Practicing Due Diligence
Due diligence. The term may sound a bit daunting, but simply put, due diligence is doing your homework before making a final decision or investment, entering into an agreement or completing a valuation or appraisal.
Our homework is a comprehensive audit of the data we provide you, including where and how it is collected, who processes it, how it is processed, uploaded and retrieved for reports. We also audit the platform to ensure its effectiveness, reliability and readability. We check, double check and then triple check through a series of audits and quality management practices to ensure we deliver what we say we do and to earn your confidence and trust in us, our data, platform and products.
While our homework requires we provide clean, accurate, verifiable data, your homework is to investigate the fine art market before finalising a valuation or appraisal, making an investment or predicting market performance.
360º Due Diligence Process
Valuations and appraisals are serious financial documents. Whether you're valuing art for insurance, tax, probate or investment, your clients rely on you to do the best for them. Analysing the market to help with making investment or divestment decisions is just as serious. Taking a 360º approach to due diligence ensures you've taken the care needed to finalise your reports and make sound decisions.
- Start with quality data – clean, accurate, verifiable – and understand it. Know what it represents, how it is processed and what happens to it before you begin using it. Ask yourself if you know what you're looking at. If you need to look at 100% of the data, is that what you're getting?
- Transform data into information. Generate customised reports. By building reports based on your specific parameters, you transform the data into information that you can then use to gain valuable insights.
- Ask questions. Good data reporting should raise questions. What is it showing you? Is there a significant spike or dip in the market? What happened to influence the changes you see?
- Look at supportive evidence from other data sources. Identifying and comparing similar objects that have recently sold is another aspect of market analysis that can enhance your final report.
- Analyse the data and information to answer questions and gain insights. Use your expert knowledge to answer the questions that arose out of the reports, develop hysptheses and test them.
- Produce description reports delineating other critical details. Limiting conditions, remarkable discoveries, attribution and authenticity all need your steely eye and keen knowledge for analysis. Use art title, claim check and art recovery databases and check with art forensic specialists to verify authenticity and identify claimed cultural objects.
- Analyse and revaluate throughout the entire process. QBI and other data sources present information for you to analyse and build a fully informed appraisal. Your experience and understanding of the market is essential; use it to critique these quantitatve data sources. And use them to underpin your expert estimations or glean new insights.
- Finalise your report and take action. Once you've taken a 360º view through the analysis of quantitative data, like-for-like comparisons, conditions and obeservations, you're ready to finalise your valuation or appraisal. Your job is to delve deep into the data and information to interpret it, answer questions and provide recommendations to your client. Using your final analysis of quantitative data, object description, forensic and authenticity reports, finalise your valuation or appraisal and make a decision or a recommended action to your client.
- Be willing to adjust to the market. When new resources become available, be open to including them into your process. Research them, try them and see if they make a difference. If you like them, include them. You can never go wrong with adding value to your service.
Doing a Little More Can Make a Big Difference
You may be doing enough. But doing a little more can make a big difference to your clients. Being aware of the available resources is the first step to determining if you've done enough. If there is something available that can give you something more, complete the story or give you an edge, why wouldn't you do it? Due diligence requires more than doing it the way you've always done. It requires embracing new methods and resources that enable you to see a bigger picture and incorporate these into your practice. It requires you to do your best.
At QBI, we don't rest on our laurels. We embrace new technology and resources and incorporate them into our practice to make our process and products better. We open ourselves up to your criticism to help us become better. We add to our repertoire of products and services to meet your growing needs. We empower our staff by supporting their ideas, creativity and talents and encourage continued professional development to ensure we remain the best at what we do. We listen to you so we can serve you better. We don't stop challenging ourselves and we never stop learning. Our 360º approach to due diligence requires us to do our best and then ask how we can do it better. One of the ways is by helping you do your best.