BullionVault Review

October 26, 2011 at 10:50

truthing

The Executive Team

Paul Tustain

Paul Tustain

Paul Tustain: Director

Alex Edwards: Chief Operations Officer

Kris Jenkins: Chief Technical Officer

Adrian Ash: Head of Research

Catherine Little: Cash Manager

Nittin Seehakoo: European Operations Executive (French)

Robert Nigg: European Operations Executive (German & French)

Jaroslaw Pietrzak: European Operations Executive (Polish & French)

Atsuko Whitehouse: Far East Operations Executive (Japanese)

Simin Gurler: European Operations Executive (German)

 

BullionVault is owned by Galmarley Limited, which is company number 4943684 registered in Great Britain. As at October 2008 the company had 47 shareholders.  For a modest fee you can obtain a full and formal shareholder list, updated annually, from Companies House on http://www.companieshouse.gov.uk. Our services are delivered to you by our own computer machinery hosted in separate locations in Britain and USA, which we connect to and manage from our London offices. Galmarley is involved exclusively in bullion and bullion-related information technology. It owns not only www.BullionVault.com but also www.galmarley.com
Main Features
  • General
    • Buy, Sell and store Gold and Silver using Allocated Account & LBMA Accredited Storage. [Clause 8 of Terms & Conditions] Scroll down to the last item on the left side column.
    • Supports 6 major currencies (USD, CAD, EUR, GBP, CHF & JPY).
    • Excellent online realtime trading platform for active traders of physical bullion (similar to stock broker platform).
  • Vaulting
    • Transportation and physical custody is operated by VIA MAT International on behalf of BullionVault.
    • Choice of 3 vaults – London, Zurich and New York.
  • Bar Registration
    • Bar reservation is very easy, with online facility to select your bars from a Bar List showing serial numbers, refiners and bar weights.
    • Bar registration available for both gold and silver.
  • Taking Physical Delivery
    • Unlike GoldMoney, taking physical delivery is discouraged, and is also more costly.
    • This is what they say in “Your Right of Withdrawal” clause.

You have a right of withdrawal of your gold and silver from BullionVault, but you acknowledge BullionVault is not designed primarily as a service for those who wish to take physical possession of bullion.

Your wish to withdraw gold will be accommodated only in the form of whole numbers of appropriate gold bars of varying sizes and of generally accepted gold bullion coins to be selected at BullionVault’s discretion.

Your wish to withdraw silver will be accommodated only in the form of whole numbers of 1,000 troy oz bars.

  • Fees

    • Gold
      • Buy commission ranges from 0.8% to 0.02% depending on volume traded in one year.
      • Sell commission ranges from 0.8% to 0.02% depending on volume traded in one year.
      • Annual Storage & Insurance ranges from 0.96% to 0.12% depending on quantity, charged monthly in USD, with minimum of $4 per month. Fees are the same in all vaults with rates calculated based on cumulative holdings in all vaults.
      • Bar registration for 400 oz bar is 0.1%, with cost of storage rising from 0.12% to 0.18% per annum.
      • All fees are in USD or equivalent, and not in grams or ounces of metals.
    • Silver
      • Buy commission ranges from 0.8% to 0.02% depending on volume traded in one year.
      • Sell commission ranges from 0.8% to 0.02% depending on volume traded in one year.
      • Annual Storage & Insurance ranges from 1.92% to 0.48% depending on quantity, charged monthly in USD, with minimum of $8 per month. Fees are the same in all vaults with rates calculated based on cumulative holdings in all vaults.
      • Bar registration for 1,000 oz bar is 0.1%, with cost of storage rising from 0.48% to 0.72% per annum.
      • All fees are in USD or equivalent, and not in grams or ounces of metals.
  • Buy and Sell mechanism
    • The unique feature of BullionVault is the ability to trade bullion as you do stocks in a stock broker’s online account. Realtime bid and ask prices are displayed for immediate buy or sell at market prices, or you can place a limit order to be executed when your price targets are met.
    • When buying, other BullionVault clients compete with BullionVault in offering you the lowest price, and vice versa when selling. Either way, BullionVault adds their trading commission on top of the transacted price.
    • After each transaction, you will be advised if BullionVault was the principal or dealer for that transaction.
    • Transactions are in realtime, and you see your bullion and cash balances updated immediately.
    • Trading is available 24×7, 7 days a week, even when external markets are closed.
  • Account Opening, Client Identity Verification and Account Funding
    • Open a free account online in realtime. Once new account has been created, you’ll be credited with a free gram of gold, 1 USD, 1 EUR and 1 GBP.  You can begin trading immediately to test out the system.
    • No mention of restrictions on client’s’ country of residence on their website.
    • Client identity verification can be done online by uploading scanned copies of photo ID and bank statement of your funding bank (the bank account from which you will remit funds to your BullionVault account). No hard copies are required.
    • Able to fund your account and start trading even before account verification is completed. However, you cannot withdraw funds from your BullionVault account until the account verification is completed.
  • Account Management
    • Remitting funds into your BullionVault account can be done only from one bank account (funding account).
    • Not necessary to apply or notify BullionVault when funding, so long as the funds originate from the same funding account.
    • Withdrawal of funds from BullionVault can only be made to the same funding account and nowhere else (unless special application is made to change the funding account).
  • Security & Safety features
    • Optional SMS alarm notifications (not verification) for critical transactions (login, fund transfers, buy/sell) are charged at $0.20 per SMS. Email alerts are free.
    • The linking of your BullionVault account to one and only one external funding account is considered “failsafe” by BullionVault.

Corporate Profile and Corporate Governance

  • Development of BullionVault software/service began in 2003. First recorded online presence was in 2004 and the first full year of trading was in 2006. Started online trading and storage services as we know it today in 2004.
  • BullionVault is owned by Galmarley Limited, which is based in West London (UK).
  • BullionVault’s shareholders list and 2009 audited company accounts are available online.
  • Current reports are available at Companies House for a fee.
  • In June 2010, The Telegraph reported that Lord Rothschild Fund and World Gold Council invested £12.5m in BullionVault. Depending on how you view the Rothschild Fund & WGC, their involvement may influence your opinion of BullionVault.
  • Daily client bullion and currency audit is carried out by BullionVault and the results published online in the public domain (no login required). Audit shows BullionVault’s total holdings of various currencies, gold and silver bullion in the various vaults together with a complete bar list. You can basically view your account (including list of your registered bars) online without login, but your privacy is assured as all accounts and registered bars  are identified through an anonymous code (Nickname) chosen by and known only to you. (see screenshot below).
  • Annual external audit is conducted by Albert Goodman and audit reports to BullionVault are published on the auditor’s website (instead of BullionVault’s website).
  • As discussed in the Counterparty Risks section, holding bullion through BullionVault’s Allocated Accounts gives you outright title to your metals. As noted, there is a minor Performance Risk with all service providers. BullionVault shows its commitment to minimise this risk through their “Accepting Responsibility” principle:-

As the head of the board and majority shareholder Paul Tustain accepts responsibility within the company for organising BullionVault’s system controls and arranging individual responsibilities within the BullionVault team, and its custody providers, so as to maximise the security of customers’ gold and cash.

In addition to development capital Paul Tustain has provided management bonds to the company which is held as gold and cash segregated in favour of customers. These management bonds are non-refundable except in final liquidation, in which circumstance they rank behind all other customer property for repayment. The value of equity in the company and this loan would therefore be lost before any BullionVault customer incurred any loss resulting from breaches of faith or security on BullionVault.com.

This arrangement is structured to underpin the meaning of ‘accepting responsibility’.

  • Communications & Client Relations
    • No secure online messaging system within their website for correspondence between BullionVault and clients.
    • Communications through normal emails.
    • Not responsive to suggestions or questions regarding website features. I’ve 3 emails totally ignored. Yes, totally no replies.

Summary & Opinion

  • Safe, Secure, Reliable. You are the outright owner of professional grade bullion (Good Delivery Bars).
  • Excellent trading platform with low trading commissions, low spreads and low storage fees.
  • Ideal for active traders of physical bullion or if you wish to occasionally swap gold for silver or vice versa depending on the Gold/Silver Ratio.
  • High transparency and good corporate governance but poor client relations.

 

Screenshot: Trading platform

 

BullionVault Trading Screen

The above is a typical screenshot showing Market Depth for gold traded and stored in Zurich. You can see buy and sell offers (at price intervals as low as $1) on queue together with the spread. What I like about BV is their low commission plus very low spread (seen here at 0.28%).  When you buy, the sell offers can come from other BV clients or from BV themselves (through their trading robots – more details here). So in a way, they are competing to give you the lowest price. The same holds true when you sell. You are also able to see Market Spread at all their vaults in a single screen as shown below.

BullionVault Market Spread

Tip: You often get better deals by breaking up your order into multiple small orders.

Screenshot: Daily Audit (partial view)

BullionVault Daily Audit

BullionVault Daily Audit posted online in public domain

You can easily open an account and start playing around with their trading platform with a free gram of gold.

Disclaimer: The above information is provided on a best-effort basis. It’s accuracy is not guaranteed, and may not reflect the most recent changes made by the service providers. Please perform your own due diligence and verify the information from their respective websites before making any decisions. The reviews are the personal opinion of the author and does not constitute any endorsement or recommendation.