Manage Your Collection
Usually, only the collector plays an active role in the buying and selling of art and other collectibles. Advisors and professionals must support clients in managing their collections. As part of that management, they will need help finding the professionals with the proper expertise and experience to manage the collection. Outside expertise must work within the collectors financial and legal affairs to coordinate tangible asset management with the investment management of the family wealth—in both routine and in crisis situations—without the high price tag of bringing these specialized services in-house. These professionals provide the collector the “rolling chassis” of inventory, aggregation, valuation, storage and management of the collection.
The remarkable “stickiness” of individual ownership of collectibles, encourages a long-term understanding and education of how the collectible fits into the overall collection. The financial profit from the immediate sale of a collection may far exceed the comparable profit on an alternative investment. Emotional, personal and social “return” on the actual ownership of the collectible, often trumps the financial rewards; and, the desire for both the collector and their heirs is that the collection will not be sold. Indeed, far from having to be cautious of “passive” investors in art, collectors often become too personally active and emotionally involved in the ownership of the items. Collectors have more expertise and knowledge about their areas of interest than do most of the professional advisers available to “manage” the collection. The result is that, rather than having professionals compensated directly for their management expertise and access to the collectible markets, they are paid for the curatorial, research and organizational services to the client.
Matthew Erskine is managing partner at Erskine & Erskine.