Insights

Art, Wine, and Collectibles: What to Consider When Building a Luxury Collection

by Sequoia Financial Group

September 12, 2025

A luxury collectible is more than a possession; it’s an intersection of artistry, rarity, and personal passion. From Swiss watches and iconic Birkin handbags to fine art, vintage wines, classic cars, and even first-edition Pokémon cards, high-end collectibles can hold emotional and financial value.

If you’re considering building a luxury collection as part of your financial portfolio, it’s essential to understand some of the associated implications. Among them:

Market Fluctuations: Values can rise sharply but may just as easily fall, as seen in the collector car market. During the COVID-19 pandemic, the collector car market saw a surge in demand. As a result, many models’ values shot up aggressively.^1-4The Hagerty Market Rating (a measure of market momentum, heat, and valuation for collector cars) dropped from very high levels during the boom to levels closer to those seen in 2019/2020. That suggests the market has cooled, become more “rational,” and settled.⁵
Authenticity Risks: Fakes are common. Professional verification through a trusted appraiser, knowledgeable gallery, or specialist advisor is crucial and can be costly.
Auction Premiums: Auction companies may charge a premium for their services, sometimes 20–30% of the winning bid. ^6,7
Storage: Climate-controlled storage, security, and maintenance can be significant expenses.
Estate Planning: Without clear instructions, prized collectibles can become a burden for heirs.

Building a collection demands thoughtful planning, personal engagement, and strategic decision-making. Success is never guaranteed in this illiquid market. That’s why many seasoned collectors focus on investments of passion, pieces they genuinely enjoy that can deliver both personal satisfaction—emotional dividends—and potential long-term appreciation.

Insuring Your Collection

Like any financial planning strategy, risk management is an important component of a luxury collection. Standard homeowner’s policies usually don’t cover collectibles adequately, and specialized insurance is recommended. You can learn more about insuring your high-end collection by reading one of our recent articles.

Maintaining regular valuations to keep your records accurate for insurance and estate purposes will be critical. This includes a detailed inventory with descriptions, purchase data, photos, and identifiers like serial numbers. We also recommend preserving provenance records where applicable and storing all documentation physically and digitally in a secure manner.

Integrating Your Collection into Your Wealth Plan

There’s no question that high-end collectibles can diversify a portfolio, but they carry unique risks. A conversation with your Sequoia advisory team can help align your collection with your broader financial goals, and ensure it is integrated into your wealth management plan. One key question to discuss with your Sequoia team is your primary goal for the collection, as it will bring clarity to the tax implications of the collection. The IRS distinguishes between a hobby and an investment, which affects whether certain expenses are deductible. In addition to tax implications, your collection will require thoughtful inclusion into your estate plan.

We welcome the opportunity to work with you to ensure your investments of passion are thoughtfully managed and integrated into your long-term wealth strategy.

Sources:

Investment advisory services offered by Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

This material is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Diversification cannot assure profit or guarantee against loss. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Sequoia Financial Advisors, LLC makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third-parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials.