Wednesday, 28 November 2012
The Wine Investment Association (WIA) – reflections before today's launch
Entrance to Château Léoville Las Cases
Update: 19.50 – The WIA site is now live: http://wineinvestmentassociation.org unfortunately a number of crucial elements of the site are not yet live including all important the Code of Conduct. I hope that as full a version of the site as possible is up with the minimum of delay. I will shortly be posting my initial reactions to the launch of the WIA.
The Wine Investment Association will be launched in London this afternoon. Here are some pre-launch thoughts about the initiative that were first posted on Les 5 du Vin yesterday.
'This new initiative will be launched on Wednesday afternoon at the offices of Mazars, who specialise in audit, tax and advisory services. It will be interesting to see not only the proposals from this new association but also to see how it will be run and to what level of independence the new body will have from its founders. Will the founder companies – Vin-X, Culver Street, Provenance Wines and Albany Portfolio Management – have to apply to an independent body for admission to the WIA or, as founders, is membership automatic?
Will cold calls be permitted by the WIA and what about upfront commissions? If investors and other fine wine companies are to have confidence in the initiative, which is potentially welcome and could be very useful for investors, then the WIA should set its face against both practices. There may be a place for a portfolio management fee providing investors are paying extra for something of value and the fee is properly explained and transparent but not if it is a disguised ‘up front commission’. This initiative moves wine investment towards regulation, albeit self-regulation. If all wine investment rather than just wine funds were to come under the remit of the FSA, then I am sure that cold-calling would be banned as it is for wine funds (classified as a collective investment) and for the selling of mortgages.
One of the most unpleasant aspects of the wine investment scams has been the hounding of elderly and vulnerable people by commission driven spivs only interested in maximising their wages to spend on flash cars, clothes etc.. Cold calling is part of that culture. I know that Albany Portfolio Management, for one, does not use cold calling as they believe that the practice is self-defeating. Surely all companies concerned about their reputations ought to come to the same conclusion?
The advice given or stance taken about storage, performance claims made, valuations, tax liabilities will also be crucial as will any proposals for policing the association.
The WIA proposals will be out for consultation until some time in January. Will they be joined by other companies? What is sure is that a group of recently formed companies have certainly thrown down the gauntlet to the rest of the UK's fine wine brokers and companies. It would have been better if this could have come from more established fine wine companies but they have hitherto be reluctant to put something like this in place.'