Why Doesn’t My Financial Advisor Suggest Physical Metals?

financial advice, investment tips, ETF vs bullionQ: If gold and silver are so smart, why hasn’t my advisor recommended them?

A: Financial advisors almost never earn commissions or fees when their clients buy precious metals. They’re in business to earn a living by selling products, so – as you would expect – they generally stick with the products they make money from selling. In addition, most financial advisors have a specific knowledge base that revolves around their own products. They simply lack expertise in precious metals and commodities. Without expertise in those fields, they wouldn’t know what to recommend, even if they had a way to make a fee from suggesting them.

The most common thing to hear from a financial advisor who does recommend gold or silver is the suggestion that a client might want to move 5% to 10% of their assets into gold and silver. The advisor often mistakenly tells their client to buy an ETF, i.e. paper gold and silver, sincerely believing they’re helping the client out with hedging.

Why would a financial advisor, who makes money on managing your funds, want you to buy an ETF instead of physical gold or silver? Because if you buy an ETF, your assets are still under their management, and they are still getting management fees. The name of the game with financial advisors is to have as much of your wealth under their management as possible.

A few financial advisors, the really great ones, will team up with a great dealer. Then, the advisor can recommend the dealer to their clients in order to purchase physical gold and silver. This is true diversification. But just keep in mind that advising you to invest in physical precious metals is not in alignment with an advisor’s financial interest, because they have no way to get paid when you do that.