Scott R. Hillford
Author & Founder Gold Is Money 2
Disclaimer: Some or all of the companies reported here may provide compensation to us, at no cost to our readers. This is how we keep our reporting free for readers. Compensation and detailed analysis are what determines how companies appear on this website.
Five decades ago, First Commander changed its name to Charles Schwab & Company. Charles Schwab himself is a spry 85 years old and is still active in politics.
Prior reading further, it is important to acknowledge that investing your savings is a not easy. When it comes to incorporating precious metals into your investment portfolio, how can you tell which companies are reliable?
After devoting extensive time and effort, we have conducted thorough research within the precious metals industry and compiled a selection of the most trustworthy companies.
Take a moment to read our list and determine if Charles Schwab has what it takes to make the list this year!
This lets you to quickly compare the leading companies in this field and select the one that aligns with your specific requirements and investment objectives.
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About Charles Schwab
The company is the largest investment brokerage in the country and has nearly $8 trillion in client assets. It offers almost any investment product and strategy under the sun.
But, it does not offer access to physical precious metals or accounts in which to store them. Read that again. Anything Charles Schwab does with precious metals is limited to futures and exchange-traded funds.
Unlike mutual funds, which only trade once per day, ETFs are traded all throughout the day in the same manner as stocks. That creates big fluctuations in price per share, which is usually the opposite of what you want when you invest in precious metals.
One advantage of ETFs, though, is that they usually have much lower fees than accounts with an active manager. There are also fewer rules about trading, so you won't be as constrained as you would be with other kinds of accounts.
Gold ETFs also have a few advantages over owning physical metals. First, you don't have to pay storage fees to own them, and gold ETFs still give you some diversification. Also, if you have an emergency, because these are liquid funds, you can cash them in at any time without a huge charge or penalty.
There are a few disadvantages, too, but most of them are minor with one exception: counterparty risk. This is a huge problem because it's common for other parties not to "keep their end of the deal." The risk of "losing your shirt" is real as opposed to owning physical metals, which are tangible assets.
One of the smaller disadvantages is that the gold in ETFs is less valuable than the real thing, and there are additional fees about which you have to worry. Some ETFs are leveraged against future returns by using borrowed money.
The rewards can be staggering, but so can the losses. Think of it as margin trading with multiple stocks at once. Although leveraged ETFs are set up so as not to lose more than your original investment, such speculation is the same thing that caused the Great Depression in 1929.
Without the stability of the actual metals, these kinds of accounts are really only for veteran traders with hearts of steel.
Unlike gold ETFs, gold futures don't incur fees. Gold futures are also more structured than ETFs because they involve a contract between the buyer and the seller. In short, the buyer says, "I'll buy this-and-such amount of gold at that-and-such price on this-and-such date."
Gold ETFs also focus their tax liability on the long term whereas gold futures split the liability between the short term and the long term. Because of their structure, gold futures are a better hedge against inflation than gold ETFs, but both are not nearly as strong a position as owning the actual metals.
The Self-Directed IRA
The most popular method of owning the precious metals themselves is in a self-directed IRA. It's an account that is made up only of precious metals that you buy new and invest for the long term. Indeed, you're not allowed to make withdrawals without penalty before turning 59.5 years old.
These accounts must be administered by a custodian who is tasked with all operations regarding the account. The term "self-directed" means that you're allowed to tell the custodian what to do even if you aren't allowed to do the trades yourself.
The concept of buying new metals is inviolate. You're not allowed to store precious metals that you already own. That includes even something you "bought yesterday and waited to put into the account".
That's one reason that the custodian has to do things for you. That way, there's no chance of the metals being disqualified from the account.
Another rule about the precious metals that you put into this kind of IRA involves the storage of the metals. You're not allowed to have physical possession of your gold from the IRA. It must be stored in a secure third-party depository.
Taking possession of the gold counts as a withdrawal in the eyes of the Internal Revenue Service even if you don't intend to remove it from the account. As stated, such withdrawals before you turn 59.5 years old come with taxes and other penalties.
There are also limits on how much gold you put into the account at any one time. These vary based on specific situations, so to find out what they are, it's usually best to ask either an attorney or the company from which you wish to buy the gold and/or set up the self-directed IRA.
As with the rules concerning regular IRAs, you have to begin making minimum withdrawals from your self-directed IRA as soon as you turn 72 years of age. Those withdrawal requirements also vary based on your particular situation, so it's generally a good idea to ask which requirements apply to you before you turn 72.
Because Charles Schwab doesn't actually offer a self-directed IRA or the ability to buy precious metals for home storage outside a self-directed IRA, it would be absurd to recommend them for such.
Additionally, in June 2022, the United States Securities and Exchange Commission ruled that Charles Schwab hid fees associated with its robo-advisors and deliberately misled its investors. The SEC ordered the company to pay $187 million in damages. For this reason, this reviewer cannot recommend the company at all.
Top 3 Alternatives to Charles Schwab & Company for Self-Directed IRAs
1. Goldco - Most Trusted
Goldco is the proverbial "one-stop shop." Not only can you buy the precious metals from Goldco, but the company will also act as the custodian for you and provide access to secure depositories, such as the Delaware Depository, necessary for storing your precious metals.
In certain cases, Goldco itself will store your gold, but it will only do so if it's not in a self-directed IRA. You'll have to contact Goldco to find out if you're eligible to use this service. In addition, the company also allows you to speculate with precious metals ETFs and futures as well as giving you access to the precious metals themselves.
The company also focuses heavily on customer service and consistently ranks higher than its competitors in online reviews written by both its clients and industry groups.
Although there are 31 complaints filed with the Better Business Bureau about the company over the last three years, Goldco has responded to nearly all of them, achieving customer satisfaction most of the time. Even in cases where the company wasn't able to resolve the issues, it certainly made a good-faith effort to do so.
Goldco provides not only bullion itself but also bullion coins of various weights and materials. These coins meet the purity standards of self-directed IRAs in the same way as bullion. The coins commemorate different events, places, and people from U.S. history and around the world.
Some international coins conform to the purity standards while some don't. Canadian Maple Leaf coins and Australian Kangaroo coins count while South African Krugerrands don't.
2. Augusta Precious Metals
Augusta Precious Metals has been in business for 11 years and has held Better Business Bureau accreditation since 2015. On the BBB website, the company has no complaints filed within the last three years.
There are 121 client reviews, and the total rating of Augusta Precious Metals is 4.95 out of 5.
Unlike other companies that have years-old reviews and nothing of late, Augusta Precious Metals has reviews as up-to-date as just a week ago. The general tenor of the reviews is that the company is helpful and provides as hassle-free service as possible.
The company also focuses on education. Part of its mission statement is that it wants to create savvy investors who know the score and who won't be easily duped. The company quite rightly figures that an educated consumer will choose a company with transparency, simplicity, and honesty as its watchwords.
Augusta Precious Metals, like Goldco, strives to be a one-stop shop for its clients. It'll help you set up a gold IRA, roll over a 401K or other investments into a self-directed IRA, and other services related to owning gold. The company partners with reputable depositories for the storage of your precious metals when it comes to self-directed IRAs.
At first glance, the company's website is merely a collection of videos, many of them testimonials. The educational information isn't readily apparent. Instead, there's an unobtrusive "hamburger" at the top left that you click to see the text information to read at your leisure.
In reading the text, you'll find that Augusta Precious Metals does not deal in either platinum or palladium. They have several options available regarding gold and silver, however.
One point that is greatly in the company's favor is that it pulls no punches regarding its terms and conditions, which contain the phrase, "Don't purchase Augusta products with money you can't afford to lose."
That's possibly the best investment advice ever. And, it's not hidden away on some webpage that you have to be a technological contortionist to find. The company also gives you access to a team of folks who will be available as long as you have an account with Augusta Precious Metals.
Although the company rightly states that these folks can't give legal, tax, or investment advice, they're there to help you with anything else related to your account. Like Goldco, Augusta Precious Metals puts a premium on customer service.
The one bad disadvantage to investing with Augusta Precious Metals is the high minimum balance of $50,000, which is double that of other companies.
3. American Hartford Gold
American Hartford Gold is also focused on customer service. The company even holds monthly conference calls with its clients to discuss trends in the precious metals market and other important insights.
This enables you to be informed enough to make well-reasoned decisions regarding your financial future.
The company also provides full transparency regarding its fees and other associated costs, such as markups, and has no hidden stuff. American Hartford Gold even provides a contract that stipulates how much you will receive if you choose to sell your precious metals back to the company.
Although this will sometimes net you less than your precious metals are worth, the protection against "taking a bath" is worth it. The company also acts as a custodian for you if you choose to set up a self-directed IRA.
As a bonus, American Hartford Gold waives account fees if you pick them to be your custodian. The downside is that the company's annual fees are higher than those of its competitors. On the other hand, the $10,000 minimum is only 20% that of Augusta Precious Metals and roughly half that of Goldco.
That alone is a big advantage for folks who might have had a tough time of it for the last three years. A perusal of the company's website shows that it deals in silver and gold but not palladium nor platinum.
Interestingly, although the website doesn't show anything about the company offering platinum, it does have a webpage dedicated to tracking the price of platinum. The inference is that if you own platinum, you can roll it over into a self-directed IRA with American Hartford Gold, selling the platinum and buying gold or silver in the process.
American Hartford Gold also offers a decent variety of products that include both domestic and international bullion coins that meet the purity standards of the IRS when it comes to self-directed IRAs.
The Final Word
Any of these three companies is a far better choice than Charles Schwab when it comes to precious metals. They all provide services that you'll need to buy precious metals for home delivery or as part of a self-directed IRA. All three also focus heavily on both customer service and complaint resolution.
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