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Has your financial advisor ever suggested that you purchase physical precious metals as part of a diversification strategy for your savings? In all likelihood, they have not. And, unless you ask them directly about physical gold or silver, they likely never will.
Portfolio diversification is one of the most fundamental strategies for protecting your savings. So then what do most financial advisors have against physical precious metals? The short answer is simple: In almost all cases, they cannot make money from such a transaction. They rarely stand to make any commissions or fees. Instead, your savings would move out of the funds they currently manage for you – perhaps forever.
Another reason your financial advisor likely will not recommend physical precious metals is that they are only licensed and trained to sell paper assets, such as stocks, mutual funds, cash and bonds. There are some “paper” versions of precious metals that they may try to sell you as an alternative – such as a gold ETF or a mining stock – but just as with any paper asset, these are simply promises printed on a piece of paper.
It’s also critical to remember that for the most part, financial advisors don’t understand or follow the precious metals market. They usually don’t know how to sell physical gold and silver and likely can’t advise you on all the options available for your purchase, let alone how various products differ from one another.
Finally, financial advisors generally only subscribe to one point of view on the economy. It’s in their best interest to see the stock market continue to increase, so they generally sell the assets under their management based on this worldview.