Wealthy Investors Failing to Appraise Collectibles, Report Claims – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Top Stories
Topics
    • Life Insurance
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Content
    • Webinars
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • Free Newsletters
  • Insider
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Advisor News
Top Stories RSS Get our newsletter
Order Prints
January 4, 2018 Top Stories No comments
Share
Share
Tweet
Email

Wealthy Investors Failing to Appraise Collectibles, Report Claims

By John Hilton InsuranceNewsNet

If the collectible’s market wasn’t controversial enough, a new report claims that investors often fail to properly value their collections.

Part of that lies with the motivations driving collectors, concluded the UBS Wealth Management Americas’ Investor Watch Report, “For Love, Not Money.”

A majority of wealthy investors are driven to collect by passion rather than profit, the report found. On the other hand, many collectors “do not even know the full value of their collections nor have had them insured,” UBS reported.

That’s a pretty big deal given the high scope of the global collectibles market, which was estimated at 200 million collectors in 2014.

That number is expected to grow as more baby boomers retire and spend their post-working years collecting fine wine, vintage cars, classic toys, artwork and games.

Collectors are definitely excited about their haul, and do see a financial opportunity down the road. Take comic books – a robust $800 million-per-year industry.

“While everyone’s heard stories of people cleaning out an attic to find comic books they sold at a hefty profit, it’s not just the older books that are valuable,” said Stephen Fishler, co-founder of the New York-based Metropolis Collectibles, the world’s largest vintage comic book dealer. “Even comic books from the last 20 years are becoming more collectible. Some have jumped from just a few dollars each five years ago to $50 to $100 today.”

Smart investors are finding that they can make money off of this trend, he added, but only if they treat it like they would any serious investment.

'Obligation and Guilt'

Likewise, when family collections are eventually passed down, “the majority of heirs have no interest in keeping the collection,” the UBS report said. “The few that do, only keep the collection out of obligation and guilt.”

Here’s more data from the UBS report:

• Eighty-one percent of collectors intend to leave their collections to heirs. Only 35 percent of heirs were interested in the collection and kept it as a result.
• Over half (51 percent) of investors have never had their collections appraised and 44 percent have not insured their collections.
• Most collectors have spent over 20 years accumulating their collections, which represent on average, 10 percent of their overall wealth.
• Forty-seven percent of wealthier investors (with $5 million or more in investable assets) have a preference towards collecting fine art, while only 33 percent of investors with less than $5 million in assets do the same.
• Nearly a quarter (22 percent) of wealthier investors spend more money on their collections than they spend saving for retirement.

Here’s a telling stat from the UBS study: despite spending a significant amount of time and money amassing their collections, 39 percent of collectibles investors don’t know the value of their collections.

“Investors assign a substantial amount of sentimental value to their collections, but do not always realize their financial value,” said Paula Polito, client strategy officer of UBS Wealth Management Americas. “There is an opportunity for investors to manage collections far more effectively, by assessing their true worth, and ensuring that they are protected.”

Passion for collecting can also cloud judgment, with nearly half of collectors admitting that they have overpaid for pieces, or bought or sold an object they later regretted, UBS reported.

Four out of five collectors also confessed that if they needed money in an emergency, they would rather sell assets in their portfolio than part with a piece from their collection.

Two Main Challenges

For financial specialists, the challenge in helping clients manage collectible assets is twofold. One, you want them to indulge (responsibly) into their specific collectibles passion, and two, urge them to sell their more expensive pieces off as they grow older into retirement.

“As an estate planning attorney, I’ve experienced interesting things when clients have passed, or I was called in for estate administrations,” said Gary B. Garland, an estate planning specialist in Manalapan, N.J.

Unless the beneficiaries are collectors themselves, they have no idea of the worth of the items or collection, and are subject to unscrupulous purchasers, he added.

Garland advises collectors to dismantle their collections and sell pieces as part of a coordinated plan. They will get the best prices, know what they’re dealing with, and even get to relive some memories of the collection process.

The bottom line on collecting high-priced items is simple, Garland said.

“Collect if you enjoy, but not as an investment,” he said. “Let your kids or beneficiaries know about the most valuable items, where to sell, and ideally strip the value of the collection while you’re still alive.

“That will take the burden off the kids, and you’ll get a better financial result than they would anyway.”

Brian O'Connell is a former Wall Street bond trader, and author of the best-selling books, The 401k Millionaire and CNBC's Guide to Creating Wealth. He's a regular contributor to major media business platforms. Brian may be contacted at [email protected]

© Entire contents copyright 2018 by AdvisorNews. All rights reserved. No part of this article may be reprinted without the expressed written consent from AdvisorNews.

Older

How TPAs Can Prepare For The Future Risk Landscape

Newer

Trump Administration Proposes Expanding Association Health Plans

Advisor News

  • ‘Spring Cleaning’ Includes Your Client’s Finances, Too
  • Retirement Savers Remain Confident Despite Short-Term Woes
  • City of Memphis Helps Employees With Financial Wellness Programs
  • IRI CEO: ‘I Am Optimistic for Our Industry’s Future’
  • 2/3 Of Near-Retirees Failed Or Barely Passed A Basic Social Security Quiz
More Advisor News

Annuity News

  • LibertyMark Freedom Fixed Indexed Annuities Launch
  • Nationwide Adds BNP Paribas Global H-Factor Index To FIA
  • Transamerica Launches Structured Index Advantage Annuity
  • Recommending FIAs: Start With The Client’s Objective
  • NC Man Wins First $5 Million Prize In Scratch-Off Game
Sponsor
More Annuity News

Health/Employee Benefits News

  • EBRI Studies Expanding Pre-Deductible Coverage For Chronic Conditions
  • Most Consumers Choose To Pay Higher LTCi Premiums
  • CMS Creates More User-Friendly Medicare Website
  • Integrity Marketing Group Buys Ritter Insurance Marketing
  • Maine Powerless In Big Fight Between Its Largest Insurer And Hospital
More Health/Employee Benefits News

Life Insurance

  • The 5 Secrets To Retaining Financial Sales Professionals
  • Life Insurance Activity Continues Dip In April But Still Stronger Than 2021, MIB Reports
  • Transamerica Adds Execs To Annuity And Life Insurance Team
  • Northwestern Mutual Invests $5M In Black-Led Financial Institutions
  • Protective Life Closes On AUL Acquisition
More Life Insurance

- Presented By -

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

FEATURED OFFERS

Get Linked INN to your industry Connect with INN on LinkedIn to be first on all the news and insights that matter to your industry.

Press ReleasesAll press releases

  • OneAmerica Commits $1 Million Toward Financial Literacy
  • Transamerica Structured Index Advantage Annuity Offers Investors More Certainty with Upside Growth and Downside Protection
  • Senior Market Sales Creates First-of-Its-Kind Lead Acquisition Platform
  • Growing financial services firm Kuvare opens Des Moines office in East Village, continuing expansion in Iowa
  • BetterLife Selects iPipeline® to Digitally Transform Its Business & Better Serve Future Generations
Add your Press Release >

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • Webinars
  • Monthly Focus

Top Sections

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2022 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • Sitemap
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.