As I see it, jewellery valuation documents are a window through which Insurance Companies, Lawyers, Jewellery Owners, and others outside the Jewellery Trade look in, and as such it is crucial for the good of the Trade, and the standing of Valuers, that the window has a sound frame, and clear transparent glass.
Ethically speaking, that window is pretty fogged up at present, especially in Australia and the United Kingdom. Many third party readers of jewellery valuation reports in those countries would be very surprised to learn that the Valuer can keep secret from them the fact that he or she was also the seller of the item in question and that he or she may have sold it for half what it is valued at.
Apparently, in the UK there is no provision in the rules or ethics of the Institute of Registered Valuers for a Valuer who is also the seller of the subject item to disclose that fact in their valuation. The situation is identical in Australia with the National Council of Jewellery Valuers only requiring the Valuer to verbally disclose their financial interest in the piece to the person they are preparing the valuation for (who will usually be the purchaser and therefore will automatically know anyway). Never mind that the insurance company the valuation is submitted to in support of an insurance claim, or the person who is looking at purchasing the item further down the track might consider that fact rather crucial to their decision making. In fact, if the same situation occurred in the domain of Real Estate the Valuer would be in front of the judiciary in very short order.
I discovered this rather glaring anomaly when we were asked to value a piece that had just been purchased in Australia and which came with a recent valuation from a Valuer of high standing. It was only when we contacted the Valuer to advise them, as a matter of courtesy, that we had identified a stone in the piece differently to their findings, that we discovered that the Valuer had also sold the piece and for half the valuation figure. I queried the Valuer as to why they had not disclosed that fact in the valuation and they advised that they didn’t have to. I then checked with the head of the National Council of Jewellery Valuers and they confirmed what the Valuer had told me.
This contrasts with the outcome of a recent occurrence in New Zealand with almost identical circumstances. A member of one of the NZ Jewellery Valuers organizations had valued an item six months before it was stolen and subsequently become the subject of an insurance claim. That valuation document also did not disclose the fact that the Valuer had sold it for half the valuation. In contrast to the Australian example, however, a complaint was able to be made to the NZ Valuers organization and the Valuer has now undertaken to include a disclosure statement in their valuations. Here is the relevant clause in the NZ Jewellery Valuers code of ethics –
Disclosure
Members are advised, that if an appraisal is requested, or is to be presented by them on any item, in which they have any form of interest, or intended interest, a clear statement of disclosure, shall appear prominently on the presented appraisal document.
Concurrent with these two incidents, and because of similar concerns in the UK, a Jewellery Valuer in Scotland by the name of Adrian Smith has gone about founding an international Association of Independent Jewellery Valuers, www.aijv.org . This association seeks to identify and promote professional jewellery valuers who are truly independent by virtue of the fact that they do not buy sell replace broker or trade in any way in jewellery, stones, precious metals, or watches. Adrian sent invitations for membership to valuers associations in the US, UK, Ireland Canada, Australia, South Africa, New Zealand and many other countries. Australia is one of the countries from which no membership application has been received, let alone accepted. Is this because there are no valuers in Australia who do not also trade? If this is the case, wouldn’t you think that it would make documented disclosure, by the Jewellery Valuer, of financial interest in the subject item an absolute necessity?
If Jewellery Valuation documents are indeed a window into the Jewellery Trade isn’t it time for squeegees to be issued to the Australian Council and the UK Institute?
Here in the US we have the Uniform Standards of Professional Appraisal Practice (USPAP), which governs primarily real property appraising, however, has also evolved over the decades to include personal property. Every major appraisal organization subscribes to USPAP and requires their members to follow USPAP standards. Below is a sample of a certification statement (they can vary) that addresses the issue(s) raised in this blog.
Regards – Thom
CERTIFICATION OF APPRAISAL PRACTICE
I hereby certify that, to the best of my knowledge and belief:
? The statements of fact contained in this report are true and correct.
? The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and they are my personal, impartial, professional analysis, opinions, and conclusions.
? I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect the parties involved.
? I have no bias with respect to the property that is the subject of this report or to the parties involved in this assignment.
? My engagement in this assignment was not contingent upon developing or reporting predetermined results.
? My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
? My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPSP) 2008 – 2009 Edition, published by the Appraisal Foundation and the Code of Ethics of the National Association of Jewelry Appraisers (NAJA).
? I have made a personal inspection of the property that is the subject of this report, unless otherwise clearly stated.
? No one provided significant personal property appraisal assistance to the person signing this report.
Thanks for that Thom
I knew that somehow the States would have this sort of thing covered.
Hello Paul,
Yes, I too have disclosure that is given.
Each of my valuations has a cover sheet with all the details for the client relevant to the article valued.
1. Purpose and Function
2. Basis of Value – for the various markets, also mentioning that actual retail prices may vary from this value due to fluctuations in the economic factors.
3. Rose of the Appraiser: This report is not an offer to buy or sell the item at any price. Unless otherwise stated I have examined every item in this report. I have no past, present or future interest in the items in this report.
4. Documentation. (regarding photographs and colour representations, nomenclature)
5. Identification and Quantification of Materials.
6. Appraiser’s Standards of Performance. In accordance with our own Valuers Society here in N.Z. (I do need to update this for AIJV as well.
7. Disclaimers: re treatments and those that may need further higher analytical testing.
8. Sales Tax component.
I believe the cover sheet is a professional looking addition to the valuation.
Cheers, Jill
Hi Paul,
Congratulations on shining a light into a rather dark corner of our industry. As usual, you are leading the way with Valuation Ethics in your part of the world.
The AIJV does not need to address this issue directly as it is a condition of AIJV membership that members do not sell jewellery. However, we do address the problem in more general terms.
Section 1e from the AIJV Code of Ethics:
Members will decline valuation assignments where it could be suggested they have a conflict of interest that could affect their judgement or values. Alternatively they must disclose the nature and extent of the conflict in full to the client and in a prominent manner in their Valuation Report.
Thanks Adrian
Its good that clause is in the AIJV code because there are times where it would be needed. At GemLab we use a disclosure statement for situations such as valuing jewellery for insurance that belongs to a staff member or even the family of a staff member.
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I was very interested to read your article as a valuer of one whole year! (Although i have been in the industry for over 12 years). The information is really valid and to be honest i think there is a much larger problem . I was taught in valuation under the “new” rules and to be honest if I wasn’t selling jewellery i could not fund my career as a valuer. I have made many trade and public enemies in my short career. The system for valuation definitely needs to change, the problem is clients are NOT happy with appropriate valuation. I have phone call after phone call from people disappointed because their ring hasn’t gone up in value in the last 5 years and trade angry because I wont value to price lists. The truth of the matter is that industry and consumers want over inflated valuations. Industry needs to be educated firstly so that they can educate their clients after all an over inflated valuation equals higher insurance premiums! I don’t believe that segregating sellers from valuers is going to fix the problem. The industry needs people with experience in both fields so we know what we are dealing with and can make a change on the ground. Many clients are very receptive once I give them information regarding why valuation is different now, but at the end of the day i am just a rookie and my word only goes so far, because the wonderful person who had 25 years experience valuing, knows exactly what they are talking about because they valued their piece higher than I did. It is going to take a very long time to change valuation in Australia but i really think it starts with education of the industry as whole, which your piece really highlights, Thank you so much for such an informative blog.