Custody, in operational terms.
Where the metal sits, in whose name, under what agreement, and what the client actually receives in writing. This page is the diligence-grade reference an attorney, CPA, trustee, or family-office staffer reads before recommending an engagement — the operational answer to the questions a private-bank counterparty would expect to be asked.
Companion read: Office Note 06 — What “allocated and segregated” actually means covers the structural argument and the historical precedent (LBMA usage, Re Lehman Brothers International (Europe), MF Global). This page covers the operational delivery.
Two specific contractual claims, with two specific operational meanings.
Allocated means the depository identifies specific bars or lots on its records as belonging to the client — by serial number for individually numbered product (Good Delivery and kilo bars) and by product, weight, fineness, and lot reference for retail-grade bars and sovereign coinage. The metal is not part of the depository’s balance sheet and does not enter the depository’s estate in the event of insolvency. It is the client’s metal.
Segregated means the metal is physically separated from other clients’ holdings — held in the client’s own compartment, bin, or vault rather than commingled in shared storage space with other clients’ allocated metal of the same type. Allocated alone is a recordkeeping protection; allocated and segregated together is the physical-handling protection that survives stress on the depository’s operational systems.
Every engagement at the Office is built on allocated and segregated custody, without exception, unless a client’s specific situation requires a documented deviation — in which case the deviation is named in the brief, justified in writing, and reviewed by the client’s counsel before any acquisition is executed.
The Office does not use unallocated accounts. The Office does not use pooled-allocation structures where a client holds a fractional interest in a shared inventory. The Office does not use net-asset-value claims against a depository’s general inventory. These structures exist in the institutional precious-metals market and serve real purposes for cleared institutional flows; they are not the structure of a private reserve and are not what the Office delivers.
Three institutional US facilities. Selected with the reasoning on the page.
The Office’s custody panel is three institutional US facilities: the Utah-based Precious Metals Vault, IDS (International Depository Services, despite the name a US-domestic operation), and Brinks. All three are classed institutional facilities operating under all-risk coverage, typically Lloyd’s-underwritten. The Office does not currently use offshore custody and does not currently operate an LBMA-approved depository.
The Office’s default starting custody architecture is single- facility allocated and segregated storage at the Utah-based Precious Metals Vault. Multi-depository structures — two or three facilities for counterparty diversification — are introduced at the Private and Family Reserve tiers when the engagement specifically calls for it. Selection is made with client input in the consultation that follows the brief; the tradeoffs are documented before any acquisition is executed.
- Utah-based Precious Metals Vault
Default custody for most engagements.
Classed, US-domestic vaulting with all metals fully insured under all-risk coverage. The practical advantage at this facility is execution speed: because the metal is held at the facility, sells settle without inter-facility movement — the operational path from sell decision to client cash is shorter than it is for inter-depository transfers. The negotiated wholesale storage rate is passed through to the client without markup.
- IDS · International Depository Services
US-domestic operations, institutional-tier counterparty.
Despite the name, the operations the Office uses are US-domestic. Fully allocated and segregated; all metals fully insured under all-risk coverage. The negotiated wholesale rate is passed through to the client without markup. Selected when client preference, multi-facility diversification, or specific operational characteristics warrant.
- Brinks
On request.
Available on client request. Fully allocated and segregated; all metals fully insured under all-risk coverage underwritten at Lloyd’s of London. Some clients have a pre-existing Brinks relationship through a family office or a separate engagement and prefer to consolidate.
Each facility’s specific storage-fee schedule, vault location, withdrawal terms, and operational cadence is named in the brief. Round-trip spread bands and the vaulting rate are visible on /pricing before any commitment.
Every artifact a client receives, named in writing.
The documentation chain is the operational record of what the client owns, where it sits, in whose name, and under what agreement. It is assembled by the Office during implementation and delivered to the client as a single file the client retains. The list below is the standard composition; specific engagements may add documents (entity formation records, trust schedules, IRA custodian acknowledgments) where the titling structure requires.
- §01Invoices and trade records
Acquisition invoices for each line item, with refiner attribution (Argor-Heraeus, MKS PAMP, Valcambi for bars; named sovereign mints for coinage), product specification, weight, fineness, and the executed price against the then-current London fix.
- §02Depository holdings statement
The depository’s own statement, in the client or entity name, listing each holding by bar serial number (for Good Delivery and kilo bars) or by product, weight, fineness, and lot reference (for retail-grade bars and sovereign coinage). Re-issued on a defined cadence (typically quarterly) and on event-trigger (acquisition, partial sale, transfer, audit).
- §03Depository storage agreement
The signed agreement between the client (or the client’s entity or trust) and the depository, naming the parties, the holdings, the storage location, the withdrawal and transfer terms, the access rights, and the audit-right framework. This is the operative artifact in any stress scenario; it is reviewed by the client’s counsel before signature.
- §04Insurance summary
A summary of the depository’s all-risk coverage, the underwriter (typically Lloyd’s of London), the coverage scope, and the per-occurrence and aggregate limits as they apply to the client’s holdings. The Office reviews the carrier and broker structure as part of facility selection.
- §05Titling instrument
For non-individual ownership, the titling artifact establishing the entity, trust, or IRA-custodian relationship under which the metal is held. The Office coordinates with the client’s attorney and tax adviser; the Office does not draft titling instruments. See the dedicated titling treatment at /titling for sophisticated structures.
- §06Strategy Brief
The reviewed eight-section Physical Reserve Strategy Brief. The brief is the engagement’s control document and is delivered before acquisition; it sits alongside the implementation file as the strategic record.
- §07Annual review
A written annual review (semi-annual at the Family Reserve tier) revisits allocation, custody architecture, titling, insurance posture, and exit pathway. Revisions are appended to the original sections rather than replacing them, preserving the audit trail.
The client retains the full file. The Office retains an internal copy for review and audit purposes. Document originals (signed agreements, original insurance certificates) are delivered to the client; the Office’s copies are working references.
All-risk coverage, named carrier structure, summary in the file.
All metals at all three facilities are fully insured under all-risk coverage carried by the depository for the benefit of the holdings. The underwriter is typically Lloyd’s of London; the specific carrier, broker, coverage scope, and per-occurrence and aggregate limits are named in the insurance summary delivered with the engagement file.
“All-risk” covers theft, fire, employee dishonesty, mysterious disappearance, and the named perils standard in institutional vault insurance. The summary names the coverage exclusions explicitly so they can be reviewed by the client’s counsel or the client’s P&C broker independently.
Insurance held by a depository is structured for the benefit of the holdings, not for the benefit of any specific client’s individual position. In the event of a loss, the recovery pathway runs through the carrier and through the depository’s claim process. The Office’s posture at the brief stage is to disclose this structure and, where a client’s situation warrants it, to recommend supplementary coverage through the client’s own P&C broker — named in the brief as a flag, not silently absorbed.
Titled to whatever the client and counsel direct.
Custody is operational; titling is the client’s decision with counsel. The Office is not a law firm and does not propose, recommend, or evaluate ownership structures. Once the client and counsel have established the structure, the Office coordinates the depository agreement, account opening, signature authority, and the documentation chain around it.
The operational shape of titling coordination — what the depository receives, how signature authority is configured, what records the engagement produces — lives on the dedicated titling page below.
Operational rights named in the depository agreement.
- Inspection
Each depository in the panel offers client inspection rights under defined procedures — typically requiring scheduled appointment, identification verification, and adherence to facility security protocol. The Office coordinates inspections on client request; the inspection right is named in the depository agreement and exercised by the client at their discretion.
- Audited reporting
Each depository in the panel maintains independent audit relationships and produces audited holdings reports on a defined cadence. Audit findings are made available to the holding party on request. The Office does not produce its own audit; the Office relies on the depository’s audit infrastructure and names the depository’s auditor in the engagement file.
- Withdrawal
Physical withdrawal — client takes physical delivery — is available at every facility under the terms of the depository agreement. The operational path involves scheduled handoff, insured transit, and chain-of-custody documentation from facility to delivery destination. Withdrawal is rare in practice for engagements at this scale; partial drawdown via sale (which keeps the metal in custody until the buyer takes title) is the more common path and is documented in the exit architecture.
- Transfer between facilities
Inter-facility transfer — moving holdings from one depository in the panel to another — is available under named procedures, including insured transit, dual chain-of-custody documentation, and reconciliation against the receiving depository’s holdings statement. Engagements that adopt multi-depository custody specify the transfer protocol in the brief.
- Transfer of beneficial ownership
Change of beneficial owner without physical movement — e.g., transfer from an individual to a newly-formed trust, or from one LLC to another — is executed through the depository’s titling-change procedure. The Office coordinates with the client’s attorney; the depository updates its records under the new agreement; the holdings statement is re-issued in the new name. No physical movement; no acquisition cost.
The protocols an attorney expects to find named in writing.
Death. Holdings transfer per the titling instrument. For metal held inside a revocable living trust, the trust’s successor-trustee provisions govern; no probate. For metal held in an individual’s name with a beneficiary designation (where the depository agreement permits), the beneficiary takes title on production of a certified death certificate. For metal held in an LLC or other entity, the entity’s operating agreement and governing instrument control. The Office coordinates with the executor or successor trustee; the depository re-issues the holdings statement in the receiving party’s name; no physical movement is required.
Divorce. Holdings titled in joint or community-property structures are subject to the divorce decree. The Office coordinates the operational re-titling with the client’s family-law attorney once the decree is final; the depository updates its records; the holdings statement is re-issued to the receiving party. Until the decree is final, the existing titling controls and no operational change is made.
Incapacity. Where a durable power of attorney is in place naming the agent and the agent’s authority over the holdings, the agent assumes the client’s operational role under the depository agreement. Documentation of the power of attorney is filed with the depository at engagement or at the time of incapacity; the Office coordinates with the named agent on the same terms it would coordinate with the client.
In every case the operative discipline is the same: the Office relies on the legal instruments the client’s attorney has put in place and on the depository’s standard procedures. The Office does not execute legal transfers; the Office coordinates them. The brief identifies the relevant instruments by name and flags the jurisdictional and timing considerations for the client’s counsel before any acquisition is executed.
The custody is what survives the document being read by someone the client never met.
What happens if a depository fails. Named in writing.
Allocated and segregated metal is the client’s property. It is not part of the depository’s balance sheet and does not enter the depository’s estate in the event of insolvency. In a depository failure scenario, the operational path to re-establish access runs through the depository’s administration: bar identification against the holdings statement, physical retrieval, transfer to a receiving facility, and reconciliation. This pathway can take weeks or months and can be costly; the metal does not vanish.
The structural protections that determine what survives the failure are the recordkeeping integrity of the depository (which is why bar-serial-level documentation matters), the segregation of the holdings (which is why segregated ≠ allocated alone), and the depository storage agreement’s explicit treatment of insolvency, regulatory action, and force majeure. The Office reviews each depository’s agreement against this checklist before adding the facility to the panel.
The historical precedents that govern the institutional understanding of these failure modes — including the Re Lehman Brothers International (Europe) administration and the MF Global trustee proceedings — are read at length in Office Note 06. Neither precedent involved precious-metals depositories directly; both inform the structural-honesty discipline the Office holds itself to in facility selection and agreement review.
The dedicated diligence treatment of the depository failure question — bankruptcy-code characterization, the MF Global and LBIE precedents read end-to-end, the three depository-agreement clauses counsel reviews, and the three operational failure-mode categories — is Office Note 08 — The depository question.
Custody is operational. The brief is the engagement’s control document.
The reviewed Physical Reserve Strategy Brief is the document under which the engagement runs. Custody architecture — the facility selection, the allocated-and-segregated discipline, the documentation chain, the insurance posture, the death/divorce/incapacity protocol — is §03 of the brief. It sits alongside reserve allocation considerations (§02), titling (§05), exit posture (§07), and the open questions named on the page (§08).
The brief is the engagement’s control document; this page is the reference an advisor reads before the brief lands. Both are designed to be read by the client’s attorney, CPA, family-office staff, or trustee independently and arrive at the same answer.