Guide
How to choose a fine wine investment company.
From the outside, most fine wine firms look alike: access to Liv-ex, bonded storage, a portfolio manager and a list of famous producers. The differences that matter sit in the terms: who owns the wine, what it costs each year, what it costs to leave, and what happens if the firm stops trading.
These are the questions we would ask of any firm, including us. Each is followed by our own answer, so you have something to measure the others against.
Seven questions
What to ask any fine wine investment company.
01
Who holds title to the wine, and in whose name is it stored?
If the wine is held in the firm's name, or through a pooled structure or a certificate, your position depends on the firm. If it is registered to you at an independent bonded warehouse, it does not.
Our answer: Every case is registered in your own name, in a named account at LCB Eton Park, an HMRC-approved bonded warehouse. We never hold title and we are not your custodian.
02
What does it cost each year, before anything is sold?
An annual management fee is charged on the value of the whole portfolio every year, whether or not anything has moved. Over a hold of five years or more it adds up.
Our answer: No annual management fee, no retainer, no setup fee and no custody fee. Storage and insurance are passed through at cost and billed to you directly by the warehouse, from £12 per 12-bottle case per year.
03
How is the wine sourced, and is there a mark-up?
A firm that offers wine from its own stock sets its own price, and the margin sits inside it. Ask what the wine cost at trade and whether you will see the invoice.
Our answer: We source at trade level through our Liv-ex membership and négociant network, with no acquisition mark-up, and you see the invoice.
04
What does it cost to leave?
Exit terms are where charges are easiest to miss. Ask for the rate on a full exit as well as on a sale, and whether it differs for wine acquired elsewhere.
Our answer: 2% of confirmed sale proceeds on wine we sourced, charged once when a sale settles and deducted from the proceeds. For wine transferred in from another firm, 2% when the proceeds are reinvested with us and 7% when the holding is realised to exit. Nothing is charged before a sale settles.
05
How is the holding valued, and how is it realised?
A valuation should use a price the trade recognises, carry its date and explain any adjustment. Realisation should run through a market with live bids, not a single buyer.
Our answer: Valuations are at Liv-ex mid-prices, the midpoint of the live bid and offer on the exchange the trade uses. A holding is realised by listing it on Liv-ex against live bids, and net proceeds are transferred within five to ten business days of settlement.
06
What happens if the firm stops trading?
This is the question that separates owning the wine from being exposed to the firm.
Our answer: Nothing happens to your wine. It is in your name at the warehouse, and you can instruct any other merchant or broker to act for you.
07
Is it regulated, and what protection is there?
Physical wine held for investment is not a regulated investment in the UK. A firm should say so plainly rather than let you assume otherwise.
Our answer: No. Cellar Advisor is not authorised or regulated by the Financial Conduct Authority, and you do not have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. We say so on every page.
Two fee models
The same sum over five years, no growth assumed.
Some firms charge an annual management fee on the value of the portfolio. Others, including us, charge a commission only when a sale settles. The illustration compares the fees alone on the same £100,000.
Annual management fee model
£7,500
Management fee of 1.5% of value each year on £100,000, held five years, no growth assumed
Charged whether or not the wine has moved.
Cellar Advisor
£2,000
2% commission on a £100,000 realisation, no growth assumed
Charged once, when a sale settles. Nothing is charged if no sale takes place.
This illustrates fees only. The 1.5% rate is an example, not a quotation from any firm. It assumes no change in value and is not a projection. Storage and insurance are paid under both models; ours are passed through at cost and billed by LCB Eton Park.
Our terms
Cellar Advisor's terms at a glance.
- Management fee
- None. No retainer, setup fee, acquisition mark-up or custody fee.
- Commission
- 2% of confirmed sale proceeds on wine we sourced, charged once when a sale settles.
- Wine transferred in
- 2% of confirmed proceeds when reinvested with us; 7% when realised to exit.
- Minimum
- No minimum to begin a conversation. Portfolios are built at every level.
- Ownership
- Registered in your own name in a named account at LCB Eton Park, an HMRC-approved bonded warehouse. We never hold title.
- Storage and insurance
- Passed through at cost and billed directly by the warehouse, from £12 per 12-bottle case per year. Insurance to current Liv-ex market value is included.
- Valuation
- At Liv-ex mid-prices.
- Realisation
- Through Liv-ex against live bids. Net proceeds within five to ten business days of settlement.
- Regulation
- Not regulated by the Financial Conduct Authority. No Financial Services Compensation Scheme or Financial Ombudsman Service cover.
- Offices
- Knightsbridge, London, and Dubai. Liv-ex member.
Our commission is a UK service and VAT is charged on it where it applies.
Common questions.
What should I look for in a fine wine investment company?
Who holds title to the wine and where it is stored, what it costs each year before anything is sold, what it costs to leave, how holdings are valued and realised, and whether the firm tells you plainly that fine wine is not a regulated investment. Ask for each answer in writing.
Do fine wine investment companies charge management fees?
Some charge an annual management fee on the value of the portfolio and some do not. Cellar Advisor charges no annual management fee. Its charge is a 2% commission on confirmed sale proceeds, taken once when a sale settles.
Who owns the wine when you use Cellar Advisor?
You do. Every case is registered in your own name in a named account at LCB Eton Park, an HMRC-approved bonded warehouse. Cellar Advisor never holds title.
How much does it cost to store fine wine in bond?
At Cellar Advisor, storage and insurance are passed through at cost and billed directly by LCB Eton Park, from £12 per 12-bottle case per year, with insurance to current Liv-ex market value included.
What does Cellar Advisor charge on exit?
2% of confirmed sale proceeds on wine it sourced. For wine transferred in from another firm, 2% when the proceeds are reinvested with Cellar Advisor and 7% when the holding is realised to exit.
Is there a minimum investment?
No. There is no minimum to begin a conversation, and portfolios are built at every level.
Is fine wine investment regulated in the UK?
No. Fine wine is a physical asset and is not a regulated investment. Cellar Advisor is not authorised or regulated by the Financial Conduct Authority, and clients do not have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. Capital is at risk.
A straight conversation, no minimum.
Risk warning
Capital at risk. The value of fine wine can fall as well as rise and you may get back less than you invest. Past performance is not a guide to future performance. Fine wine is a physical asset and investment in it is not regulated by the Financial Conduct Authority. You will not have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. Fine wine is illiquid and may take time to sell. Cellar Advisor does not provide financial, investment or tax advice. Please seek independent advice before making any investment decision.