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UBS: Help HNW Clients Protect Their Collections

By Alex Padalka November 13, 2017

Financial advisors may want to address their clients’ hobbies -- namely, collecting items such as fine art, cars and wine. High net worth collectors on average have about 10% of their wealth concentrated in objects of their passion, but many have not taken precautions to protect their collections or even appraised them, according to a new report from UBS Wealth Management Americas.

Fifty-one percent of collectors haven’t appraised their collections while 44% don’t have their collections insured, according to the survey of 2,475 investors with at least $1 million in investable assets conducted in September. In fact, 57% of wealthy collectors say they’re driven by passion, not profit — and 22% say they spend more on collecting than saving for retirement, according to UBS.

In addition, four out of five say they would prefer to sell off assets in their portfolio in case of an emergency rather than part with a piece from their collection, the survey found.

“There is an opportunity for investors to manage collections far more effectively, by assessing their true worth, and ensuring that they are protected,” Paula Polito, client strategy officer at UBS Wealth Management Americas, says in a press release accompanying the survey.

The choice of what to collect varies, but 49% of wealthy collectors go for gold and precious metals, 36% collect fine art, 26% opt for precious jewelry, 22% still collect stamps, 16% like antiques, 15% collect cars and 12% stock up on wine, UBS found.

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But while these collections represent substantial portions of their net worth, collectors shouldn’t assume their heirs care about them at all. While 81% of investors intend to pass on their collections instead of selling them, 65% of heirs have zero interest in holding on to them — and 26% of inheritors have already sold or plan to sell those collections, according to the survey.