Otis Wealth Review [2023]: Invest in Sneakers, Comic Books, and More

INVESTING - INVESTING REVIEWS
Otis Wealth was acquired by Public in 2022, but it previously allowed investors to buy partial shares of collectible alternative assets.
Last updated May 15, 2023 | By Lance Cothern
Otis Wealth Review

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UPDATE
Otis Wealth was acquired by Public in 2022 and its services are now part of Public's offerings. For information on how to invest in alternative assets with Public, see our Public review.

Some wealthy investors diversify their investments by putting some of their money into alternative assets like collectibles. Some culturally significant collectibles have grown immensely in value over time, including certain highly sought-after sports cards and gaming cards.

But these assets often have price tags that don’t allow everyday people to own them while still leaving enough money left over to create a diversified investment mix. Otis Wealth aimed to change that. Before it was acquired by Public in 2022, the Otis platform let people buy shares of contemporary art, collectibles, sneakers, and comic books for as little as a few dollars per share.

If you're interested in investing in alternative assets, you can still find many of Otis's prior offerings available on Public's investing platform.

Quick Summary

Buy and sell shares of contemporary art, sneakers, and collectibles.

  • Sell your shares to other Public members or receive pro-rata returns
  • New drops typically added to the app monthly
  • Free education to bring you up to speed
In this Otis Wealth review

What was Otis Wealth?

Chief executive officer Michael Karnjanaprakorn, who also founded Skillshare, founded Otis Wealth in 2018. The company started offering investments in July 2019, with the goal of helping anyone to invest in high-end collectibles with cultural significance. In particular, Otis Wealth aimed to help younger investors buy shares in items to which they feel a personal attachment.

Members of the platform used the company’s iOS or Android app to purchase shares in new collectible offerings, called drops, or trade shares from past offerings on their Otis Wealth trading marketplace.

Otis Wealth sold shares in the collectibles on its site but it was not the broker-dealer for these assets. A broker-dealer is a company that buys and sells securities such as a brokerage firm. Instead, Otis managed the investments and worked with the Dalmore Group, LLC, for broker-dealer services. When you invested with Otis Wealth, your money was actually going into the LLC created for each security. So even if Otis Wealth failed, you would continue to own the shares of the underlying asset in which you invested.

Otis
Minimum investment
  • None to open an account
  • Minimum investment varied by asset selected
Management fees
  • 0-10% sourcing fee for each drop
  • 1% fee on invested capital
  • 10% of profits upon liquidation of assets
Asset classes
  • Comics
  • Collectibles
  • Sneakers
  • Art
  • Luxury goods
  • Fashion items
Account types available
  • Cash account
  • Investment account
Features
  • Investments in shares of assets
  • Trading for shares of assets on Otis app
  • App was available on iOS and Google Play stores
Distributions May have occurred if:
  • Otis Wealth generated revenue from underlying assets
  • Otis Wealth sold the asset
Best for... Someone looking to invest in alternative assets with large price tags without owning the entire investment. Potentially a good fit for true fans of these cultural items.

What did Otis Wealth offer?

Instead of limiting yourself to investing money in stocks, mutual funds, or exchange-traded funds (ETFs) with the best brokerage accounts, you could invest in culturally significant collectibles with Otis Wealth. In the past, only the wealthy could invest in these types of high-end collectibles due to their often outrageous price tags.

Otis Wealth aimed to make it so virtually anyone could choose to invest in these assets. It did this by acquiring assets, fractionalizing them into shares, and then offering those shares as equity investments to members of its platform.

Here is a sampling of the wide variety of investment options that Otis Wealth provided:

Art:

  • Police Car by Banksy
  • Greatest Hits, Three Cans of LaCroix, and Sneakers by Otis x fnnch
  • Gone and Beyond by KAWS

Sneakers:

  • Dior x Air Jordan 1 Low
  • Nike MAG
  • The Nike x Artist Collection

Comics:

  • Daredevil #1
  • X-Men #1
  • Avengers #1

Collectibles:

  • 2011 Hermés Birkin 35 So Black handbag
  • 1981 Joe Montana Rookie Card Topps Football #216 PSA 10
  • 1999 Blastoise 1st Edition Holo #2 PSA 10 Pokémon card
  • Super Mario Bros. 3 NES game cartridge

Many of these collectibles were transferred over to the Public app after it acquired Otis Wealth in 2022. 

With Otis, you could buy shares of each investment when they were initially offered, but you could not purchase more than a 19.99% share. Shares varied in price by item and could be as low as $1.00 per share for some new drops (new assets). After the pre-sale closed, trading on shares of the asset generally opened up in about two to four weeks.

Otis Wealth also had a private VIP program for those with $10,000 or more invested on their platform. It offered early access, concierge support, and private drops. These private drops usually involved items purchased from a gallery and were only open to Otis Wealth’s most active investors. The minimum investment in these opportunities, were you to get access to them, was $1,000.

Pros and cons of Otis Wealth

Otis Wealth had quite a few benefits that were difficult to find elsewhere. If you invested with Otis, you could:

  • Own shares of pricey cultural collectibles you couldn’t afford otherwise
  • Trade your collectible shares on Otis Wealth’s real-time trading platform
  • Possibly receive distributions if the asset earned income from being on loan
  • Possibly receive profits if Otis Wealth sold the item at an increased price in the future
  • See your assets in person at Otis Wealth’s dedicated gallery space in New York

The Otis Wealth platform wasn't perfect, though. Here were some drawbacks:

  • If the Otis Wealth trading platform had ever stopped operating or didn't have enough activity, you wouldn't have been able to sell your shares.
  • You couldn't decide when Otis sold the underlying assets associated with your shares. That meant Otis could effectively end your investment.
  • If Otis Wealth sold an asset for a profit, you could be subject to paying a higher capital gains tax rate on collectibles than other assets.
  • You didn't get the benefit of having the collectibles in your home where you could enjoy them.
  • Alternative assets could increase or drop in value rapidly depending on market conditions.

Who could open an account with Otis Wealth?

Otis Wealth had some basic requirements to open an account, but they were ones that most people could meet. You had to:

  • Be 18 years old or older
  • Be a U.S. resident or citizen
  • Have a bank account with a financial institution
  • Have a mobile phone number and a plan with a carrier that operates in the U.S.
  • Have a phone that supported its mobile app

Otis Wealth would also ask if you were an accredited investor when signing up for an account. Accredited investors have an annual income greater than $200,000 ($300,000 with a spouse) or a high net worth exceeding $1 million (excluding the value of your primary residence) and are considered sophisticated investors. Even so, investing with Otis was open to both accredited investors and non-accredited investors.

People who met the above criteria and wanted to invest in alternative assets could have found Otis Wealth a good fit for them. That said, some experts recommend alternative investments should only make up a small part of your portfolio, such as 10%, so you may want to consider your overall investing plan before you decide how much money to put into these types of assets.

Public Benefits

  • Get up to $10,000 when you transfer your brokerage account to Public.com 3
  • Invest in stocks, ETFs, crypto, art, collectibles, and more
  • Get insights from millions of investors

How much could you earn with Otis Wealth?

Figuring out exactly how much a person can earn with their investments is impossible. All types of investing are risky. You could lose a significant portion of your investment at any time or you could earn decent returns. No one has a crystal ball to see what their investment returns will be in the coming years.

The alternative assets Otis Wealth allowed people to invest in were even less predictable than other asset classes due to the many variables involved. Alternative assets are often illiquid (harder to turn back into cash), may get loaned out to earn income for shareholders, or may have been sold if Otis Wealth accepted an offer it felt was fair.

Unfortunately, investors didn't have any influence on generating income from loaning out assets. Otis Wealth didn't have to consult investors before selling an asset, either. The company stated that it planned to hold assets for three to seven years on average, but that could change. This made returns less predictable because you couldn't choose to continue holding the investment if it decreased in value and Otis Wealth decided to sell.

Ultimately, your returns would be determined by the particular asset you invested in and how its value changed over time. Additionally, as with any investing platform, you also needed to factor in the fees Otis Wealth charged.

FAQ about Otis Wealth

Was Otis Wealth a good investment?

Only you can determine if investing in a specific asset is a good investment for you, including the alternative assets formerly offered by Otis Wealth. Each person has unique personal finance goals when it comes to investing their money. Consider whether the asset might help you meet your investing goals and if the investment timelines a platform offers are acceptable before investing.

Was the Otis Wealth app legit?

Otis Wealth, Inc., was located on Madison Ave. in New York City and was a legitimate alternative asset investing service. While Otis Wealth wasn't a broker-dealer, they partnered with Dalmore Group, LLC. Dalmore Group is a broker-dealer that is a registered member of FINRA and SIPC. Each asset was set up within an LLC in which you directly invested. Therefore, even if Otis Wealth had gone out of business, investors would have still owned their part of the asset.

How did Otis Wealth make money?

Otis Wealth charged a 0% to 10% sourcing fee on each investment they acquire. This fee was included in your upfront purchase of shares in a new drop. Otis also got to keep 10% of the profits when they sold an asset. Otis Wealth’s broker-dealer also earned a 1% fee on invested capital.


How to open an Otis Wealth account

You used to be able to sign up for an Otis Wealth account through its app, but since Otis was acquired by Public, you now need to go through Public's mobile app.

Once you download the Public app, the sign-up process is fairly straightforward. It will request basic information such as your name, mobile number, birth date, address, and Social Security number to verify your identity. You must link a bank account to fund your Public account, as well.

Public will also ask about your financial situation to help identify suitable investments for you. This information includes your income, financial objectives, risk tolerance, and employment status.

Other investing platforms to consider

Some people don't want to invest in the type of cultural assets Otis Wealth offered (and that Public still offers). After all, some of them seem like strange things to invest in. If you don’t think these types of investments fit your style, consider these alternatives.

Masterworks is another platform like Public (and formerly Otis Wealth) that allows you to buy shares in fine art paintings. The company was founded in 2017. Like Public, Masterworks offers a secondary trading marketplace to sell your shares if you want to sell your investment before the company sells the actual asset. 

Read our detailed Masterworks review to see if it would be a smart fit for you.

People looking to get into the stock market may want to check out one of the best investment apps, Stash. 2 Stash allows you to invest in partial shares of stocks and ETFs starting with as little as $5. These more traditional investments usually make up a majority of most people’s portfolios. You can also get a Stock-BackⓇ debit card to earn an amount of stock with each purchase you make. 1  

Read our detailed Stash review to learn more.

Public Benefits

  • Get up to $10,000 when you transfer your brokerage account to Public.com 3
  • Invest in stocks, ETFs, crypto, art, collectibles, and more
  • Get insights from millions of investors

Author Details

Lance Cothern Lance Cothern, CPA is a personal finance writer and founder of MoneyManifesto.com. Lance's work covering several personal finance topics has been published in U.S. News & World Report, Business Insider, Credit Karma, Investopedia, and several other publications.