Tag Archives: art

Art Fraud and Risk Management

We are all aware of numerous, infamous attempts to defraud galleries with forged paintings. We attend conferences and pay attention to this sort of a story because it is remarkable to think that anyone could trust, and breach trust, to that magnitude. Sadly, it happens every day.

Every day, there is a crate of an artwork that is sold and not reviewed for condition first. Every day, there is reliance on condition of an artwork by review of the crate alone. Every day, there is a consignment that takes place without written confirmation and transparency. This is the nature of the beast.

See also: The Globalization of Risk Management  

If you have provided insurance services to the art community for a long enough time, you will receive what is loosely referred to as a “Friday phone call.” These are the time-pressured, high-valued, too-good-to-be-true risks that absolutely, positively have to be placed by the end of the week. This is a more practical example of something that an insurance broker should be aware of as something that can affect their day-to-day life. For example, who could forget the Caravaggio in the crate that could not move until it was insured? Or the ever popular Michelangelo that came with tons of gold star stickers on the non-USPAP-compliant appraisal.

With every incoming risk, regardless of demanding time constraints, there is the need to review provided information and follow a process. It is important for brokers to take their time to examine the integrity of the information to uncover anything suspect in the submission. Some guidelines to consider when it comes to risk and art fraud related to fine art insurance submissions, include:

  • Respond logically and practically in an unemotional manner to “pressure placements”
  • Require proof that the artwork exists
  • Require proof that the artwork is authentic
  • Require proof of the value of the artwork from a credible source
  • Follow required compliance rules related to disclosure of the named insured
  • Review the credentials of the experts involved in the process as well as the credibility of the parties insured

See also: Natural Disasters and Risk Management  

Do not be dazzled or blinded by the majesty of the incoming opportunity. Our role as professionals is to pre-qualify risks for the underwriting insurance company partners with which we work. Our role as brokers is to represent the interests of an insured, and the careful selection of those parties is integral to the success of your firm.

This article is provided for general informational purposes only and is not intended to provide individualized business, risk management or legal advice

Risk Exposed to Your Art Business

From the day a business opens its doors, it is exposed to a variety of risks. Owning an art business is no different. The first thing any owner should do is make sure to have sufficient insurance in place to provide financial protection. For those invested in their art inventory or art-related risk exposure, it is important to consider the risk factors, including the financial risk exposed to your business as a whole. Good insurance programs are created by brokers who interview their clients and tailor the insurance policies to their needs. Remember, communication is key. Below is a list of some of the possible coverages business owners may need to help protect their art and business.

1) Building Insurance

If you own a building, coverage should be for the standard “all risk” perils on a replacement cost basis (no deduction for depreciation). Check the co-insurance clause to be sure you are carrying the proper amount of insurance. If possible, the “agreed amount” endorsement should be attached, which eliminates any possible co-insurance penalty at the time of a loss. Deductibles are available to lower premiums. Building insurance usually excludes boilers, machinery, air conditioning equipment and outdoor swimming pools. Boiler insurance can be purchased separately. Flood and earthquake are normal exclusions in most property policies, but these perils can sometimes be insured – usually under separate policies.

2) Contents Insurance

On a standard “all risk” basis to business equipment, drapes, leasehold improvements, equipment (your telephone system if you own it), etc., coverage is usually written on an actual cash value basis. Ask about replacement cost, and check the co-insurance clause to be certain you are carrying the proper amount of insurance. Coverage may be limited to the premises named in the policy, and generally, office contents insurance is not designed to cover personal property of partners and employees (coats, wallets, money, jewelry, etc.).

3) Papers and Records Replacement Insurance

Standard “all risk” coverage provides for reimbursement of the cost to reproduce books of account and other business records.

4) Library Insurance

Standard “all risk” insurance covers the cost of reproducing or replacing books and manuscripts. Those items that cannot be reproduced or replaced should be reviewed to add to your fine art insurance policy.

5) Computer Insurance

A special computer policy is available to insure the hardware, software and extra expenses, which covers the additional cost to continue operations following an insured loss.

6) Rental Value

If you own a building and rent a part or all of it to others, you can insure for the rent you lose while the building is untenantable because of an insured loss. Check the co-insurance clause on rent insurance to be certain you are carrying the proper amount.

7) Leasehold Interest Insurance

If you lease your office premises and such lease agreement has a cancellation clause in the event of a catastrophic fire, you would find it necessary to lease other premises at potentially higher rental cost per month. Leasehold interest insurance can be purchased to protect you against the difference in your rental cost—up to the time your previous lease would have normally terminated.

8) Extra Expense Insurance

This provides reimbursement of extra expenses incurred to keep your business going as fully as possible after an insured loss has occurred. Some forms of this insurance are written with a monthly time limitation.

9) Plate Glass Insurance

If you own your building, you can elect to insure against plate glass breakage. If you do not own the building, your lease agreement may require you to carry plate glass insurance (if there is a plate glass exposure). The cost to re-letter glass can also be insured.

See also: Future of Insurance: Risk Pools of One  

10) All Risk Floaters

Coverage is available to cover camera equipment and valuable works of art in your offices, and camera equipment, computer equipment and similar property you take away from your office premises.

11) Account Receivable Insurance

If your records of accounts receivable were destroyed, you would have no record of outstanding accounts on which to collect monies due to you. Accounts receivable insurance would reimburse you for these outstanding accounts.

12) Business Interruption Insurance

For loss of earnings, insurance is available to reimburse you for the profits you would lose while your business is closed as a result of an insured loss. The insurance can be arranged to include reimbursement for payroll and other continuing expenses.

13) Blanket Bond

Blanket bonding is available to cover all employees and partners. The Employee Retirement Income Security Act of 1974 requires that trustees of your pension plan be bonded.

14) Money and Securities

The basic contents insurance limits or excludes coverage on money and securities. Specific protection is available to cover both on and off your premises, for example, a messenger going to the bank. Underwriters would be interested to know if you have a safe (type and model). Also, let the a broker know how much you usually have on hand in cash and how much in checks— this can make a difference in the premium.

15) Depositor’s Forgery Coverage

Banks are responsible for any forged instruments they accept. However, their insurance is usually purchased with a large deductible. Depositor’s forgery offers protection to retain the goodwill of your banking connections and to avoid discussions with the bank in the event of a loss. It covers loss resulting from forgery of checks and other documents issued by your firm.

16) Comprehensive General Liability

This is for protection against third-party bodily injury and property damage claims related to your premises and operations necessary and incidental thereto. Employees should be included as additional insured; if you lease, the lease agreement may also require the landlord to be named.

17) Medical Payments Insurance

Medical payments insurance is available in connection with comprehensive general liability to provide reimbursement of medical expenses for a third party injury on your premises regardless of your legal liability. For instance, a client trips over his own feet, falls and cuts his hand. While not legally liable, you may want to offer to pay his doctor bills. Medical payments would cover this exposure.

18) Professional Liability

This provides coverage for direct pecuniary loss and expense arising from claims for alleged neglect, error or omission in the performance of services in a professional capacity. Policies usually carry a mandatory deductible clause.

19) Foreign Liability

It is important to note that most liability insurance policies are limited to claims within the U.S. and Canada. If you have operations overseas, your liability insurance should be extended to cover worldwide. Each country has specific insurance requirements. You should check for insurance laws that are local in your business operation.

20) Products Liability

If you are involved in the selling, distribution, serving or give-away of any type of product, products liability should be purchased for protection against product claims.

21) Personal Injury Liability

This is important protection against claims involving false arrest, detention, malicious prosecution, libel, slander or defamation of character.

22) Fire Legal Liability

If you do not own the building you occupy, the owners or building management could hold you legally liable in the event of fire damage to the building premises caused by your negligence.

23) Contractual Liability

Any contracts you sign should be reviewed by your insurance broker to review and determine if liability assumed by contract is acceptable. Liability assumed by contract is not automatically also assumed by that party’s insurance carrier. Discussion with your insurance broker may be required as well as amendment to your insurance policy.

24) Publisher’s Liability

This coverage indemnifies you against loss through libel or the infringement of rights, pertaining to loss of privacy, plagiarism, piracy or copyright infringement.

25) Non-owned Auto Liability

Employees or other persons may use their own autos for your business or rent autos in your name for business trips. If a person is involved in an accident, the injured party may name your business in a suit. This insurance would protect the business. As per your state requirements, individuals should carry his or her own personal automobile insurance for coverage as an operator. Most standard non-ownership forms exclude coverage for a partnership in respect to the individual partner using his or her auto for business purposes, but this exclusion can be deleted for an additional premium.

26) Host Liquor Liability

This coverage protects your business against claims based on serving liquor. For example, an intoxicated guest could be involved in an auto accident after leaving your premises, resulting in a claim against the business. Host Liquor Liability should be assumed by your caterer or the party that is selling alcohol (in addition to having the appropriate licensing as required in your jurisdiction).

27) Employee Benefits Liability

This is coverage against claims in regard to handling employee benefits funds.

28) Umbrella Liability

This provides blanket protection over and above your primary liability program. It also covers unusual hazards that do not come under primary policies such as property of others in your care, custody or control or occasional overseas exposure.

29) Workers’ Compensation

This is mandatory coverage for employees. Be certain that the policy includes all states in which your business has employees, and that the classifications on the policy apply to your operations.

30) Disability Benefits Insurance

This is third-party coverage, statutory in some states, to provide coverage for employees hurt off the job.

See also: Is This the Largest Undisclosed Risk?  

31) Accident Insurance

Coverage can be arranged in various ways to meet the requirements of your business, either to cover business travel only or 24-hour pleasure and business protection.

32) Key Man Insurance

This coverage reimburses the business for financial loss resulting from the death of a key person in the firm.

33) Partnership Insurance

If your business is a partnership, this insurance provides cash to carry out a buy-or-sell agreement in the event of death of a partner.

34) Kidnap/Ransom Coverage

Kidnap of executives (or members of their families) and payment of ransom demands is a growing concern. This insurance covers reimbursement of ransom payments and related losses and expenses.

This article is provided for general informational purposes only and is not intended to provide individualized business, risk management or legal advice. You should discuss your individual circumstances thoroughly with your legal and other advisers before taking any action with regard to the subject matter of this article. Only the relevant insurance policy provides actual terms, coverages, amounts, conditions and exclusions for an insured.

Breakthroughs in Managing (and Insuring) Tangible Assets

In recent years, high-net-worth families have increasingly turned to tangible assets for more than their aesthetic values. A 2012 Barclays report found that high-net-worth individuals in the U.S. hold an average of 9% of their wealth in tangible assets. A 2011 ACE Private Risk Services study of high-net-worth households found that 74% of respondents, all with more than $5 million in investable assets, cited investment value as a reason to purchase rare art or wine, valuable jewelry, sports memorabilia or classic cars. Two-thirds said the potential for appreciation in value was important in their purchase decision.

As values of many categories of tangible assets have escalated, these assets increasingly serve to diversify investment portfolios during periods of volatile market gyrations. In the ACE study, more than half of the respondents reported that the investment diversification value of their tangible assets has become more important to them since 2008.

“Investors are increasingly looking to hard assets, such as valuable art, antiques or fine watches and wine collections, because of the perceived ability of these assets to hold value during market fluctuations,” says Tom Livergood, chief executive officer and founder of The Family Wealth Alliance, a Chicago-based family wealth research and consulting firm. “Across the industry, we’ve seen investors rush to safety and stay there.”

Blind spot

Even as tangible assets gain recognition as a new asset class, high-net-worth individuals rarely bring to their passions for art, wine or jewels the same rigor they have when making financial investments or business decisions. In ACE’s 2011 study, despite the growing number of households reporting greater importance of tangible assets to their investment portfolios, nearly 40% of those surveyed did not have all of their precious items insured against property loss with a valuables policy. Additionally, one in three reported that they were not updating the market value of these assets at least once every three years, and a full 15% of respondents had no formal documentation of their non-financial assets.

“It’s amazing how often some advisers, especially those with sophisticated knowledge of financial markets, suddenly turn unsophisticated when it comes to non-financial assets, notably art,” says Ronald Varney, owner and president of New York-based Ronald Varney Fine Art Advisors.

To Evan Jehle, a New York-based principal at Rothstein Kass, a professional services firm with a significant family practice, wealthy families typically pay 
far less attention to their personal property than to their business affairs. “Our clients would never let something fall through the cracks in their professional lives, but many families have never thought of their tangible assets in this way before.”

Thomas Handler, partner and chairman of the Family Office Practice Group at Handler Thayer, a Chicago-based law firm recognized as a leader in serving family offices, private businesses and high-net-worth individuals, says his office often advises clients who don't have a business plan for their tangible assets. “It is incredibly important for wealthy households to understand how to hold, report, title and insure their non-financial assets in estate planning.”

Challenges of managing tangible assets

Today’s investors have the opportunity 
to reap significant benefits – financially
 and aesthetically – by investing in
tangible assets, but these investments 
pose risks and challenges different from investment
 in traditional assets. Wealthy households and their advisers may cheer the rebounding market for art and other valuables, take comfort that they have diversified their investments and look forward to potential price appreciation in the future. However, those cheers could be premature if owners of non-financial assets fail to understand and properly address the critical issues facing these assets. Those issues include: value and authenticity, documentation, estate and tax planning 
as well as insurance; additionally, owners of tangible assets should embrace the new technology tools that dramatically improve the management of tangible wealth.

Value and Authenticity

The market value of tangible assets can change, sometimes rapidly. In July 2013, a 1954 Mercedes-Benz sold for $30 million, the highest price ever paid for a car at an auction, shattering the previous record of $16.4 million set in 2011. Global sales of wine, diamonds and precious gems have also been increasing, often to record levels. In December 2012, Sotheby’s recorded its highest one-day jewelry sales in the Americas, selling $64.8 million of high-carat diamonds and precious gems. The Live-ex Fine Wine 50 Index reached 106 in April 2013, up 5.3% in the first half of 2013. Over a 10-year period, prices for gold more than quadrupled, only to retreat more recently.

The market for fine art is especially robust. In 2012, Christie’s auction sales totaled more than $6 billion, a 10% increase from 2011. In May 2013, Christie’s reported $640 million of sales in its Post War and Contemporary department in one week, setting an auction record for any individual category.

Dramatic shifts in the market present challenges as well 
as opportunities for investors in tangible assets. “Today’s market is both global and complex,” Varney says. “Modern and contemporary art have made all the headlines, for that is where the greatest demand is today; but by next year the market could be turned upside-down, as happened in the fall of 2008 amid the global financial crisis.

Alan Fausel, vice president and director of the Fine Art Department in the New York office of Bonhams, a London-based auction house, cites the rapidly changing market as a serious issue for investors. “There is a huge risk and reward in today’s market because so many investors are entering uncharted territory. Today’s contemporary market has seen so much volatility and so much uncertainty with newly famous artists, that investors are especially challenged to understand the true value of the works they own.”

Protecting investments in art, jewelry, antiques or wine begins with an appraisal. Smart investors should perform their due diligence to select appraisers with specific expertise in the genre of their assets. “An accurate appraisal is the foundation for every decision 
an investor will make regarding his or her tangible assets,” says Anita Heriot, Philadelphia-based president of Pall Mall Advisors, a U.S. and U.K. art appraisal firm. Before donating, selling, insuring or placing valuable items in a succession plan, investors must know how much everything is worth. “Wealthy individuals must understand that the values of their tangible assets have changed, and these values will continue to change over time,” Heriot says. “Without understanding the value of their property, people cannot even begin to make correct decisions.”

Heriot observes that wealthy individuals sometimes drastically undervalue their tangible assets. She recalls one family that was tracking assets based on appraisals from 1983, with nearly 30 years between consultations. The collection was originally valued at about $2 million, but, after an updated appraisal, the
 fair market value was nearly $100 million. “There were paintings of incredible value hanging on only one nail, including a Rothko with an insurance value of at least $70 million. Had this family known what their property was worth, they certainly would have taken better care
 of it.” An appraisal from a qualified professional can
 also minimize other risks, as well as provide guidance regarding potential fakes and forgeries. In addition, an appraisal can identify other issues that could affect the value of the item or the right to ownership. These include the sale of items made from protected species, protected antiquities or stolen works.

Documentation

All too often, high-net-worth individuals and families find the process of documenting, tracking and managing
the contents of their home, including fine furniture and other valuable items, to be onerous. Proper documentation of personal property typically involves photo or video records, storage of purchase receipts and, in the case of highly valuable items, expert appraisals, proofs of title and provenance and records of any restoration work. Moreover, values need to be regularly updated, sometimes on both a depreciated-value and replacement-cost basis.

“Families rarely keep accurate records of their tangible assets because, quite frankly, it can be a lot of work,” says Jarrett Bostwick, wealth transfer and estate planning specialist at Handler Thayer, the Chicago law firm.

“If someone buys two pieces of art, a piece of jewelry, two watches and a diamond pendant for his wife, then they have to sit down and put a schedule together, contact the insurance company and have them come in and have them ask you a whole bunch of questions, which is kind of a pain. Rarely do our clients partake in this kind of rigor.”

If documentation is done at all, it tends to be completed inadequately and infrequently. ACE Private Risk Services and Trōv have been collaborating on a program in which specialists have examined the contents of more than 3,000 homes of high-net-worth families. In this Home Contents Valuation program, ACE risk consultants used Trōv technology to provide the industry’s first customized estimates of the value of a home’s contents at policy inception. Nearly 50% of the homes evaluated did not have enough insurance to cover their contents, and the average amount of underinsurance exceeded $415,000 per home. Condominium homes were particularly at risk. Nearly 80% had inadequate contents coverage. Among homes warranting an increase in contents coverage, those with a structural value of $2 million to $3 million had an average shortfall of $417,000 in contents coverage; those with a structural value of $5 million to $7.5 million had an average shortfall of $852,000. Furthermore, many valuable items were only protected by general contents coverage in the homeowner policy, when they should have been listed as scheduled items in a valuables policy.

The lack of proper documentation of a family’s tangible assets can lead to wide-ranging problems. “You have to know what you have in order to be worried about it, and to take steps to avoid losing it,” says Joy Berus, attorney at Berus Law Group in Newport Beach, Calif., a specialist in tangible asset protection. “If a family doesn’t have an updated inventory of their valuable possessions, they leave themselves vulnerable to taxes that could have been planned for and reduced, discrepancies, risk of serious financial loss and the inability to pass down their assets to the next generation with a step up in basis. Proper documentation of a household’s tangible assets is the first step in identifying a family’s tangible wealth, and can make the difference between security and paralysis.”

The magnitude of the potential issue is evident in one statistic: Over the next
 30 years, as much as $27 trillion of 
family wealth will be transferred from 
Baby Boomers to their children and grandchildren. That inheritance will include a great deal of tangible assets that will need to be documented, appraised, accounted for and protected.

Wealth managers often encounter situations in which a client dies and the family or trustee does not know where all of the valuables are. “These issues don’t usually come up until a client passes and you have to collect all of the assets and figure out what’s there,” says one wealth manager who works with high-net-worth clients. “Tangible assets aren’t addressed enough in the typical conversations between wealth managers and their clients.”

Handler, the attorney, points to a noted photographer who was living in a retirement home. 
He kept with him a large collection of negatives of images of leaders, celebrities and historical events.
The photographer suffered from dementia, and over
 the years most of the collection slowly disappeared. “Unfortunately, the family did not have a record of everything and didn’t know who took the photographs,” Handler recalls. “We found some of the items on the black market on websites. But the vast majority is never going to see the light of day.”

Berus recalls working with professional athletes and asking if their wealth advisers asked them if they possessed sports memorabilia. “Every one of them said the same thing, ‘Nobody has ever asked before.’ One retired football player talked about how he lost the majority of his lifetime collection because it had been in a fire, and it wasn’t insured. He couldn’t prove what he had and had a major loss because of it.”

Berus adds, “When people don’t know what they have, they can lose money and be taken advantage of by people who do know what they have. You don’t want to lose the value of what you own or be taken advantage of. You also don’t want to cause tax problems for yourself or pay unnecessary taxes. When you know what you have and know what it is really worth, you can make better decisions.”

Loss Prevention

By definition, tangible assets are subject to risks of physical damage, theft and the ravages of time. Yet experts say that high-net-worth families often neglect
 to take steps to protect their art, jewelry, wine and other valuables from these threats. One ACE study, for example, found that 40% of wealthy individuals surveyed failed to take advantage of the services of a risk consultant who could help them reduce the risk of damage and theft.

Collectors do not always realize the risk-prevention measures available to them to help guard against, 
and minimize, exposures, says Heather Becker,
 chief executive officer of the Conservation Center, a Chicago-based provider of conservation services for fine art, textiles, photography and sculptures. “No one wants to think a significant loss will happen to them.”

Many families display or store their precious possessions in ways that increase the risk of loss. For instance, they hang artwork above an active fireplace, where the hot, dry air and soot accelerates deterioration. They neglect to place a historical artifact, such as a letter written by a famous figure, in an archival box protected by anti-ultraviolet protective glass, exposing the artifact to dangerous rays and fumes.
 Or they store a valuable stamp collection in a closet beneath a bathroom. If the tub overflows or the toilet develops a leak, the stamps could be ruined. “So many people forget that these assets – art, wine, gems – are very fragile,” Varney says. “Valuable assets can go from $1 million in value to $0 in the blink of an eye.” Investors who fail to properly address these threats remain vulnerable to severe financial loss.

Even items made of strong, durable materials can be
ar risk. Becker recalls the story of an ancient metal sculpture, which its owner stored in a warehouse for several years while not on display. While the owner made sure the sculpture was stored in a protective crate, the crate was stored on its side, instead of standing up. “The sculpture was severely warped and sustained considerable damage,” Becker says. “There is a cumulative effect to these risks that individuals must account for.”

Insurance

Given the increasing value of rare art, precious gems and fine wine, and the array of physical threats and other financial exposures confronting these pieces, proper insurance represents a critical part of a complete wealth-protection plan. Often the best place for families and their wealth advisers to start addressing this need is with an insurance broker or independent agent who specializes in serving families with emerging or established wealth. These insurance advisers, who can be recognized by their access to specialty insurance carriers, can usually suggest and coordinate services from a variety of experts.

While investors of tangible assets may go to great lengths to acquire the items they desire, they frequently fail to adequately protect them. In a 2012 ACE survey, fully 86% of insurance agents said the families who insure their homes and possessions with mass-market insurance companies likely carry too little insurance for their treasured items. One in three wealthy families was updating the market value of their collections every three years.

“Waiting three years or more mean their valuations will be wildly out of date,” says Fausel of Bonhams.

ACE Private Risk Services and Trōv analyzed 94 valuables schedules to compare stated replacement values with current market values. For the 48 schedules of fine art assets, comprising 1,722 objects, 665 objects were potentially underinsured. For the 46 jewelry schedules, one in four objects was potentially underinsured. Moreover, 32% of all the analyzed items had descriptions that were too vague or incomplete to allow for an accurate valuation. If a loss were to occur, this could lead to a dispute.

Emerging technology

For individuals and families with substantial tangible assets, new technology tools exist to make tracking, analyzing and sharing information about their assets significantly easier and more efficient. Pall Mall’s Heriot sees high demand for these tools: “As tangible assets become more valuable and wealthy families become more invested in their personal property, we see clients begging for a better understanding of what they own and greater knowledge of what it’s all worth.” The goal for wealth advisers and their clients should be to make tracking and analyzing information about personal property regular, everyday actions rather than infrequent behaviors.

Progress is promising. ACE Private Risk Services offers clients access to its Home Contents Valuation service, providing guidance regarding general contents coverage at policy inception–at the moment, coverage for personal property, a home’s contents, is typically assigned based on a percentage of the home’s structural value or it is a guess. Trōv has developed technology, partnerships and applications to tame the unruly mass of data about every tangible asset in its members’ lives. The core of the
 Trōv platform is a private, online digital locker where the information about property and possessions is collected and securely managed (called a Trōv, like treasure trove). Because most of Trōv users’ important personal property is located in their private spaces, Trōv is training appraisers and insurance risk managers to use its Trōv Collect application when they are in their clients’ homes. With the acquired information, a Trōv is activated – and with it a complete knowledge of what each family owns, where it’s located and what it’s worth. Acquisitions can be automatically added to a personal Trōv at retail point-of-sale, via electronic receipts and through a mobile application. The Trōv Mobile app enables members to snap a picture of any acquired item, add any support information, such as a receipt, package art, bar-code or QR-code, and send it to their Trōv in real time. As purchases are added, and as values change within the Trōv, the member can choose to have his or her advisers automatically notified to ensure the items are always accounted for and adequately protected.

Vision of the future

The future of wealth management encompasses an understanding of a client’s tangible assets as well as financial assets, completing the picture of total 
net worth. By using a continually updated inventory
 of personal property, families can manage risk on a real-time basis, applying effective loss-prevention techniques, securing the proper amounts of high-quality insurance coverage and anticipating tax and estate-planning issues. Insurance companies such as ACE will be able to recommend safety measures and introduce coverage rates that are increasingly fair, accurate and economical. Private bankers, estate planning attorneys and family offices will develop deeper relationships with their clients and referral networks. Wealth advisers will be able to expand the perspective they offer to clients and engage other appropriate professionals, such as insurance brokers, on a more timely and routine basis. Advisers who provide clients with a full-circle view of their assets will be well-positioned to gain a competitive advantage.

Cloud services, such as those provided by Trōv, will even enhance enjoyment of prized possessions. With a few simple strokes on a mobile device, an owner will be able to find like-minded collectors. Buying, selling and sharing will become a dynamic experience, and, because it will be easy to track the history of an object, every possession with have a story built into it. 

Conclusion

Demand for tangible assets of art, wine, jewelry and other collectibles is on the upswing, and auction sales across the globe continue to skyrocket. As these tangible assets are increasingly recognized as means of investment diversification, wealth advisers are challenged to provide a full-circle, comprehensive view of a client’s entire portfolio. Fortunately, new technology tools are meeting these ever-expanding demands. Mobile and cloud technology services improve the tracking, management and valuation of tangible assets, providing families and their advisers with greater awareness. Furthermore, these tools enable families to secure comprehensive insurance coverage and loss-prevention services, assess investment risk across both financial and tangible assets and more effectively anticipate tax and estate-planning issues. In today’s digital age, an analysis of any high-net-worth individual’s assets must include these tangible assets to complete the picture of total wealth management.

For the white paper on which this article was based, click here