Lear Capital Review - What you Should Know about Lear Capital
Lear Capital is one of the financial companies that aggressively advertise to potential clients about the benefits of rolling over to gold IRAs. Research shows that there are at least 208 commercials aired on TV every 30 days promoting Lear Capital and its precious metal IRAs. However, before you chose Lear Capital, you need to conduct your own due diligence to determine how the company truly operates. This review provides an objective review of Lear Capital outside the mainstream advertisements to give you a true picture of how they operate.
One sensitive piece of information most unsuspecting customers are unaware of is that gold IRA custodians, like Lear Capital, increase the price of precious metals to accommodate a profit margin. A review of the terms and conditions contract from Lear Capital shows that the company adds a certain percentage of the base price of the precious metals as a profit margin.
Silver and gold bullion attract a profit margin of 2-10 percent of the actual price of gold. However, the greatest margins charged by the company are in numismatic and semi-numismatic coins. Numismatic coins are rare or collectible coins. There is somewhat less regulation by the IRS on these coins and Lear Capital takes advantage of this to increase the profit margin to an average of 29 percent. Essentially, every customer who buys such coins buys them at a price of around 129 percent of their actual value.
For you to break even, the price of these coins needs to appreciate by close to 30 percent. An example that puts it into perspective is that if the market value of a set of numismatic coins is 10,000 dollars, Lear Capital will sell it to you at a price of 12,900 dollars. If you decide to resell the coins on the same day, you can only get 10,000 dollars. In essence, the profit margins charged lead to a 2,900 dollar loss. These are outrageous margins, and many unsuspecting people find themselves with gold that is overpriced.
The only way you can make a decent deal with Lear Capital is by purchasing gold bullion. However, the representatives of the company have been instructed to try to convince customers to purchase rare precious metal coins instead. In 2016, Lear Capital advertisements encouraged customers to purchase the silver polar bear, snow falcon, and the arctic fox numismatic coins. However, these coins gave the company profit margins of over 30 percent at the expense of the clients.
The exploitative margins are one of the main reasons why Lear Capital is embroidered in a myriad of frivolous lawsuits. Many of the suits come from customers who unwittingly made losses as the company charged exorbitant profit margins.
Lear Capital is facing many lawsuits with most plaintiffs claiming that the company gave misleading information in its advertisements. The advertisements are misleading in two ways. First, they give market forecasts based on past statistics. Most of their advertisements refer to the increase in silver and gold over the last decade. It is true that between 2000 and 2010, precious metals had a considerable increase in value. However, since 2011 to 2016, the gold prices have been quite volatile and there has rarely been a steady rise. Creating the perception that gold is still at the 2011 high is misleading to most investors. In the third 2016 quarter, gold was 33 percent lower than the 2011 price, and silver was 60 percent lower than the 2011 peak.
Additionally, Lear Capital has often claimed that rolling over your IRA or protects your wealth, especially when you purchase their 1.5-ounce numismatic coins. However, these advertisements aim at encouraging customers to change from bullion with a 2-10 percent profit margin to numismatic coins -with a 17-33 percent profit margin for the company.
The video above is an example of advertisement that creates the fear that the American economy is about to collapse and that their coins are the only way to guarantee the safety of your retirement savings. They have even made adverts about the 1933 Roosevelt executive order that made it illegal to own bullion to convince customers to purchase overpriced numismatic coins.
Most unwitting customers believe that financial companies like Lear Capital are obligated to give sound financial information to their customers. However, the contractual agreement you sign with Lead Capital absolves them of fiduciary obligations. This means that the representatives and sales agents are allowed to convince you to make an investment without any regard to your benefit. The representatives are only concerned about the company’s bottom-line and their commissions.
Poor delivery of coins and altered consumer ratings
Aside from the glaring exploitative margins and misleading adverts, there are other reasons for concern. First, how long Lear Capital takes to deliver physical coins. You would assume that your coins would arrive on the same day or at least within the week of purchase. However, Lear Capital stipulates that they will deliver the precious metals within 28 days. However, many customers have to wait almost 40 days for their bullion or coins to be delivered. Lear Capital defended itself, claiming that they can sometimes take 12 days to process some of the orders made by check.
Additionally, most forums of investors are filled with examples of people who have lost money after Lear Capital sold them numismatic coins instead of bullion.
My aim is to provide you with greater insight of the company Lear Capital. All the material that I have provided is either in their contractual agreement or on the BBB website. Would I call Lear Capital a scam? I cannot affirm that because there are some people who are happy with the services the company offers. However, Lear Capital has a lot of misleading advertisements, exorbitant margins, and controversial consumer ratings. Coupling this with a large number of bait-and-switch lawsuits, I would not recommend Lear Capital to anyone who is thinking about rolling over to a gold IRA. There are too many shady and deceptive things about the company.