All Fogged Up – Why is there no Sales Disclosure in Jewellery Valuations?

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 wouldbe 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?