Now is the time to develop a pro-active state of mind about your collection

September 14th 2020

There are big changes impacting fine art, antiques and collectibles markets right now, and it’s time to ensure you are up-to-date with the latest developments, and how they may impact your collection. Values change and it’s important to make sure that valuations are up-to-date and you have the right insurance, protection and security in place as we move through the next few years.

A new political and legislative landscape has begun

We are reaching a watershed in the sometimes secretive, highly specialised art and collectibles markets in Britain, Europe and throughout the world. Post-Brexit tax implications will soon be felt in auction houses throughout the UK and Europe, and we can expect some countries to see an increase in sales prices as a result, while other markets return softer sales in the next couple of years.

Legislation is also set to impact the art market. The Fifth Anti-Money Laundering Directive (5AMLD) became UK law in January 2020. Passed as legislation regardless of Brexit, the Directive requires art and antique dealers to comply for the first time with measures designed to combat financial crime and terrorist funding.

In May a last ditched attempt by art dealers to overturn Britain’s Ivory Act failed at the Court of Appeal. Introduced in December 2018, the Act is among the strictest in the world and prohibits the trade of a large number of art and antique objects containing ivory that were previously being sold legitimately.

New technology is here… are you up-to-date?

Advances in technology are making the market more accessible and transparent and are impacting on how collectors educate themselves,
purchase, protect, organise and sell collectible objects.

 

One of the positive technological impacts that all collectors should consider learning more about is the protection of their artworks and collections in online inventory systems. Blockchain and online inventory systems help to organise, record and provide authenticity, condition reports and provenance for collections. Theft, extreme weather events or natural disasters can devastate a collection or your valuables – vital information reports and provenance records can easily be stored online and are quickly accessible in  case disaster strikes or you need to make an insurance claim.

Millennials are the fastest growing group of art collectors and they’re impacting the market in significant ways: they are three times more likely to sell an artwork they’ve collected than baby boomers, and are looking for a more liquid art market. They prioritise digital platforms to buy and sell and look for specific items on a global basis.

 

New markets, new generations: change is the only thing that stays the same

It’s not an exaggeration to suggest many collectors begin their collections because they discover something which stirs them deeply, fuels a belief in perfection, is an object they wish to possess, admire and care for, or perhaps, even to participate in. This state of mind is almost opposite to the Greek philosopher Heraclitus’ claim that ‘change is the only constant in life’; and yet, it’s a state of mind that will not protect and grow the value of a collection alone. You need an ‘investor’s brain’ combined with a ‘collector’s eye’ to build and protect a financially successful collection.

The world and the markets will always change. Successful collectors understand the need to educate themselves over and over again. They build relationships over many years with professional and impartial experts and auction houses of integrity and of relevance to their collections. They seek out the best advice, stay abreast of market trends and are aware of wider changes that may impact on their collections.

The most successful collectors develop knowledge and understanding year on year and update the records, valuations, security and protection of the value of their collections on a regular basis. Whether you are starting out or dealing with an estate left to you in trust; whether you collect pink or blue diamonds, antique gems and watches, Prada handbags, Modern British artists or fine whisky – the value of your investments will continue to change as the world changes. The perfection inherent in your collection may be timeless, but ensure you keep its value front of mind – keep up with change, build your knowledge and expert relationships, and make sure your valuations are up-to-date.

Fine wine is still a reliable and consistent investment, but the importance of receiving excellent and impartial advice and appraisal is crucial, given the number of unscrupulous wine merchants and investment houses out there. Financial maturity is linked to drinking maturity (8-10 years) and provenance of correct storage is vital. Regular appraisal and valuation by independent experts on storage, value, condition and the market will help you insure your fine wine collection adequately and give you peace of mind.

The rare whisky market is booming, but also polarizing. Quality and rarity are still the most desirable qualities of this simple market with easy and affordable entrance and exit routes. Capital appreciation is always the aim (the only dividends being the opening of an occasional bottle).

Please talk to your usual Lycetts account executive for more advice and information on your contents insurance.

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Christopher Cox 3

Christopher Cox

Director

Tom Forster 3

Tom Forster

Divisional Director

Olivia Curl

Account Executive

Clare Ross 3

Clare Ross

Account Handler

Michael Ferguson

Independent Financial Adviser