Close Close

Technology > Investment Platforms > Turnkey Asset Management

How to Help Clients Manage Their Most Precious Assets

Your article was successfully shared with the contacts you provided.

Collectibles are not necessarily the kind of assets that financial advisors focus on but they may be the gateway to developing closer relationships with clients.

Approximately 25% of wealthy investors consider themselves collectors and, on average, they estimate that their collections represent on 10% of their total wealth, according to a new UBS Investor Watch report.

Among the valuables they collect are gold and coins, fine art, precious jewelry, stamps, autos and antiques — whatever their passion. Profit is not the motivation, but the collections are assets that have value.

(Related: The Collectibles Market: More Than a Labor of Love, Potentially Very Lucrative)

Collectors, however, don’t treat them as valuable investments, says Sameer Aurora, the head of client strategy at UBS Wealth Management Americas and the lead researcher of the report, called For Love, Not Money. “Four-fifths would rather sell assets in their investment portfolio instead of parting with a piece in their collection” if they needed the money, says Aurora.

This emotional attachment can help advisors strengthen and deepen their relationships with clients.

“As the industry evolves … and advisors engage with clients to form a complete financial picture, some of these nontraditional assets start to come into sharper focus,” says Aurora. “They represent an opportunity for advisors to engage with clients.”

And many clients could use their advice.

Consider these findings from the UBS report, which is based on a survey of almost 2,500 high-net-worth investors with at least $1 million in investable assets, including 608 with a least $5 million in assets.

  • 81% of investors hope to pass on their collections to their heirs, but 57% haven’t taken steps to educate their heirs about their collection and 65% of heirs have no interest in keeping the collection
  • slightly more than half of investors have never had their collections appraised and 44% haven’t insured their collections
  • 27% of collectors with more than $5 million in assets consider their collection their most prized possession, and 22% spend more on their collection than they spend on retirement.

“The data clearly show that most investors have not properly prepared their heirs to manage, appraise or sell their collection,” says Aurora.

That’s where advisors can help, engaging in conversation with their clients and their heirs about the collections they own, how much they spend on their collections, whether they’ve been appraised and insured, and how they hope to pass their collections on to maintain or to sell.

“We don’t expect advisors to be expert in any one collectible but they should certainly be aware of what their clients are collecting, what their passions are and have some knowledge about how their clients want their collections managed — either liquidated or passed on to their heirs. … It’s an important part of a broader conversation around holistic wealth management,” says Aurora.

Noting the he does not mean to be “prescriptive” because “every advisor is different,” Aurora suggests that advisors learn if a client’s collection has been appraised, insured and stored securely in order to preserve the value its value.

And if their heirs aren’t interested in maintaining the collection, the advisor can help the client contract a legacy to donate the collection to a college, museum or other institution, or consider liquidating the collection or selling parts of it, which could enhance an estate.

About one-third of art collectors with more than $5 million in assets, and 21% of those with $1 million to $5 million, plan to leave their collections to a museum, according to the UBS survey.

— Related on ThinkAdvisor:


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.