Art wealth management services moving into the mainstream despite concernsNovember 17, 2017
Allocation of wealth to art and passion assets part of long-term trend, according to report
More wealth is being allocated to art and other passion assets in an increasingly competitive banking industry, according to the latest Art and Finance Report from Deloitte. The financial services firm said this was a long-term trend that would see wealth managers taking a more proactive approach to art and collectibles with their clients, despite some concerns about this type of investment.
The report states: “This year’s survey results represent the highest overall reading to date for anticipated investment in art wealth management services over the next 12 months. These findings indicate that art wealth management services are slowly but surely moving into the mainstream.”
While 37 percent of wealth managers responded to the survey saying that they currently had clients with luxury investments, 44 percent said that they intended to dedicate more focus and resources to art in the coming 12 months. Increasing from 51 percent in 2016, 54 percent of wealth managers said that they increasingly see art as a way to safeguard value.
The gradually increasing interest in art from wealth managers accompanies an expected surge in the assets ultra-high-net-worth individuals will dedicate to art over the next 10 years. Currently at US$ 1.6 trillion, investments are expected to rise to US$ 2.7 trillion by 2026.
The report shows that wealth managers have concerns about the art market despite increasing investment; 75 percent of wealth managers said there was not enough transparency in the art market and 65 percent said they were concerned with the market’s unregulated nature. A massive 83 percent view authenticity, provenance and attribution issues as the greatest risks in the market.
These anxieties are reflected in the reported lack of interest from wealth management firms. 51 percent of respondents, up from 26 percent in 2016, claimed a lack of leadership in their businesses was a barrier to progress. Finding the right expertise is also an issue, with 55 percent of respondents citing this as a challenge.
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Click here to read Deloitte’s ‘Art and Finance Report in full.