that depends on how much gold you plan on buying

if you are buying say RM100, you pay RM2 against spot and RM2 for annual management - that is cheap
if you are buying say RM1k, you pay RM20 and RM20. you might argue that it is cheaper to buy the GLD - but that will cost you RM80 in fees on the way in
if you buy UOB gold, you need to buy a minimum of 20g and if you have less than 10g, you are charged RM2+ per myth - so if you have 1g of golf, you end up paying RM24+ a year in fees
if you buy RM100+k in gold, then the cheapest way of buying gold is through GLD - no one is cheaper and safer

i am afraid that you are wrong

because gold held by the customer belongs to the customer and not hellogold, these are not assets of hellogold that can be seized by the liquidator/administrator to repay creditors

by way of contrast, the gold in most bank investment accounts are a liability from the bank to the customer and therefore the customer is a creditor

Irrespective of absolute, 2% mgt fee per annum plus 2% per transaction fee is very high. If you buy once, sell once and buy once again to hold till end of the year...that's 8% gone. Gold as an investment or as a hedge for whatever is overrated. You get zilch for holding it.

Your customers' claim to the gold through bailment is only as good as your records provided to the bailee.

If your records is messed up, intentionally or otherwise, then your customers have no recourse.

In contrast, a bank is a big corporation with long history in business. They carry high level of credibility and confidence to their customers

I think many would rather be a creditor to a bank then a bailor of an arrangement of a new company

Hellogold is not a trading platform to take positions in and out of gold throughout the year. Holding any asset or less than a year is not really for investment. It is designed to be a long term savings (c 3-5 years) vehicle for people to access investment grade gold at an affordable transaction size and which will also allow them to get access to personal financing at an affordable rate

In terms of gold as a hedge, it is not a good short term hedge as gold tends to be completely uncorrelated 1) in the short run to most asset classes and 2) when markets are behaving 'normally' or volatility is normal. Gold acts as a great hedge - in the emerging market context of the ordinary people of ASEAN- against any weakening of the local currency in the short term and against inflation in the long term

Based on this analysis, your customers would be small gold buyers of less than 10g-20g

That is your niche market. Any bigger gold purchase, customers would be better off buying from UOB and GLD

You are correct to be concerned with how any start-up is set up and looks at risk management. We manage our transaction records very carefully

1) we publish our customer records in public at the end of each day so that everyone can examine them and reconcile these to the gold positions
2) every time a customer makes a transaction, it is recorded not just on our database but a record is posted in his app and confirmation is sent to the customer
3) We have appointed Deloitte as our auditors- they will provide us with feedback on the strengths and weaknesses of our internal controls on an ongoing basis
4) we are currently developing a series of blockchain contracts that will enable us to move our customer records from the traditional database which can be manipulated as you pointed out to a private blockchain where records are by their nature immutable. When this phase of work is complete, we believe that our customer records will be safer from a immutability perspective than those held in most traditional banks
5) I believe that the company HelloGold keeps will provide additional comfort to our customers. Our launch partner is Aeon Credit Services in Malaysia. We also hope to be announcing a tie up with one the largest banks in ASEAN in the next month or so. Moving further along, we are in discussions with one of the largest mobile Operators in the region as a partner and a key investor who helped to launch one of ASEAN's most succcesful start-ups in recent years

We are focused on helping ordinary people in ASEAN save better and get access to more affordable financing. There are plenty of banks and brokerage houses who have great products to offer but they only really make these available to the wealthy and mass affluent and not to everyone

TS looks cool bros.... a lot of flak from forumers and still cool answers...

Ya...new start-ups always face customer confidence issues. Glad to hear you are in the process of partnering big companies.

All the best to you and your venture !

I understand you are a start up and need all the margins to survive. Hope when you grow larger, you will be able to compete with the big boys !

Short term or long term is not the point. Transaction cost and management fee too high. At 2%, it is like the more I invest, the more I pay you 2%. It is like your company are depositing FD with me and I have to pay you 2% every year. LOL. The money comes from me! If I invest in a fund and the fund provides expertise in managing my money to beat the market, then 1% or 2% management fee is still justifiable. Now retailers invest with you and you do not provide any expertise and you charge 2%? that's ridiculous! Oh well.......I hope retailers will see that this is a rip off. However, 99.99% of the time they are not aware of such things. Not surprising given forex and whatever fast money schemes have done well with even more ridiculous things. This is a good business proposition for you, congrats. I hope I have done my tiny part to let retailers know that in the long run, whatever small amount they invest is meaningless to them ( and hence the word hedging is laughable) but collectively they represent a 2% income to your company. Of course, you will say it will cost a bomb etc storing those things but just like how the banks work, I am quite sure only a small % is kept in physical to meet the small "exchange into physical" requirement.

BTW, whats the personal financing you talk about?????? it sounds fishy already...sorry..couldn't resist

Sorry - what's TS?

Thanks! We simply want to serve the markets that the big guys don't want to serve

We are very transparent about what we charge - https://help.hellogold.com/en/category/fees/ - we want customers to know exactly what the fees are so that they can make an informed decision

As I have said in a number of other posts, the gold is fully allocated which means that 100% of the customers' gold sits in the vault 100% of the time. In fact, we are over-allocated in that we have more gold sitting in the vault that our customers gold has. I have summarised what I have posted in previous replies here and I will include the link for you to review at your leisure

At the end of every day, HelloGold publishes a number of statements that show 1) the amount of gold our customers have with us 2) the amount of gold that we have with our vaulting agent according to our records and the corresponding bar numbers 3) a link to our vaulting agent's site that also displays the amount of gold that they hold on our behalf according to their records with the corresponding bar numbers

https://help.hellogold.com/en/how-do-i-know...stored-is-safe/

Over and above this, if customers want to check on the gold, we can organise for them to visit the vault in Singapore. Obviously this necessarily needs to be arranged during the working week and during working hours

In terms of the personal financing question, in ASEAN, less than 20% of loans granted to individuals were from banks or non-banking financial institutions. In contrast, more than 25% of individuals borrowed from friends and family, private lenders and employers. Where unsecured bank loans are available, the financing costs are extremely high with an effective lending rate of 15% to 25% in Malaysia as an example. SO we have tied up with Aeon Credit to try to help our customers get access to more affordable shariah loans.

Say you have 10 grams of gold that is worth RM2000, and you need access to emergency cash, Aeon will provide you a loan for 70% of the value of the gold for a year for a fee that will be equivalent to 8+% p.a (but this is subject to confirmation). So you don't have to sell your gold to get cash and you have a year to pay off the loan. Obviously if you don't pay off the loan on time, Aeon will instruct HelloGold to liquidate the gold and repay them the outstanding debt. Any remaining monies after the loan has been settled would be returned to the borrower

how about silver?

We have plans to bring on the other precious metals (silver definitely, potentially platinum too) - probably in 2018. Right now we are focused on launching a number of other products and features for gold

Hellogold business concept sounds good and easy to understand, at least to me. It is a bit like a pawn shop concept but with only gold as your collateral.

Tying up ith Aeon is a good move as even if people do not trust you, they will trust the Aeon brand name.

Good luck to you friend Robin Lee. I am happy that there is another way to enable fellow Malaysian to raise emergency cash!

Xuzen

Given the questions and concerns that many rightly have about whether gold products are scams or not, I thought I would share with you an article I wrote for the Edge. It sets out the key attributes that people should think about when they are looking at using any gold provider - whether it is HelloGold or any other platform

http://www.theedgemarkets.com/article/opin...all-glitters…

Well, I think HelloGold is providing another venue for small timer like me to start invest in gold. Some of the banks requirements are too much for ikan bilis like me.

Glad to hv alternative.