Imagine for a second that you owned a very special Fernand Léger painting. It appraised at a certain price 20 years ago…but aren’t you the least bit curious of its worth after Madonna auctioned off “Trois Femmes à la Table Rouge” for $7.2 million? Or perhaps you’re curious about your 1978 bottle of Montrachet. Wouldn’t it be lovely if you could privately and securely track its value in real time? (And while you’re at it, you might as well monitor how market fluctuations are impacting the value of your apartment in Paris!)
Until now, there was no place—at least in the digital world—where you could collect all of the information on your most prized possessions. Enter Trōv, a Silicon Valley-based software company that actively amasses, secures and manages all of the data on your tangible wealth assets. It arrives at a time when cloud-hosted data is digital gold and the global household wealth portfolio is now equally split between financial and non-financial (tangible) assets. Previews® Inside Out recently spoke with Trōv founder and CEO Scott Walchek about everything from the shifting paradigm of wealth asset management to assigning value to the items you love most.
Previews Inside Out What value does Trōv bring to modern-day tangible asset management?
Scott Walcheck Technology is disrupting major industries from media to financial services. In wealth management, the high-level math is staggering: there is roughly $230 trillion of personal wealth worldwide and half of that—
Scott Walcheck Technology is disrupting major industries from media to financial services. In wealth management, the high-level math is staggering: there is roughly $230 trillion of personal wealth worldwide and half of that—$115 trillion—is in tangible wealth. Despite its enormity, tangible wealth has never been actively managed so the affluent are under-protected, poorly informed, and bereft of a complete view of their active portfolio. Leaders in financial services are becoming increasingly attracted to the proposition of Trōv because it completed the view of wealth by collecting and actively managing all of their tangible wealth information.
Previews Inside Out Can you give us an example?
Scott Walcheck Recently, we served a customer who inherited a collection of 53 art pieces back in the 1980s. At the time of his inheritance, he received an initial appraisal, which valued the collection at a few million dollars. Through the years, there had been no active management of those pieces. When he became a Trōv user, and the replacement value of his collection was ascertained, the value had increased to over a half a billion dollars in those 30 years! Had there been a loss or damage to those pieces, he would have been exposed to enormous financial risk. Not to mention, he probably made financial decisions over the course of those 30 years based on his liquidity. If he had known the real value of what he owned and what he ownedtoday, he might have made different decisions.
Previews Inside Out What’s the range of beautiful things that can go into Trōv?
Scott Walcheck Our members (users) determine what they consider treasure. We have had artwork priced as high as $80 million in a Trōv, while some folks use Trōv to catalog their home amenities—from the faucets in their sinks to high-end electronics. Some can be as low $100.
Previews Inside Out Can you give us a global snapshot of Trōv right now?
Scott Walcheck As of July, we had over 240,000 individual assets with an estimated value of $4.3 billion in the Global Trōv—which is the aggregated number of the items and values in all our members’ Trōvs. Today, the tangible wealth distribution in the Global Trōv is 53% in art, 30% in jewelry, 10% in collectibles and furniture and 4% in auto. Of course, that changes on regular basis and we track those changes weekly.
Previews Inside Out In general, how do you assign value to an item?
Scott Walcheck If you want a value that has legal weight (for either estate planning or insurance, donation or resale purposes), you must have a qualified appraiser look at the item. So our appraisers are an important part of the process. However, as we are learning from our appraisal partners, we can replicate the human algorithm with machine algorithm—and by adding a greater data sample to create a more precise value of that asset. We are applying our enormous engineering brain trust to the problems around appreciating assets—collecting data around wine, diamonds, and other jewelry, collectible autos and art. This data exists in pockets around the world, but no one has yet leveraged the information for individuals like Trōv is doing. The long arc for us is to be able to evaluate everything in real time. For example, say you own a Maxfield Parrish illustration, and at a recent auction, a collector was buying up Maxfield Parrish art, driving up the price of his works by 30%. We can give a restricted-use machine value that says: “generally speaking, it looks like your art is worth X+30%.” That would be a signal that you might want to get it verified by a qualified appraiser, connect to your wealth advisor and insurance broker, and consider your liquidity options. All that is seamless with Trōv.
Previews Inside Out Do you think the human element of appraisals will ever go away?
Scott Walcheck For many items, not any time soon. We are not yet at the point where we can create a unique protectable serialization or unique identifier (like a global asset fingerprint database), that can guarantee authenticity, so we still need people to verify authenticity, condition and provenance.
Previews Inside Out Are there any particular items that are especially difficult to evaluate?
Scott Walcheck The so-called “long tail” collectibles…those rare items that are sparsely traded or really esoteric collections like Chinese jade pieces. We are not the experts here, but we have an extensive corral of folks and Trōv-friendly partners who help assign value to these kinds of specialty items.
Previews Inside Out It’s a bit circular…after all, you’re collecting information on a collection! Where does the data itself come from?
Scott Walcheck There are five ways we collect data: 1) automated import, 2) emailing electronic receipts, 3) merchant partners, 4) mobile application and 5) onsite.
You can think of automated import in terms of this analogy: Mint (the popular financial software from Intuit) is to your financial assets as Trōv is to your tangible assets. Enter your credentials, and Trōv gathers and organizes your shopping history replete with supporting information like photos, user manuals and the like. Additionally, whether you shop at Neiman Marcus or Pottery Barn, you can simply have the e-receipt emailed directly to your Trōv and our backend service does the rest. We’re also working with numerous high-end luxury merchants—from online retailers and auction houses to bricks and mortar shops—to deliver information at the point of sale. So in essence, Trōv will be the new receipt for luxury goods. Our mobile app also allows you to take a picture of your purchase (or an item you own already) and send it to Trōv. Lastly, we can collect this data onsite and in person—in the very private spaces of your life—your home. And of course, there is always manual input as well.
In the future, though, all of the information about the objects you purchase—including photographs, user manuals, warranties, etc.—will be easily acquired and already built into those objects, eliminating laborious collection. We call this being “born digital”, and when this happens, Trōv will be at center of this maelstrom of useful data.
Previews Inside Out As far as psychology goes, how much do you think individual passion in personal collections will play into Trōv’s long-term growth?
Scott Walcheck We often say there are six motivations for why people use Trōv: utility, a complete view of wealth, greater liquidity, asset protection selectively sharing information for commerce andvanity. To a great extent, the viral adoption of Trōv will find its lift on this last motivation. The collections in Trōv are passion investments—the things that people love most—and naturally, people want to share the things they love with others—either one-on-one or in a social media setting. After all, if you are fortunate enough to own a Maxfield Parrish illustration, why wouldn’t you want to share it with those closest to you?