Aside from the esthetic pleasures a collections provide, your clients also may reap the benefits of diversification from their collection: art, cars, and maybe guitars—as an asset class. The report cites James Kane, president of HUB Personal Insurance, who points out that, "While stocks have outperformed most categories of art investments over the past 25 years on a compound basis, art benchmarked by the Mei Moses Index has outperformed stocks over the last ten years."
The white paper lists 11 ways wealth managers can help clients protect their collections:
- "Assemble the correct team of experts."
- "Establish a system for tracking and valuing the collection on a regular basis."
- "Protect the collection from theft."
- "Protect the collection from fire and smoke."
- "Choose the display location and method to guard against damage from water,
- sunlight, and other hazards."
- "Make sure art in storage is well protected from the elements."
- "Store fine wine in a properly constructed wine cellar."
- "Use professional art shippers when putting collections in transit."
- "When loaning a valuable art piece or collection to a museum, make sure the museum has adequate safety measures and insurance in place."
- "Develop an evacuation plan in case of disaster."
- "Maintain proper insurance in case of loss, because even the best risk mitigation strategies are not perfect."
Collectibles can be a way to reach clients like no other—a part of their life that may be more tangible than stocks and bonds and apartment buildings. Chances are, they are ardent and knowledgeable about their collection—something completely different to talk with them about that they are very connected to. This attachment to the collection—and all it may mean to them—is one more reason to help them to understand its value and keep it safe from harm.
