This Art & Finance report aims to act as a barometer for the emerging art and finance industry and highlights the main trends and developments in the art market.
Since launching the initiative in 2011, we have seen the global art market ebb and flow: from the aftermath of the financial crisis to the peak of the market in 2016. In parallel, we have also monitored how the wealth management sector is increasingly responding to competitive pressures in its own industry, and the role art and collectible wealth are playing in the transition to a more holistic wealth management model.
Since our last report in 2017, external factors such as increasing political and economic uncertainty, rapid technological progress, climate change and social inequality have dominated the headlines on a daily basis. We live in a changing world, fraught with uncertainty. This is the context in which we should view the global art and finance industry—the crucial intersection between culture and wealth.
We hope that this report will help to raise awareness of the developments and initiatives that have emerged within the art and finance industry over the past couple of years. Transparency, regulation and technology trends will play an important role in the future of the art and finance industry. However, a collaborative approach between all stakeholders (art professionals, collectors (young and old), and wealth managers) is essential if we are to address the pressing issues and challenges we face, particularly as regards increasing trust in the art market today and in the years to come.
It is now six years since the first issue of the report was published and it has been exciting to follow and monitor how the Art & Finance industry has evolved over the years. In this anniversary report we have brought together and compared the findings and developments from the previous four editions with this year’s findings.
Increasing competition in the wealth management industry has put emphasis on a more holistic wealth management model, which has become a key driver and motivation for incorporating art-related wealth into the service offering.
A lot has happened since we launched the inaugural issue in 2011. One major change over these years has been a shift in the primary focus on art investment toward issues around the management of art-related wealth, including art-secured lending, estate planning, art advisory and risk management. What is particularly encouraging this year is that we are seeing both a confirmation of the increasing convergence between collectors, art professionals, and wealth managers on the role of art in a wealth management service offering, as well as a convergence of different stakeholder initiatives when it comes to improving art market transparency and the infrastructure around the management of art and collectible wealth. Many of these tools and services are mentioned in this report.
The 2016 Art & Finance report comes at a challenging time for both the art market and the wealth management industry. With the art market growth showing signs of slowing toward the end of 2015 and in early 2016, combined with slower economic growth, increasing volatility in the financial markets and geopolitical uncertainty, the picture is becoming more complex and unpredictable.
Based on the findings of this report, the wealth management industry is clearly taking a more strategic view on art as an asset class and how it might be used as a tool to build stronger and deeper relationships with clients, in an increasingly competitive marketplace.
Since the first report, we observed significant shifts in perceptions of the role of art in finance, as well as the role of finance in art. What emerges from the 2013 report is a gradual convergence in the motivation and interests of key stakeholders in the art market and wealth management community as regards art as an asset class and this trend is driven by the client.
This first report was focused on establishing a better understanding of the boundaries of the emerging Art & Finance industry, the concerns and motivations of its stakeholders and the potential of art as an asset class among the wealth management community.