UBS, the Swiss financial services firm, has released an “Investor Watch” report that asked wealthy individuals about their collecting habits and the management of their collections.
According to the report, collecting is rarely tied to investment. The number one reason cited for collecting is “It’s a passion of mine” at 57%, followed closely by “I enjoy surrounding myself with beautiful things” at 42%.
Passion and beauty are strong forces, as nearly half of the respondents admitted that they have overpaid for objects. In an emergency, four out of five would sell other assets in their portfolio, rather than something from their collection. Only 14% said they collect to diversify from traditional assets, and a paltry 13% responded that they wanted to profit by selling pieces of their collection.
The most eye-popping stat is how careless collectors can be. According to the report, 51% have never had their collection appraised and 44% have not insured their collection. That’s foolhardy and risky. Collectors should take action to protect themselves and their collections, and properly appraising and insuring the collection is a must. Thirty-nine percent can’t estimate the value of their collection.
A whopping 81% plan to leave their collection to their heirs, but 57% have not taken steps to educate their heirs how to manage, appraise, or sell the collection.
Of those who inherited collections, 39% were not interested in the collection but kept it anyway, and 26% were not interested and sold, or plan to sell, the collection. Only 35% were interested in the collection and plan to keep it. That says collectors are doing a poor job preparing and educating their families about their collections, to say nothing of passing along the joy of collecting.
Collections of art and antiques are not like stocks and real estate, but that doesn’t mean they should be handled haphazardly. Collecting is by its very nature a bit irrational, but collectors should not carry that irrationality over to the care, protection, and management of their collections.
An ounce of prevention goes a long way.
Originally published in the January 2018 issue of Maine Antique Digest. © 2017 Maine Antique Digest