Wealth Management Strategies for Ohio Collectors

You finish looking at your investment portfolio; some are up, some are down. You shrug your shoulders and move on. You take a look at your collection and you smile. You smile because these things bring you joy, but beyond that joy, they hold value. The problem is, unlike a traditional stock and bond portfolio, that value is hard to quantify. No need to worry, we can help!

A UBS study found that 66% of collectors have never discussed their collection with a financial advisor! (Don’t let that be you)

Our Process that Helps Collectors 

  • Understand: We start by understanding your financial goals.
  • Review: Next we Quantify Your Collection as Part of Your Investment Portfolio.
  • Develop: Then Develop an Investment Strategy that Compliments Your Collection.
  • Plan: Lastly, help you plan to Effectively Transfer Your Collection and Protect Your Legacy.

A staggering figure uncovered by the UBS wealth management study, showed that 39% of wealthy collectors can’t estimate the current value of their collection. It’s probably fair to say that as collectors, we tend to accumulate over time and without a particular reason to evaluate, it can be hard to say what the exact value sits at. It is important, however, to understand the current market value of your collection for two reasons. 

  • Alternative Options: Everyone has heard that they need to diversify their investments to protect themselves from concentration risk. The problem is, very few, if any financial advisors will factor in your collection when determining your asset allocation. This is no fault of their own, but a broader lack of information on collectibles and alternative investments. It’s hard for them to value and understand your collection, so they shy away from having that conversation. We take a proactive approach with collectors to ensure that your investment strategy factors in your collection value. 
  • Risk Management: Whether you choose to insure your collection with an insurance carrier or simply self-insure, you need to know the value to report to the insurance company or take inventory yourself, especially if you have numerous high dollar items. Location also becomes a factor when we start talking about irreplaceable items, specifically storing collectibles in different locations to protect from a total loss. A solid risk management strategy can help ensure your legacy lives on.

If your collection value exceeds $100,000 you should be working with an advisor that addresses your concerns. 

Many financial studies have been performed in order to better understand how ultra high net worth investors allocate their wealth, and nearly every study has found that collectibles play a part in their asset allocation. Depending upon the study, collectibles can range from 10-20% of a high net worth investor’s portfolio. A recent Deloitte study found that the average ultra high net worth portfolio included; Equities (Stocks), Real Estate, Bonds, Cash, Private Equity, Collectibles, Precious Metals, and Other Business Interests. You can easily see that these successful investors have nowhere near the amount of concentrated exposure the average investor has to the stock market that many mainstreet advisors recommend. 

The good news is that you have already taken steps to diversify your investment portfolio with collectibles. The next step is to address the rest of your investment portfolio so that it compliments your collection and is optimized for long term wealth accumulation and preservation.

The same study, found that 81% of collectors plan to leave their collection to the next generation, but 57% of those collectors have not spent the time to teach their heirs how to manage, appraise, or sell their collection. Even more alarming is that only 35% of heirs that will inherit a collection have an interest in it.

Many collectors are not properly prepared for the inevitable transfer of their collection.

If you have family members that would appreciate and curate your collection while others would prefer to have the financial equivalent of the collection, there are options that could actually allow you to do both. 

A funded collection buyout agreement is something that can greatly alleviate stress and answer these questions;

  • How much do I need to leave behind?
  • Will it be enough?
  • Do I need to start liquidating now?

When done properly, you can utilize different financial tools that are best suited for the situations mentioned. A good strategy can help your family avoid any resentment that can come from certain individuals receiving physical assets over lesser or greater cash equivalents. It can also allow those that share your collecting passion to continue the journey you started while still providing financially for your family overall. 

Next Steps

Whether you collect art, cars, wine, stamps, coins, currency, comic books, trading cards, precious metals, or more, we can help you;

  • Quantify Your Collection as Part of Your Investment Portfolio
  • Develop an Investment Strategy that Compliments Your Collection
  • Protect Your Collection with Insurance & Risk Management Strategies
  • Effectively Transfer Your Collection and Protect Your Legacy

It all starts with a conversation, let us help you get started today, simply click here