Marilisa Rutigliano, founder and chief executive of alternative investment platform The Spirits Club, considers whether collectibles deserve a greater role in conversations around portfolio diversification.
The conversation around alternative investments has changed significantly in recent years.
Private equity, private credit, infrastructure, and other alternatives have become increasingly familiar territory for advisers looking to diversify client portfolios beyond traditional equity and bond markets. Yet one category remains largely absent from that discussion: collectibles.
That is perhaps surprising given Deloitte’s latest Art & Finance Report, which found that wealth managers estimate around 10% of client wealth is already allocated to art and collectibles. Whether acquired through inheritance, personal interest or as a deliberate investment, tangible assets already form part of many affluent clients’ wider wealth picture.
The question, therefore, is not whether advisers will encounter collectibles. Increasingly, they already are. The more pertinent question is whether these assets deserve greater consideration within broader portfolio construction.
A different source of diversification
For generations, some of the world’s wealthiest families understood something that modern investors are now rediscovering: not all value sits inside public markets.
Art, wine, rare spirits, jewellery and watches have long appealed to collectors because they possess qualities that financial assets cannot easily replicate. Scarcity, provenance and cultural significance all play a role in determining value, creating return drivers that differ fundamentally from those influencing equities and bonds.
That distinction has become more relevant in an environment shaped by persistent inflation, geopolitical uncertainty and periods of heightened market correlation. Investors are increasingly looking for sources of diversification that are driven by different economic forces rather than simply different sectors or geographies.
This is not about replacing traditional investments. Rather, it is about recognising that carefully selected tangible assets may have a role to play alongside more conventional alternatives within a diversified portfolio.
Why clients are taking notice
This shift is increasingly reflected in conversations with investors. I have personally observed growing interest from individuals who are not looking to replace their existing portfolios, but to diversify capital they do not expect to need in the short term. The emphasis is typically on patient capital, with investors seeking exposure to tangible assets supported by genuine scarcity and long-term collector demand.
The attraction is understandable. Public markets remain heavily influenced by interest rates, monetary policy, earnings expectations and investor sentiment. Collectibles respond to a different set of factors, including rarity, provenance, condition, vintage quality and global collector demand. Those characteristics mean they can behave differently from traditional financial assets over time.
Rare spirits as a case study
Rare spirits illustrate both the opportunities and the discipline required when considering collectibles.
Certain bottles, particularly those from established distilleries with limited releases, strong provenance and international recognition, have developed active secondary markets supported by specialist auction houses and collectors worldwide. However, as with any asset class, quality varies considerably. Not every bottle should be regarded as investable, and broad assumptions about performance should be avoided.
The same principle applies across collectible markets more generally. Success depends on careful selection, independent valuation, and an understanding of market dynamics rather than enthusiasm for the asset itself.
The adviser’s role
Collectibles are not risk free, nor are they appropriate for every client. Liquidity can vary significantly. Valuations may be less transparent than listed securities, while storage, insurance, authentication, and transaction costs all require careful consideration. Equally, collectibles are generally better suited to investors with longer investment horizons and should not be viewed as substitutes for liquid reserves. These are precisely the areas where advisers can add value.
Rather than viewing collectibles as an outlier, advisers can apply the same rigorous due diligence they would expect of any alternative investment. Questions around liquidity, pricing, custody, market depth, and suitability should all form part of the assessment before any allocation is considered.
Looking beyond traditional alternatives
The growing interest in alternative assets reflects a broader shift in investor thinking. Diversification is no longer simply about adding another fund or another strategy. Increasingly, it is about accessing sources of return that are influenced by genuinely different value drivers.
Collectibles will never be appropriate for every investor, nor should they replace traditional portfolio holdings. However, as client interest grows and tangible assets become a more visible component of private wealth, they merit informed discussion rather than dismissal.
Advisers do not need to become experts in art, wine, or rare spirits. They do, however, need to understand why an increasing number of clients are asking questions about them.
As the alternatives universe continues to evolve, perhaps the next diversification conversation is not about finding another private market strategy, but about recognising the role that carefully selected tangible assets may already be playing within clients’ broader wealth.
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