisdiction has always been a key selling point promoted by Global Gold, but the more I see about Switzerland caving on this, that and the other thing, I’m not so sure.
In our opinion, this may well be an advantage, but think only in terms of civil litigation and asset protection, NOT protection from the U.S. Government. As already covered, GG demands more PITA, US Government CYA information from prospective clients wanting to open an account than HAA does.
If someone is after your assets, having your Gold in Switzerland is not going to stop them from getting it but it will most certainly cost them more and thus act as a deterrent.
Reporting Requirements For U.S. Citizens (Win for HAA)
The well known U.S. Treasury TD F 90-22.1 and the newer Form 8938 that must accompany your 1040 on certain foreign accounts meeting minimums is an issue you WILL encounter with an account at Global Gold. GG will NOT give you more than vague guidance when it comes to this; you’re on your own – with the help of a tax advisor, if you can find one who has a clue – to make sure you are compliant.
You have NO SUCH REPORTING REQUIREMENT (see your own tax advisor to confirm, we are NOT CPA’s or Tax Professionals) with Hard Assets Alliance.
Summary: Global Gold vs Hard Assets Alliance
The comparison of Hard Assets Alliance to Global Gold is pretty clear cut, not too much in the gray areas.
Bottom line is that if HAA existed a few years ago we likely would not have accounts with Global Gold. While we like the people at GG and trust them, the fees are just too high, the hoops to open an account (in our cases anyway) were just more hassle than the small benefit we gain from the jurisdictional – and only – advantage of using Global Gold over Hard Assets Alliance.
And with HAA you will get:
- More Gold for your money
- More easily overcome minimum transaction size (by a factor of about 10 to 1)
- No “Lot size” issues to deal with
- No “Broker” fees
- Lower storage fees
- A pass on reporting of foreign accounts – even if you store your metal in the same vault as you would with Global Gold!
To learn more about Global Gold, click here.
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