Liberty Bullion is proud to assist our clients in diversifying their SMSF holdings with physical precious metals. Below you will find useful information on how to do so with us.

Introduction to Gold and Silver in your SMSF

As the main vehicle for saving and investing for the vast majority of Australians, superannuation is incredibly important with most considering it to be their sole means of support in their retirement.

Given this diversification of superannuation assets is critical, especially given the current economic and financial state of the world.

Balancing your portfolio through diversification of assets that are not correlated to each other is the basis of portfolio theory, with the goal of reducing the overall risk of a portfolio. Shares and property are known to be correlated (they move upwards together and crash together too), whereas gold is known as a “safe haven” asset, meaning that people flock towards it in times of fear, sending the price upwards. It is historically uncorrelated to other asset classes, as is shown in the table showing stock market returns versus gold returns during stock market crashes in our Investor Centre.

By allocating a percentage of your Self-Managed Super Fund (SMSF) into physical precious metals, you are balancing your portfolio (and its risk), whilst reducing counterparty and systemic risk as well.

Unlike property or other hard assets, bullion is divisible, giving you the flexibility to sell exactly how much you want to, when you want to- rather than having to wait for a house to sell, and then settlement to be finalised.

 

Buying bullion for your SMSF

The only difference between purchasing bullion through your SMSF and making a personal purchase is that we require extra documentation. To transact with a SMSF, we require:

• Superannuation Fund name, registered address and contact details (phone, etc);

• Superannuation Fund ABN;

• Superannuation Fund trust deed showing who is eligible to act on its behalf; and

• Personal ID for each director/trustee of the fund.

If it is a corporate trustee, we will also require a copy of your last annual company statement (or company extract from ASIC). We require all of this information before you pick up your metal or we send it to you. You only need to provide this information to us once.

 

Storing bullion for your SMSF

There are a few considerations to be made when storing your SMSF bullion:

• If you have purchased bullion coins, they are deemed to be a “collectable” by the SMSF regulations and need to be insured in the fund’s name, stored independently in a secure facility and audited regularly; and

• Bullion bars are not captured under these regulations, however you should check with your SMSF manager, as some still believe that independent secure storage is required regardless. We are not advisors in this regard and do not offer advice around this.

Many customers use The Melbourne Vault for storing their silver and gold bullion purchased with Liberty Bullion, for a number of different reasons:

• It removes the risk of storing at home robberies, fires, etc.

• It provides “all risks” insurance cover at very competitive prices.

• It is very difficult to obtain insurance for physical bullion located in your home, and banks generally do not offer it.

• Liberty Bullion delivers your purchases with us free of charge to the Melbourne Vault for you.

• The Melbourne Vault, in conjunction with IAS, offers very competitive independent annual audits of your holdings, to satisfy your trustee obligations.

• It is the ultimate in independent ultra secure storage in Melbourne, with top notch biometric security.