Wealth Management for Art Collectors: Millennials Lead the Way in 2019

 

Drawing on a unique combination of technology, sophisticated risk management tools, and  quantitative and qualitative analysis a younger and more financially driven collector base will integrate art into their overall wealth management strategy in 2019.

According to a new white paper just published by Fine Art Wealth Management Ltd. it is expected that art will increasingly become a small part of the portfolios of sophisticated investors who are searching for alternative assets with Millennials leading the way.

Highlights of the new report include:

    • A new generation of High Net Worth clients, particularly those in their 20s and 30s will increasingly look to digital channels for their art investment needs.
    • With the help of FinTech entry into wealth management process and strategy, young collectors will incorporate art into a broadly diversified asset allocation that will align with other components of their investment portfolio.
    • Proven techniques and disciplines common to the management of every asset class will be employed to form the basis of art investment strategy with many Millennials considering art as part of the alternative investment portion of their portfolio.
    • Similar to industry analysis in investment management, it is predicted that financial technology will enable art investors to have the ability to assess art sector and global economic trends influencing art market performance.
    • Investors will have the additional benefit of risk management tools to facilitate diversification across art market sectors and to regularly assess their forward view of the sectors in which they invest.
    • Behavioural research and art market intelligence will be used to identify areas of opportunity with respect to regions, sectors, or bodies of work.
    • Young collectors will be driven by their values and will view their wealth as a means to advance the artists they support. Drawn to artworks they believe in, Millennials will make the family art collection an extension of their own personal brand.
    • As Millennials assume leadership of the family collection new approaches to art investment will be demanded to more effectively respond to shifts in the art market landscape. Those wealth managers who understand their specific goals beyond their families' broader objectives will have an advantage.
    • Just as family governance is important to ensuring adherence to the family's value system and management of financial assets, the same will be true for the family's art holdings. Wealth managers will be in a unique position to offer sound and impartial advice including a well thought-out mission statement, collection management policy, and family charter that will maintain an optimum balance of collection care and family values.
    • Although art market professionals will have access to customer preferences and data they will lack the tools to generate customer insights from past art investments and behaviour data. As such, they must seek out third-party developers and FinTechs for predictive analytics on customer data to deliver targeted value propositions to their client.

    In conclusion, a new generation of wealth is emerging for whom art is an increasingly important component of their overall wealth management strategy. This well educated, tech-savvy, and socially minded generation are demanding new approaches to art investment and those wealth managers that understand this and move first to evolve their offering will prosper.

    To learn more about Wealth Management for Art Collectors please see our  Knowledge Library