As in many areas of life and investing, the fees involved with Precious Metals IRAs can make or break the practicality and value of your investments for retirement. The problem in deciding with which custodian and administrator a person should invest their hard-earned retirement dollars and assets lies in the fact that there are as many as four to five different fees with these forms of IRAs, and the prices that the major players in this custodian industry charge are literally all over the place. As if this were not confusing enough, there are also different types of fees (flat versus scaled) and forms of storage (segregated versus non-segregated), and each of these further leads to a different dollar amount fee too.
What really makes it fun is that every single Precious Metals IRA custodian has a different scheme of charging you to hold your physical account assets. Regal Assets is among the very best reviewed custodians with the most reasonable charges, so they are a good comparison place to start in considering what fees will have to be paid out and at how much they will start. For example, they offer an extremely generous rollover transfer program in which they actually pay new customers’ first year of dues for all retirement accounts. This includes not only setup and annual administration fees, but also annual storage fee and even delivery of metal fees. This give you a breakdown of the types of fees that you can expect to pay with practically every other custodian out there today.
Setup Administration Fees
These are fees for the paperwork processing and handling. They cover the work that is necessary to open your new IRA Precious Metals account. These fees will typically start at the $100 that Regal Assets would charge (if it was not paying the setup fees for its new clients) and go on up. Other custodians are charging anywhere from $75 to $250 for this startup fee. You can consider them to be junk fees if you want, but they are nearly impossible to avoid or get out of, unless you go with a company like Regal Assets that covers this cost for you at their own expense.
Annual Management Fees
Annual management and administration fees are yet another category of costs that you can expect to pay when you open up this type of IRA, regardless of with which custodian company you go. Many custodians see an opportunity here to bang you harder if your account value is higher, and so charge a sliding scale fee based on the dollar denominated value of the assets that you have under management in this Precious Metals IRA. Going back to our Regal Assets example, they instead charge a once per year flat rate fee of $100. They do note that the majority of their competitors in the industry work the scaling administration or management fee schedule that costs clients like you more money as the value of the account gets larger. This is all to the advantage of the custodian firm, naturally.
Annual Storage Fees
Regal Assets states that the majority of their competitors charge from $225 and up for annual storage fees. This is their price for so-called segregated storage that most of them charge you more for then typically do not even provide. Once again, this is an area where they are able to charge you a sliding scale of higher commissions if you are fortunate enough to boast a larger Precious Metals IRA account in the first place. Regal separates itself from the pack by leveling a once per year flat rate segregated storage fee of $150.00 for real Brinks Company segregated storage. Many of the competing custodians charge a higher amount than this for co-mingled or allocated storage.
What is the big deal about segregated versus comingled assets in any case, and why should you be expected to pay more for segregated accounts? Segregated storage means that in the giant vault in which the custodian stores all of their customers’ various precious metals and tangible assets, there are individual lock boxes, safe deposit boxes, or miniature vaults where they store each client’s own unique precious metals assets. Co-mingled storage actually has one large vault where they simply throw in all of their various clients’ valuable precious metals possessions into one single secured facility. Without a doubt, the margin of error for your particular precious metals to be misappropriated or even outright lost somehow is higher in this co-mingled scenario than it would be in a segregated individual safe deposit box.
The Difference Between Flat versus Scaled Fees
• Flat Fees – This is the ideal scenario that you want your Precious Metals to be charged under. In a flat fee situation, you know in advance what your charges will be for setup, annual maintenance, and annual storage. You also know that it will not be higher than the next guy’s account just because you have $50,000 worth of precious metals holdings to his $10,000 worth.
• Scaled Fees – Many, if not most, of the custodian companies have long ago sat down and figured out that this is the fee schedule which is most in their best interest. With a scaled fee, they can simply charge a flat percentage of the value of the assets in the account or under management. A person with a larger account value will then pay a considerably higher set of annual maintenance and storage fees this way than will an individual with a more modest account asset value.
Shipping and Insurance Fees
You should not assume that your precious metals you purchase will come free of shipping/handling and insurance charges to your third party vaulting situation. Quite the contrary, with all orders of precious metals, regardless of how small or large they may prove to be, there will either be a scaling or flat rate fee (once again) for both shipping and insurance. The necessity of insurance can not be argued with valuable commodities such as gold, silver, platinum, and palladium, which must be guaranteed from the moment they leave the vault to the moment they arrive at your home or rollover vault location for up to their total replacement cost value.
With Regal Assets, they include all of their shipping and insurance charges in the price of the metals which you buy, so that there are no nasty last minute “gotcha” surprises. In the case of this company and the hand full of others which are like them, the price that your account representative quotes to you for obtaining precious metals is the total price which will not have any additional charges added stealthily on to it. This is certainly not the case for every custodian in the industry though, as many of them will charge a fee and will increase it as the size and weight of the metals in question rises.
Final Words on Precious Metals IRA Fees and Charges
These fees can be incredibly onerous and debilitating if you are not careful which company that you select to be your ultimate custodian in a Precious Metals IRA situation. Most of the custodian firms typically charge more than $500 for initial administration setup, first year annual maintenance, first year annual storage, and shipping and insurance charges. In Regal’s exemplary case, they have this cost covered for you as a new client. Every year after that, they will charge you a $250 flat cost per retirement account regardless of how high the value of the account or quantity of precious metals contained therein may actually be. They break this down as $100 flat for annual administration and maintenance charges and $150 flat for segregated storage of all precious metals. It is a recommended idea to research and do your homework on the amounts and types of these fees before you commit to a custodian with whom you may be sorry later once you start paying the piper.