Approximately a third of clients whose net worth is north of $10 million are collectors or accumulators. The planning strategies for this “silent” emotional asset of art, antiques and other collectibles require an art succession planning team to maximize the results for these clients.
Goldmine of opportunities
If you’re both a financial advisor and accumulators of “stuff” (coins, cars, wine, stamps, etc.), then you’re already primed to become a key component of this team. This combination opens a goldmine of opportunities for you, as you can offer to existing clients, prospects and valuable referral sources–attorneys, accountants, and trust officers–your expertise and passion for such assets.
You can be in a preferred position when talking to prospects who share your passion for collecting things and who love to discuss their often irrational, crazed and loveable “art stories” regarding their collections. When they discover you are a fellow collector, you immediately go from being another provider of insurance and financial solutions to a trustworthy friend–and everyone prefers doing business with friends.
Here are some suggestions for turning your passion into business opportunities:
1. Create your own historical reference catalogue. Included in this catalogue is a comprehensive inventory of the collection, which describes each piece, its cost basis, and provenance. Also included are color photographs, collectors’ recollections, artist biographies and an ownership rights protection report, which can mitigate future ownership issues.
This document is an excellent starting point to share with clients and fellow advisors and is the initial step in art succession planning. This step will allow you and the advisory team to begin planning for arts and collectibles as they do the client’s traditional assets. Also, referrals from attorneys and CPAs will be easier to obtain when you can give them, and clients of theirs who also collect, a succession planning roadmap to follow.
2. Join a local association (sports memorabilia, cars, historical documents, contemporary art etc.) for the things you collect. The other members eventually will become future clients, as you will find that most collectors do not have a plan for the future course of their collections. These associations usually have a newsletter. Ask to contribute to a column on the benefits of financial, philanthropic and estate/legacy planning of art assets.
3. Join a committee at your local museum, such as the acquisition committee. You will be working with other committee members who may be high net-worth collectors in the most compatible way. Art succession planning proves very beneficial when creating the “perfect” museum gift: the donation of the best pieces of a collection and a check for future delivery in the form of an insurance policy.
4. Get to know the galleries in your city who deal with the type of objects you collect. Discuss with them the benefits their clients will derive from your art succession planning team’s strategies.
5. Discuss how your team of art succession planners and their strategies can result in either gifts of art or a remainder interest of art sold in the correct trust. If you are already working on the board of a charity (art-related or not) you can begin this process. Your fellow board members are the high net worth individuals with whom you are looking to do business. Some will share your passion for collecting.
6. Learn to be a successful art succession planner by partnering with a group that has the knowledge and experience necessary to guide you through the planning process.
7. Set up appointments with the advisors in your area to show them that you are now a part of an art succession planning group and can assist them when their clients have assets that consist of art, antiques or collectibles.
Are you starting to see the picture?
Art succession planning is becoming the hottest market for the planning community. If you’re an acquirer of arts and collectibles, as I am, then you understand the passion of those who also collect. You should recognize, too, the value of partnering with a team of advisors that will allow you to pursue planning opportunities and build your business.
Michael Mendelsohn is an art collector, philanthropist and president of The Briddge Group, a Rye Brook, N.Y.-based art succession planning. You may e-mail him at info@BriddgeGroup.com