gold bar on stack of cash

Choosing the right gold IRA company can be as important to protecting your wealth as the types of assets you keep in your portfolio. Whether exposing you to taxes and penalties by not following IRS rules or simply not acting in your best interest, entrusting your retirement account to some firms can be just as risky as investing in only stocks and bonds.[1]

The first step to securing your financial future with a precious metals IRA is selecting a knowledgeable, honest gold IRA company. How? While researching and evaluating gold brokers, watch out for these warning signs. They can be good indicators of poor or even outright shady business practices.

Step 1: Research Gold IRA Companies

researching gold ira companies

“If you are interested in buying gold, do some digging before investing,” recommends the Federal Trade Commission, the country’s leading consumer protection agency.

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Search online and see what people are saying about the company. There are plenty of customer review websites these days: Google Reviews, the Better Business Bureau, and Yelp.

Warning Signs

  Unlicensed Companies

Is the company licensed? These days, just about anyone can create a website, but that doesn’t guarantee they’ve taken the required steps to operate a business.

  Poorly Rated Companies

Does the company have a “B” or lower rating from the Better Business Bureau? The BBB has been grading businesses for more than 100 years based on 16 different factors, including competence, time in business, and complaints. Look for companies with an “A” or “A+.”[2]

  Negative Customer Reviews

What are people saying about the company? All bad customer reviews are usually not a good sign—but neither is 100 percent positive reviews (5 stars). This could be an indicator a company has manipulated its reviews.

Pleasing everyone all the time is impossible, so most companies will have at least a few negative reviews. It’s how the business responds to them that’s important. Giving dissatisfied customers their attention and, if possible, a solution is a good business practice.[3]

  Paid Reviews

Does the “review” website primarily highlight one gold IRA company? Or, are there FTC disclosures indicating that the website might be receiving compensation? These are red flags that the site is most likely participating in an affiliate marketing program.

When you Google “gold IRA companies,” many of the search results are affiliate websites. These websites may offer biased reviews or aggregations of consumer ratings for gold IRA companies. That’s because the companies are likely paying these websites to highlight and link to them.

How to spot on a webpage:

Look in the sidebar of the webpage, at the bottom (especially on a mobile device) of the page or for any hyperlink that mentions “disclaimer”.

Step 2: Talking to the Gold IRA Company

man calling business

You’ve read what other people think of the company, now it’s time to see what its representatives have to say on its behalf. Discussing the firm’s offerings with a representative can give you a good idea of how customers are treated and how transparent the company is about its policies.

Warning Signs

  Bad Customer Service

Were you ignored? Not listened to? Unfairly treated? Rushed? These are all classic signs of bad customer service and that the company’s reps don’t value your businesses.[4]

  No Transparency

Is the representative withholding information or avoiding answering your questions?

  • Are they refusing to discuss the company’s buyback policy (if they would purchase coins you recently bought from them and how much they would pay)?
  • What about disclosing whether or not the company provides detailed receipts proving the price precious metals were sold for and the date and time of the sale?

You’ve called this firm for more information about a major financial decision in your life. If they won’t give you the information you need, it’s time to move on to the next company.

  Inattentiveness

Would the gold IRA company give you and your retirement account due attention? Look for firms that assign an advisor to your account and offer a dedicated line of communication for you to receive expert advice.[5]

  Aggressiveness

Sales reps who talk fast and expect you to act even quicker are a red flag. Don’t be pushed into rolling over your IRA into gold by high pressure sales techniques. Stay away! A gold broker who values your goals will educate you through the process and be there when you’re ready to invest.[6]

Step 3: Setting Up Your Precious Metals IRA Plan

signing paperwork

Once you’ve committed to a gold IRA company, the next step is setting up your precious metals IRA. Whether you’re opening a new self-directed IRA or rolling over a traditional IRA into gold and silver, the company should have a clear process and make it as pain-free as possible. Learn more in “How a Precious Metals IRA Works.”

Warning Signs

  Hidden or Misleading Fees

Is the firm up front about how much it will cost to maintain your precious metals IRA account? For example, were you given a straightforward fee schedule to ensure you’re certain of the costs? Sometimes costs aren’t hidden but should be thoroughly considered before signing up. Watch out for companies offering a scaled account fee instead of a flat rate. With a scaled fee, the cost of handling your account will rise as your savings increases.[7] Learn more about fees. Read Gold IRA Pros and Cons

  Companies Offering Home Storage

Does the firm promise that you can store your gold and silver in a home safe or bank safety deposit box? This local storage option is permitted, but the law governing how it is set up and managed is tricky.

A “wrinkle in the tax code” allows you to store your gold and silver nearby by creating a limited liability company (LLC), which is then placed into a self-directed precious metals IRA. Customers buy gold through the LLC and chose where it’s stored. The IRS indicates that customers risk making prohibited transactions with this method and could be forced to pay income tax on the whole balance of their IRA and, if they’re under 59½ years old, a tax penalty.

So, while the home (local) storage option is legal, it’s important to make sure the gold IRA company you choose understands the rules for this process.

Step 4: Buying Gold and Silver for Your Precious Metals IRA

1.5 Ounce Silver Polar Bear Coin

After you’ve set up your precious metals IRA, it’s time to buy gold and silver for it. This step is especially risky. Over the thousands of years that gold has been exchanged as a currency, commodity, and valuable asset, people have devised numerous ways to cheat customers.

Warning Signs

  Damaged Coins

Is the gold IRA company making false claims about the quality of its products? Gold and silver coins and bars can become damaged when they change hands. Dings and scratches can decrease the weight, and therefore value, of bullion. Dishonest precious metals dealers purchase damaged coins and bars and mark them at mint condition prices.[8]

  Overpriced Bullion Coins

Does the firm push one specific type of precious metal product over others? Specifically, watch out for companies selling exclusive Canadian bullion coins. Many gold IRA firms—even some of the well-known ones—have been marketing Canadian gold and silver coins featuring polar bears, foxes, and other animals and claiming exclusive rights to them.

Masquerading bullion coins for numismatic coins, these brokers charge a high premium and then refuse to buy back the products when customers discover they’re only worth their weight in gold or silver. While the coins oftentimes are IRA eligible, customers are overpaying for them. See a list of examples in “Buyer Beware: The Shocking Truth about Exclusive Canadian Bullion Coins.”

  Ineligible Coins

Can the gold IRA company confirm its precious metals products meet IRS requirements? The IRS permits only certain types of bullion to be held in a precious metals IRA. The agency also prefers rounds over bars. Learn more in “Eligible Precious Metals for IRA Investing.”

Making an informed decision and avoiding these pitfalls is crucial to ensuring your IRA is properly allocated. Working with an experienced precious metals advisor can help you avoid overpaying for products marketed as “exclusive” that have no buyback policy disclosed in writing. A reputable advisor can help you determine the best products for your gold IRA based on your specific investing needs.

Gold Buying Tips

It’s important to understand your options before making a decision about your financial future. Follow these tips when buying gold or silver.

  • Worried a dealer’s products are overpriced? Get an independent appraisal.
  • When purchasing coins, request the melt value. This is the value of the metal in the coin if you melted in down and sold it.
  • If your gold and silver coins are delivered straight to the secure facility, how do you know you’re getting what you paid for? Take measures to confirm the metals exist, are as described, and are insured.[9]

Read “How to Avoid Getting Ripped-Off When Buying Gold & Silver Bullion Coins.”

Secure Your Financial Future

Diversifying your portfolio with precious metals can help protect it from the damaging effects of market volatility and recession—but not if a dishonest gold IRA company is managing it. Use the warning signs outlined above to help guide you in the process of selecting a firm you can trust your financial future with.

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