This year’s bi-annual publication by Deloitte in collaboration with ArtTactic provides great insights on art and wealth management trends in the past year as well as their evolution throughout the past ten years. Wealth management, transparency, social impact and technology are the main themes of this report and the following key findings prove the importance of the art and finance industry which is growing as we speak and reaching new stakeholders.
THE MARKET IS MOVING EAST
The Asian market represents 22.2% market share in the global auction market in the first half of 2021, up from 15.8% in 2020 and ahead of London’s 19.7% market share. The art market is clearly moving East.
THE MARKET IS MOVING ONLINE
Sotheby’s, Christie’s and Phillips’ online-only auction sales surpassed the US$1 billion mark for the first time, reaching US$1.05 billion in 2020, up from US$168.2 million in 2019.
ART NEEDS WEALTH MANAGEMENT
85% of wealth managers, 76% of collectors and 96% of art professionals all agree that art needs to be part of the wealth management offering and it is urgent to find ways now to do it. 76% of wealth managers offered art-secured lending services, up from 50% in 2019. Art-secured lenders said private collectors are their most significant clientele and can see great growth potential in Asia.
RESEARCH AND INFORMATION ARE FUNDAMENTAL
This year, 84% of collectors identified art market research and information as the most relevant art wealth management service, up from 71% in 2019.
SUSTAINABLE AND SOCIAL IMPACT
28% of collectors and 31% of art professionals see sustainable impact investment in the arts as the most attractive investment model. Instead, amongst the younger demographic (under 35 years old), this percentage increases to 50% as this group sees socially responsible investment in culture as a priority.
NEW FORMS OF ART OWNERSHIP
33% of wealth managers said their clients had expressed an increased interest in non-fungible tokens (NFTs), fractional ownership, art investment, and social impact investment in culture. It is certain that NFTs have become a clear alternative art market channel.
A CLEAR AGE DIVIDE
64% of younger collectors are extremely excited by the NFT-market, instead for now only 18% of older collectors seem open to the idea. 43% of younger collectors are interested in fractional investment linked to artworks, instead only 17% of older collectors follow suit. 71% of younger collectors are drawn to social investment products in art and culture, compared with only 15% of older collectors. Younger collectors are also sure that technology will be a determining factor in the way the art and wealth management industry will change.
SECURITY TOKENS AND BLOCKCHAIN ARE THE FUTURE
The wealth management sector clearly sees great opportunities in security tokenization, non-bankable art assets (nBAs) and the blockchain technology. New art collection management tools and technology will definitely refine provenance and traceability of art, reduce authenticity risks, improve valuation processes and increase the art market’s overall transparency.
THE ART MARKET NEEDS AN “UPDATE”
Most people interviewed agreed that, despite the technological and digital advancements of our time, the art market still needs to catch up with most new tools available.
TRANSPARENCY IS CRUCIAL FOR WEALTH MANAGERS
47% of collectors expressed their preference for government regulation, up from 22% in 2019. 44% wealth managers expressed the same belief. This, together with transparency, better access to information and more trust in the pricing mechanisms would help wealth managers promote art investments.