When paying a dealer for advice, do they have an ethical obligation to discuss the financial realiti

Longacre

Let's say that you have a collection of old holder coins, which are graded AU58. Now I am not implying that there has been any grade-flation in the past several years, but for kicks, let's say that these coins would be graded MS61 today. Let's also assume there is a big price jump between the AU58 and MS61 grade. Additionally, these old time coins have original surfaces and/or are toned.

Let's suppose you go to a certified numismatic professional and tell him that want to sell your collection, and in order to feed your kids, you need the maximum money possible from the sale. Does the numismatic professional have an ethical obligation to tell you about the benefits of dipping the coins and then resubmitting them, in order to increase the chances of getting the coins into MS holders? You specifically asked the dealer about maximizing your profit potential, and you're paying for his advice, so I was wondering if this is something that has to be discussed as an option. I frequently compare coin dealers to medical doctors because both are highly specialized professionals. If a coin dealer does not counsel you on the benefits of dipping a coin, that would be like a doctor not telling you about a treatment option for your medical condition because he does not ethically agree with that particular treatment.

What do you think?

MarkInDavis

If I am paying a coin dealer for advice, I expect access to all of the dealer's knowledge not just some of it. The dealer should counsel me as to the potential upside of dipping as well as its potential pitfalls. I need not be advised about doing anything illegal to increase my coins' value, but dipping is not illegal.

Elcontador

Mike, in a perfect world, I would agree with you. If you are paying for his advice, versus selling him your coins, I think he SHOULD present the matters you discussed as an option. Some dealers I know would do this.

Most, however, would try and tell you that your coins are just okay for the grade, try to get them as cheaply as possible from you, dip the coins themselves and THEN resubmit them, keeping any profits that resulted for themselves.

Numismatics is virtually an unregulated business, and the only entry requirement you need is money or access to it. I wouldn't call it a profession, as there are no discernable standards that one must obtain, exams to pass, etc. to be called a numismatist, unlike law, accountancy, or medicine. There are no continuing education requirements, nor are there any sanctions that I am aware of re unethical behavior that are levied by a governing body.

A number of these guys routinely make money in good times, go BK in bad times, and reopen when times get better as if nothing has happened. There are issues re some dealers ignoring mandatory form 8300 filings and suffering the consequences. None of this stuff is general public knowledge, but it's out there.

Compare this to the semi-monthly letter I get from the State Board of Accountancy. On the back page(s) are a list of people who have had their licenses to practice accountancy suspended or revoked, and the reasons for such suspension / revocation.

ricko

If he is being compensated, by you, for his input - then he is ethically obliged to give you full disclosure. If you are simply asking for free information, he can do anything from pointing to the door to full up information. Cheers, RickO

RYK

Once again, I agree with Jeff.

TahoeDale

Why would you be paying the dealer for advice? Pehaps because of no prior dealings?

The relationship should be built of buying/selling coins, assistance with auction preparation, resubmissions for regrades, and perhaps discussion on dipping any of the mottled appearing coins.

If you have had no previous relationship with this dealer, and he/she is not a known quantity to you, how do you respond to the suggestion that the coins be dipped for the potential increase in grade?

So, no. I see no ethical requirement that a dealer suggest a coin be dipped to increase the potential. And most dealers have little knowledge, except in a few cases, as to the likely outcome.

NCS will tell you, or a dealer, for a price, whether a coin can be successfully dipped, and retain the "same" grade. It would then be incumbent on you to try to get it upgraded by a TPG.

Longacre

<< <i>Why would you be paying the dealer for advice? Pehaps because of no prior dealings? >>




For the hypothetical, let's assume you go to a dealer you never worked with before for a numismatic checkup, and you agreed to pay him by the hour for his assessment.

IGWT

I'd say no. My doctor doesn't tell me drink heavily to reduce stress. My accountant doesn't tell me to understate my income to avoid taxes. My lawyer doesn't tell me to . . . oh, wait . . . yes he does.

PerryHall

Sounds like top tier slabbing services will reward dipping in some circumstances. What a shame!!! If anything, they should deduct a point or two for dipping.

BigBuffaloGuy

I think the more important question is discussing the dangers of dipping a coin. A lot of times, hidden marks, lack of luster, old hairlines, etc. are hidden by a coins natural tone. I can tell you horror stories about "coin doctors" who lost thousands of dollars on a single coin by thinking that a coin would "dip out" and didn't. Now, if the coin is ugly, and there is little down size to dipping it, then a dealer should, of course, make that suggestion to you.

Frankcoins

<< <i>Why would you be paying the dealer for advice? Pehaps because of no prior dealings? >>



Perhaps to represent you to get the highest amount from your holdings?

Does your attorney, stockbroker or Realtor work for free?

Shamika

<< <i>I frequently compare coin dealers to medical doctors because both are highly specialized professionals. >>

Quite an interesting comparison if I do say so.

Steve27

"and you're paying for his advice, "

Yes, he has a fiduciary responsibility to give you the whole story.

mckaleta

<< <i>"and you're paying for his advice, "

Yes, he has a fiduciary responsibility to give you the whole story. >>



i feel like my car mechanic doesnt give me the whole story, even when i pay him.