How does the ownership structure affect this risk?
An unallocated account generally gives its holder a contractual claim against the provider rather than title to identified bars. LBMA's account guide explains that credit exposure. Allocated custody identifies client-owned metal, but the actual agreement, records and control still matter.
Does allocated storage remove all risk?
No. Identified ownership does not eliminate theft, fraud, operational failures, access delays or legal disputes. Insurance, custody controls and ownership documents answer different questions. Avoid treating a single label as a promise of immediate recovery if a provider fails.
What should you check in practice?
Identify the contracting entity, what you own, how it is recorded, whether the provider may use or pledge it, and the process for withdrawal. For a material holding, have appropriate advisers review the documents rather than relying on a broad assurance that metal is safe.