Financial Advisors' FAQs
Below are some common questions and answers specifically for Financial Advisors.
Simply click on the question to jump to the appropriate answer.
Q. "Why do I need rare coins in my client's portfolio?"
A. " The answer is diversification. The majority of your product offerings are in equity or
paper investments, such as stocks, bonds, mutual funds and annuities. These make up the vast bulk of
your client's assets and in most economic scenarios will provide safety and growth. However,
there are certain times when tangible or real assets are important to financial portfolios. One of
the most time-tested methods of 'wealth insurance' has been rare coin investments. They are
easy to store, easy to value, easy to transport and easy to sell. It is for these reasons that clients
should have a portion of their portfolio in rare coins."
Q. "How much of a portfolio should be in rare coin investments?"
A. "Generally5-15% of a portfolio can be in tangibles. The typical investor usually has at least 10% of his
assets in rare coins. The actual percentage that is suitable for your clients can be easily determined by a
review of your client's present holdings. U.S. Tangible depends on the input of the financial planner to
insure that the investment is appropriate for the client."
Q. "Is this a rare coin fund?"
A. " No. In a rare coin fund, you receive a certificate for only partial ownership of a coin
portfolio. There are additional fees in a fund for management, legal costs, distribution and storage.
A fund splits the profit between the general partner (the person who manages the fund) and the limited
partner (the investor). In a fund, all control belongs to a general partner. In the USTIC program,
there are no additional fees or splitting of profits. Full control of the portfolio is with the investor."
Q. "What is an investment grade rare coin?"
A. "Many coins can be considered investments' for a number of reasons. However,
for the typical non-collector investor, these general guidelines should be used:
Q. "What does certified mean? Is it necessary?"
- United States coins only.
- Dated prior to 1934.
- The condition or "grade" is Mint State (MS) or Proof (PF) 63 or higher (64, 65,
66 or 67). Coins graded 68 to 70 are very difficult to price due to extreme rarity and should
usually be avoided.
- All coins must be graded and certified by either the Professional Coin Grading Service
(PCGS) or the Numismatic Guaranty Corporation (NGC).
- Prices should be a function of the Certified Coin Dealer Newsletter (CCDN) and the Coin Dealer
- The population of the coin (the number of coins that have been graded by either PCGS or NGC)
is low for the series whenever possible. This information is available from the current edition
of the PCGS or NGC population reports."
A. "Certification by one of the recognized independent grading firms, either the Professional
Coin Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC) provides you the assurance of
an independent 3rd party verification of the grade of the coin, insures that your
client's coin is not a counterfeit and the grade assigned was issued in conformity with the industry
standards of one of the leading grading services (not assigned by a selling' firm). The holder
will also provide for the physical protection of the coin itself. All these benefits make certification
a very necessary part of rare coin investments."
Q. "Does the price of gold or silver have any effect on the price of rare coins?"
A. " For investment quality coins, the effect of bullion price movements is minimal, if any.
These coins have value due to their rarity and collector demand rather than any intrinsic metal
content. For example, in the art world, the value of a Picasso is not based on how much paint, wood
or canvas is used to create the work. The same is true with rare coins. An investor who buys
a $20 gold piece for $25,000 is not concerned that the coin contains an ounce of gold currently worth
$350. In lower quality coins, those that are of poor condition and easily obtained, the price is
determined largely by bullion price movement. In this example, a poor quality $20 gold piece that is
sold for $420 has over 80% of its value based on bullion content."
Q. "How have rare coins done as an investment?"
A. "Like any other investment, it depends on the time frame that is examined.
Historically, rare coins perform best when considered as a long-term investment. Paper assets make
up the majority of a client's portfolio; rare coins can potentially hedge future cyclical economic
events that affect those assets."
Q. "How can I keep track of how my client's rare coin investment is performing?"
A. "That is easy. U.S. Tangible will provide a written evaluation for you, at no charge, at least
annually--on your request. If you need more frequent reviews, simply place a toll-free call to our
offices. All the evaluations are done by computer and are based on the up-to-date values provided
by the most current independent sources. You will obtain the value of your client's rare coin
investment as easily as you would determine the value of an annuity."
Q. "How long should an investment in rare coins be held?"
A. " Like any other investment, rare coins are cyclical in nature. They go up and down in value
based on economic conditions, market supply and demand. In the past, these cycles occurred every four
to six years, so as a rule your client should plan to commit funds for this period of time. However,
when short term gains are realized prior to the holding period recommended, you and your client can
review the portfolio and take profits where available."
Q. "Where does my client store rare coins?"
A. "Rare coins are very easy to store. They can be stored in a home safe, or in the case of
trusts, in a safe deposit box at a bank or trust company. Since the coins are in sonically sealed,
tamperproof plastic cases of uniform size, they do not require much space. In addition, each client
will receive a "tangibles binder" that contains the invoice, descriptions, histories and
color digital images of all the rare coins in their portfolio. Your clients may keep this binder at
home to review their investment while keeping the actual coins secure in their bank vault."
Q. "How are rare coin portfolios selected?"
A. "After the question of suitability of investment is answered, we will work with you to
determine your client's investment goals, time frame and amounts to invest. Using the criteria
on the selection form coupled with the input from you and your client, a portfolio will be put
together. The number of coins will be dependent upon the amount invested. Typically, for a $10,000
portfolio, there may be four to six coins included. All the portfolios assembled by U.S. Tangible
are customized for each client."
Q. "Must my client or prospect be a coin collector?"
A." No! Investing in rare coins is entirely different than collecting.
You don't have to be an actuary to invest in annuities, nor a stock analyst to invest in mutual
funds. Well, you don't have to be a coin collector to invest in rare coins. U.S. Tangible makes the investment process easy and
understandable, from the time of your purchase until you decide to sell. That's why you should deal with a company of long standing reputation and
integrity. U.S. Tangible has worked exclusively with professional financial advisors who have placed
their investing clients in confidence with U. S. Tangible since 1978. We recognize the special requirements
and concerns of each investor. Every program is designed to make it easy for the client to buy,
track and sell the coins. Most importantly, we work with investors
only through their financial advisors. Each investment is suitable for the client, since
only you and your client (not the selling firm) decide on the priority of the investment."
Q. "What are the minimum suitability requirements for this program?."
A. " USTIC suggests that clients invest no more than 10-15% of their net worth in rare coins.
Net worth is computed exclusive of the home, furnishings and automobiles. In addition clients should
have annual gross income of at least $35,000."
Q. "How easy will it be for my client to sell rare coins?"
A. " Rare coins are among the most liquid and easy to sell tangible assets with many industry
outlets available for liquidation. Your client may elect to sell them back through U.S. Tangible at
any time. We will provide a firm price offer based on the then prevailing market wholesale prices. This
method takes no longer than 5 business days. An additional method of liquidation is through one of our
affiliate's many rare coin auctions. Auctions are conducted approximately once a month at major rare coin
shows throughout the country, where your client's coins would be exposed to the largest numbers of
interested buyers. Depending on which type of auction they choose, the selling process takes anywhere from
1 month to 3 months. Our auction affiliate takes control of the entire process from the time of
consignment to sending the settlement check. So, whether they choose to sell directly or at auction,
selling is efficient."
Q. "Is any special licensing required to sell rare coins?"
A. "No. There are no licenses required for a financial advisor to be able to sell rare coin investments."
Q. "If I am a registered representative, must I advise my Broker-Dealer I'm selling rare coins?"
A. "According to current NASD rulings, yes. The main issue is not whether or not coins are a security, but the issue of compensation
(NASD Rule 3030). If a commission or fee is received by the representative, then notification by
RR/IA's to their NASD member firm may be required under Article III, Section 43 of the NASD Rules
of Fair Practice. On the other hand, many B-D's have approved U.S. Tangible as the exclusive
provider of rare coins and bullion."
Q. "What if I'm not securities licensed, can I still sell rare coins?"
A. "Yes. But for your own protection, conduct your own due diligence and keep a written file
of your investigation and all materials pertaining to the firm. Ask for current financial statements,
preferably from large, nationally recognized independent accounting firms. Check into pricing formulas
for coins, certification sources, length of time in business, liquidation options, types of coins to be
provided to investors and evaluation services. In addition ask about other approved broker dealers,
credentials of principals in the coin field and membership status with financial planning organizations
such as the IARFC and the FPA. Also look into membership status with coin industry organizations as the
American Numismatic Association (ANA), the Professional Numismatists Guild (PNG), the Industry Council
for Tangible Assets (ICTA) as well as being authorized PCGS and NGC dealers."