A recent study conducted by UK insurance firm Ecclesiastical Insurance sheds light on a trend among high net worth (HNW) individuals in the UK. It reveals that 51 percent of HNW individuals knowingly purchase replica luxury goods, primarily as a means to safeguard their genuine possessions from potential theft.
Of those who intentionally bought replicas, a substantial 83 percent stated that their primary motivation was to protect their cherished collections. This practice is not uncommon and has even been acknowledged by well-known figures such as Kim Kardashian, who, in 2021, confessed to wearing “borrowed” and “fake” jewelry following a traumatic armed robbery experience, emphasizing, “no expensive items ever come into my home.”
The research, conducted between July 9 and July 27, 2023, involved 250 UK high net worth individuals, defined as individuals with an annual income of at least £200,000 ($242,547) or liquid assets of at least £1 million. The data reveals that HNW individuals who collect paintings are the most likely to knowingly purchase replicas, accounting for 38 percent of such buyers. This is notable considering that 77 percent of this group has invested in paintings, making it the second most popular collection type among HNW individuals.
These findings emerge at a time when concerns about rising crime rates in various cities worldwide, including London and New York, are on the rise. High-profile incidents, such as robberies and burglaries involving celebrities and wealthy individuals, contribute to the apprehension surrounding the flaunting of expensive jewelry in public. For instance, in London, in April 2021, boxer Amir Khan had a £70,000 watch stolen at gunpoint, while footballer Raheem Sterling fell victim to an armed robbery in December 2022, resulting in the theft of £300,000 worth of jewelry and watches.
Reflecting on these concerns, our editorial team has contemplated the role of wealth managers in advising their clients on security measures.
This growing trend of buying replica goods coincides with a surge in burglary cases. According to the Office for National Statistics, between March 2022 and March 2023, there were 75,265 reported robbery offenses and 1,724,361 theft offenses in England and Wales. This marks an increase of 8,937 reported robberies compared to the previous year and 25,111 more than the 20-year low recorded between 2014 and 2015.
Among HNW individuals, the most common knowingly purchased replica items are handbags, accounting for 35 percent of such purchases. Additionally, 23 percent of jewelry collectors and 28 percent of watch collectors have intentionally bought replicas.
Dr. James Lindow, underwriting director for art and private clients at Ecclesiastical, advises, “We would encourage those who are not regularly getting their collections valued to do so. While it is a terrible experience to have your valuables stolen or damaged, the purpose of insurance is, partly, to recoup the value of what you have lost. Up-to-date insurance, including annual valuations, combined with robust security measures, is the most effective means of protecting your valuables. This gives you peace of mind and the freedom to leave items at home or, where appropriate, wear or carry them.”
Interestingly, more than half (61 percent) of HNW individuals have their collections appraised at least once a year, with nearly a quarter (24 percent) having them appraised more frequently. The rise of social media has also contributed to concerns about theft, as 72 percent of HNW individuals enjoy sharing their purchases with friends and family online, potentially increasing the risk of theft.
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