Navigating the Risks and Rewards of High-Value Collectibles
Navigating the Risks and Rewards of High-Value Collectibles
"Death and taxes are the only certainties in life, but there are also uncertainties and risks – how do we get to know what those unknowns might be?" With this thought-provoking statement, Fraser Hiddelston, Head of Governance and Regulatory Compliance Advisory, opened an insightful discussion on the risks, valuation, and strategies for high-value non-financial assets.
Hosted by BDO, the event featured industry experts Crispian Riley-Smith (Arts Advisory Group) and Tim Corfield (Corfield Morris) who explored the complexities of managing, acquiring, and selling assets such as art, antiques, and collectibles.
Understanding Risk in Collectibles
While financial assets are subject to well-known risk management strategies, tangible high-value assets do not always receive the same attention. The discussion highlighted the importance of due diligence, legal considerations, and market awareness when dealing with luxury collectibles.
“If you don’t check the provenance of an artwork, you could be buying a very expensive problem,” warned Riley-Smith, underlining the crucial role of authentication in avoiding forgeries or stolen items.
Corfield echoed this sentiment, adding that investing in collectibles is about more than just passion—it requires strategic decision-making to ensure long-term value retention.
The Auction Paradox: Bargains or Big Risks?
One of the key takeaways from the discussion was the unpredictability of auction prices. Many assume that auctions are a place for bargains, but as Corfield pointed out, “Auction estimates are notoriously unreliable. The uninitiated buyer thinks they can be guided by them, but they can’t.”
The panellists discussed strategies for navigating the auction process, including working with advisors to assess an item's true value, avoiding overpaying due to bidding wars, and understanding the impact of buyers' premiums and hidden fees.
Market Trends: Boom, Bust, and Tokenisation
The discussion also touched on recent trends, including the growing role of asset tokenisation – fractional ownership of high-value works of art – as well as the rise and fall of art market bubbles.
“An artist can be the ‘next big thing’ one year and completely forgotten the next,” Corfield noted, referencing past market trends where hyped artists or NFT-based assets saw dramatic fluctuations in value.
Selling Smart: Timing and Strategy
The panel emphasised that timing and strategy are crucial for sellers. Assets may sell for dramatically different prices depending on where and how they are sold.
“A sale isn’t just about finding a buyer – it’s about finding the right buyer in the right place at the right time,” Riley-Smith explained. The panellists highlighted the importance of choosing the right sales channel, whether through private treaty sales, auctions, or direct collector transactions.
Final Takeaways
The event concluded with a Q&A session, where attendees explored topics ranging from asset insurance and trust structures to the evolving role of financial institutions in managing luxury assets.
The key message? Whether buying or selling, expert advice is essential. As Corfield summed up, “When it comes to art and antiques, the difference between a treasure and a trap is often just good advice.”
BDO is committed to helping clients navigate the risks and opportunities of high-value assets. To learn more about risk advisory services, please contact our team at advisory@bdo.gg.
Hosted by BDO, the event featured industry experts Crispian Riley-Smith (Arts Advisory Group) and Tim Corfield (Corfield Morris) who explored the complexities of managing, acquiring, and selling assets such as art, antiques, and collectibles.
Understanding Risk in Collectibles
While financial assets are subject to well-known risk management strategies, tangible high-value assets do not always receive the same attention. The discussion highlighted the importance of due diligence, legal considerations, and market awareness when dealing with luxury collectibles.
“If you don’t check the provenance of an artwork, you could be buying a very expensive problem,” warned Riley-Smith, underlining the crucial role of authentication in avoiding forgeries or stolen items.
Corfield echoed this sentiment, adding that investing in collectibles is about more than just passion—it requires strategic decision-making to ensure long-term value retention.
The Auction Paradox: Bargains or Big Risks?
One of the key takeaways from the discussion was the unpredictability of auction prices. Many assume that auctions are a place for bargains, but as Corfield pointed out, “Auction estimates are notoriously unreliable. The uninitiated buyer thinks they can be guided by them, but they can’t.”
The panellists discussed strategies for navigating the auction process, including working with advisors to assess an item's true value, avoiding overpaying due to bidding wars, and understanding the impact of buyers' premiums and hidden fees.
Market Trends: Boom, Bust, and Tokenisation
The discussion also touched on recent trends, including the growing role of asset tokenisation – fractional ownership of high-value works of art – as well as the rise and fall of art market bubbles.
“An artist can be the ‘next big thing’ one year and completely forgotten the next,” Corfield noted, referencing past market trends where hyped artists or NFT-based assets saw dramatic fluctuations in value.
Selling Smart: Timing and Strategy
The panel emphasised that timing and strategy are crucial for sellers. Assets may sell for dramatically different prices depending on where and how they are sold.
“A sale isn’t just about finding a buyer – it’s about finding the right buyer in the right place at the right time,” Riley-Smith explained. The panellists highlighted the importance of choosing the right sales channel, whether through private treaty sales, auctions, or direct collector transactions.
Final Takeaways
The event concluded with a Q&A session, where attendees explored topics ranging from asset insurance and trust structures to the evolving role of financial institutions in managing luxury assets.
The key message? Whether buying or selling, expert advice is essential. As Corfield summed up, “When it comes to art and antiques, the difference between a treasure and a trap is often just good advice.”
BDO is committed to helping clients navigate the risks and opportunities of high-value assets. To learn more about risk advisory services, please contact our team at advisory@bdo.gg.