Guest Comment: Ten Top Trends For Investment In Fine Art

Randall Willette Fine Art Wealth Management Founder 4 January 2013

Guest Comment: Ten Top Trends For Investment In Fine Art

Editor’s note: An area of interest for high and ultra high net worth clients in recent years has been investment in fine art, an asset class that has found favour at a time of fears about inflation and returns from conventional sectors, such as equities. An expert in the field is Randall Willette, founder and managing director of Fine Art Wealth Management, and a member of this publication’s editorial board. He has 10 tips about the sector:

1.  Wealthy individuals will move away from emphasis solely on the preservation of their capital toward an increased focus on using their wealth to realise what they define as a richer life and greater sense of fulfilment.

2.  Engaging private clients through their passions will have immediate and practical benefit to wealth managers by deepening client relationships and enhancing client retention.

3.  The private collections of UHNW individuals will continue to rival those of major art institutions and have a significant impact on the global art market.

4.  The interests of financial families with exceptional art wealth will become even more diversified and interdependent, necessitating greater integration of art and finance. 

5.  How private collections will be managed in estate planning will have tremendous implication for collectors and their families. 

6.  As younger generations assume leadership, the management of private collections will be integrated into the family office platform.

7.  The family office will play an important role in managing art wealth, guiding significant philanthropic endeavours, and maintaining a core set of values for family collections across generations. 

8.  As the art market becomes more litigious, sound art governance and "best practices" in art due-diligence will grow in importance for private collectors.

9.  The desire for tangible assets coupled with concerns about the broader financial markets will  encourage sophisticated investors to increase the proportion of their wealth allocated to art.

10.  Globalisation and structural inefficiencies in the art market will drive demand for financial innovation around art assets.

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