Announcing ISA's Private Client Services Program

Christine Guernsey, ISA CAPP

In the beginning of my appraisal career, I marketed to the general public. Marketing to such a broad audience was time-consuming, expensive, and not always fruitful. The clients I attracted usually needed an appraisal for a particular function and one time only. After every assignment I would need to begin marketing again for my next assignment.

I soon discovered that developing "clients who had clients" was the most efficient way to build my business. The professional service providers whose clients needed appraisals could and would refer me to many of their clients. This began my appraisal practice's marketing strategy of concentrating on large collections and working solely with the various gate keepers who specialize in the high-net-worth individuals market.

High-net-worth individuals (HNWIs) are considered those whose financial investments are in excess of one million dollars. In 2016, there were over four million of these individuals in the US alone. Their collections of antiques, fine art, decorative arts, and collectibles may comprise a significant part of their assets. Procuring, investing, protecting, and maintaining their collections requires a team of highly-trained professionals who work exclusively with this group to help meet their specialized needs. Developing long-term relationships with museums, curators, art and object shippers and handlers, private dealers and consultants, estate attorneys, lawyers, bankers, insurance companies, and charitable foundations, among others, are excellent sources for repeat referrals. As you work closely and regularly with these professionals, an appraiser learns exactly what they need and expect to best serve their clients.

This July 13 and 14, the International Society of Appraisers will present its inaugural ISA Private Client Services program, "Appraising in the World of High-Net-Worth Individuals," at UBS, Legacy, Plano, TX and as a live stream. This new ISA marketing program will provide appraisers who wish to become involved with this sector with an inside look as to who these private client professionals are, why and when they hire personal property appraisers, and what types of appraisal reports and valuations they require from appraisers to best service their clients. Those who attend this program, either in person or streamed live, will gain valuable information on how to market to this group, which they can universally use in their own markets and practices.

Register for this two-day seminar, "Appraising in the World of High-Net-Worth Individuals" in Plano, Texas or as a live-streamed course

Toro Quieto (Calm Bull), Tom Lea
The Bryan Museum

The opening presentation, "Starting Points: The Collection," features J.P. Bryan, a prolific, lifelong collector of western history, artifacts and art. His eclectic collection of over 70,000 objects led to the creation of the Bryan Museum in Galveston, Texas in 2015. Mr. Bryan will share his personal story of collecting, discuss which private client service providers helped him to develop and maintain his collection, and what factors led him to create a museum to house his vast collection. The Director of the Bryan Museum, Joan Marshall, will join Mr. Bryan in what promises to be a very engaging and informative presentation.

The presentations in this two day seminar will include a close look at which professions work most closely with HNW market. Friday's presentations focus on personal property collections and their procurement and management. Saturday's presentations deal with the business side of maintaining and protecting the future of collections, estates and taxes, loans, investing and charitable giving.

View the full course program

The July 13-14 seminar "Appraising in the World of High-Net-Worth Individuals" is part of a larger marketing program, ISA Private Client Services, which ISA has been developing to help our members learn best practices and promote their services to the HNW sector. Completion of this seminar along with other criteria will allow our interested ISA members to apply to the program and be promoted as an affiliate of the ISA Private Client Services Division. More details on this program will be announced July 13.

This seminar is open to all ISA members. Whether you intend to apply to the ISA Private Client Services program or not, you are still welcome to take this marketing course.

Explore the Legacy West area this summer

I hope I will see you in Plano this July, or tuned into our live stream. In addition to a fantastic learning experience, The Legacy area is a very cool and fun spot to spend a couple of days with plenty of great restaurants, shopping, and entertainment all within close walking distance. The on-site class is limited to 30 participants, so sign up quickly as the seminar is filling up fast!

Can't make the trip to Plano, Texas? You'll still be able to participate in our seminar! Register for the live stream and join us for the course as it happens from the comfort of your home or office.

Christine Guernsey, ISA CAPP, is recent past president of ISA and currently serving on the ISA Board of Directors. She appraises all areas of American paintings, works on paper, sculpture, and outdoor sculpture, specializing in 19th and 20th centuries.

Ask an Instructor: Using Comparables

ISA members are invited to send in their questions on all things appraising and education to ISA's instructors. One of ISA's instructors will share answers on the ISA Now Blog. Please send questions to directorofeducation@isa-appraisers.org.


Question: If I have more than one item in my appraisal that are similar in nature, can I use the same comparables for each of the items?

Answer: The answer is yes, if the comparables are indeed applicable to both items. For example, I have a client who likes to purchase two prints from the same edition for his collection. As such, when I'm appraising the works for fair market value, I include the same comparables for each print when the two are in the same condition. If the prints were not in the same condition, then I would not necessarily use the same comparables for each of the prints. If one had a condition issue, then I would first look for a comparable with a similar condition issue as the best direct comparable. If comparables of damaged prints were unavailable, then I would use the same comparable of one in good condition and then explain my reasoning of why I'm discounting the value of the damaged print.

- Meredith Meuwly, ISA CAPP
Director of Education

The Appraiser, the Umpire, and USPAP

Cathy Peters, ISA CAPP

If you appraise personal property long enough, you will come across an assignment for a damage claim that will require you to choose a mediator, also known as an umpire. It took me 17 years of appraising to come across this situation. When it did develop in my own appraisal practice, it seemed contrary to the conduct requirements in the Ethics Rule of USPAP. I would like to pass on a few thoughts to consider in navigating unfamiliar waters of these type of insurance claim settlements.

Some homeowner's insurance policies contain a clause that requires an umpire be employed when a homeowner and insurance provider disagree on the settlement for a damage claim. The umpire decides value loss and offers it to the homeowner as an alternative and prior to an owner filing a lawsuit against the insurance company. Before this step, however, an appraisal report from two appraisers is required: one from an appraiser the insurance company hired and the second from an appraiser hired by the property owner. If the two reports are not in agreement, the hired appraisers must meet to negotiate a mutually agreed upon sum. If an agreement cannot be reached, the appraisers have to agree to bring in a third appraiser to act as umpire. The umpire will look at both appraisal reports, talk to each appraiser as they feel necessary, and choose one of the value conclusions as the definitive value or, alternatively, develop their own value conclusion.

In my situation, the appraiser for the insurance company (I'll call him Joe) was not a USPAP compliant appraiser. In fact, he was not an appraiser at all, although at one time Joe had some appraisal training. His company primarily worked for insurance companies in exhibition transportation and adjusting, but Joe had the power to negotiate on his client's behalf. I, on the other hand, did not feel I could responsibly negotiate for my client. I felt it would require bias on my part and be contrary to USPAP. The conduct clause of the Ethics Rule specifically states that an appraiser must "not advocate the cause or interest of any party or issue." I did believe, however, that I could defend and stand by the value conclusions that I reached through research and due diligence. We met, the opposing appraiser felt my conclusions were too high (his were based on auction results), and we left in disagreement. Per the insurance clause, the next step was to bring in an umpire.

I provided Joe with three names of appraisers. Joe was to pick one or offer another candidate as an alternative. It was important to me that the people I submitted be experienced with the type of art that was the subject of contention, that they were appraisers who were known experts in appraisal methodology, and they wrote USPAP compliant reports. I sent Joe the résumés of the three I chose, and he agreed with one of them.

During the course of the next three months, I spoke to the umpire several times, submitted additional sales support of comparable property that had appeared since submitting my initial report, and repeatedly talked to dealers to answer questions that the umpire posed and had not been previously answered. I never spoke to Joe again. Although asked many times to take off my "appraiser hat" and put on my "negotiator" hat, I did not feel I could do so. First, my client was extremely knowledgeable about this particular genre of art and would not give me the power to act on his behalf. But more importantly, I felt that I could not keep my objectivity as an appraiser if I were to advocate for my client, even after I submitted my report. In the end, I stood on my value conclusions, the umpire reached their own conclusions that were slightly less than my estimated replacement costs but much higher than Joe's initial stated values. My client was satisfied and that was the end.

To this day, however, the clause bothers me. The situation is contrary to what I teach in USPAP. How can I negotiate a settlement with another appraiser and still remain unbiased, objective, and impartial? Being an umpire is not an issue. The job would be very similar to conducting an appraisal review, with perhaps conducting an independent appraisal assignment for value conclusions as well.

What about applying the Jurisdictional Exception Rule to act as an advocate for the client? That will not work because using an umpire is a policy choice of the company. It has nothing to do with laws or regulations that contradict sections of USPAP to which the Jurisdictional Exception Rule applies.

This year I came across a small footnote while teaching the 7 Hour 2018-2019 edition of USPAP. For those of you who have the student manual, it is on page 45. Under "Advocacy" in the chart entitled "Yes, I Can Accept That Assignment..." USPAP says that an appraiser can be an advocate and gives an example of representing one party in a court proceeding. However, there is a footnote. The footnote reads, "An individual may provide services as an advocate, or as an appraiser (one who expected to perform in a manner that is independent, impartial, and objective); however, one cannot act in both roles in the same assignment. When acting as an advocate, the individual must not misrepresent his or her role." (Conduct section of USPAP Ethics Rule and Advisory Opinion 21.)

In conclusion, remember that your role as an appraiser is to provide an unbiased opinion of value that is supported by facts. As an appraiser, you could be hired as an advocate, but USPAP states that you may not act as both an appraiser and an advocate in the same assignment.

Cathy Peters, ISA CAPP, has been a member of ISA since 1999. She specializes in appraisals of fine art and is based in Naperville, Illinois.