U.S. regulators have issued a warning to investors about the added risks of dealing in physical precious metals.
A new investor alert published Thursday by the Financial Industry Regulatory Authority (FINRA) warns that recent enforcement actions by the U.S. Commodity Futures Trading Commission (CFTC) and court decisions in this area, too, “paint an ugly picture of sellers who charge high commissions and fees but ultimately fail to purchase or deliver the physical assets as promised.”
The alert address the risks involved with investing in physical precious metals, such as silver, gold, palladium or platinum. It says that, while precious metals can play a helpful role in building a diversified portfolio, “some investments are more fraught with risk than others.”
When it comes to dealing in these metals, FINRA advises investors to protect themselves by carrying out background checks of prospective sellers with derivatives regulators; to ensure they get full disclosure of the fees involved; and to beware of using leverage in these investments; among other measures to protect themselves.
The alert also discusses some of the investment options beyond physical metals, such as mutual funds and exchange-traded funds (ETFs) that invest in precious metals companies or physical metals; and, factors to consider when buying these sorts of securities.U.S. regulators have issued a warning to investors about the added risks of dealing in physical precious metals.
A new investor alert published Thursday by the Financial Industry Regulatory Authority (FINRA) warns that recent enforcement actions by the U.S. Commodity Futures Trading Commission (CFTC) and court decisions in this area, too, “paint an ugly picture of sellers who charge high commissions and fees but ultimately fail to purchase or deliver the physical assets as promised.”
The alert address the risks involved with investing in physical precious metals, such as silver, gold, palladium or platinum. It says that, while precious metals can play a helpful role in building a diversified portfolio, “some investments are more fraught with risk than others.”
When it comes to dealing in these metals, FINRA advises investors to protect themselves by carrying out background checks of prospective sellers with derivatives regulators; to ensure they get full disclosure of the fees involved; and to beware of using leverage in these investments; among other measures to protect themselves.
The alert also discusses some of the investment options beyond physical metals, such as mutual funds and exchange-traded funds (ETFs) that invest in precious metals companies or physical metals; and, factors to consider when buying these sorts of securities.