MIAMI, FLA.- UBS Wealth Management Americas
released today a new report that shows a majority of collectors of fine art view their art collections as a pursuit of passion rather than as an investment. In a special Investor Watch Pulse Report, released during Art Basel in Miami Beach, UBS studied the attitudes and behaviors of fine art collectors. The report, titled "For the love of art, found that despite recent high profile sales of fine art at auction houses this year, such as Leonardo da Vinci's, "Salvator Mundi, c. 1500" and Basquiat's "Untitled, 1982," 65% of investors noted they have never sold a piece from their collection, and 41% confessed they have never had their collection appraised.
Art collectors opt for passion over investment
When it comes to collecting behaviors, art collectors find themselves driven by an appreciation for beauty (71%), a desire to follow their passions (54%) and a wish to support and nurture artists (32%). Moreover, one quarter of investors consider their collections to be priceless, further emphasizing the fact that passion, rather than profit, is a motivating factor.
Collecting is a passion that we share with many of our clients who are developing alternative legacies through their cultural pursuits. Collectors dont apply the same principles to buying art that they would to a typical investment portfolio of stocks and bonds, said John Mathews, Head of Private Wealth Management and Ultra High Net Worth, UBS Americas. It is important, however, to institute management structures to ensure their legacy remains protected, correctly valued and insured.
Collectors overwhelmingly seek purchase advice from alternative sources
Eighty-eight percent of collectors do not use an art advisor to guide their purchases. The report found that the collectors first step in the purchase journey is to seek advice from other sources. Sixty-two percent of collectors cite using galleries to educate themselves on fine art purchases. This is followed by online resources (60%), museums (50%) and magazines (44%). Most surprisingly, one in four collectors admit to purchasing art online, sight unseen. This gravitation toward alternative sources, in particular digital, underscores the evolution of the art buyer's journey and how the industry will need to adapt to keep pace.
Heirs attitudes vary on maintaining a collections legacy
The data also presents evidence that passion for art transcends generations, whereas other collections (coins, stamps, jewelry) do not. Collectors of fine art, overwhelmingly, plan to leave their art to heirs rather than sell it (87%). According to the report, 90% of heirs felt "honored" to inherit an art collection, and 81% intend to keep it. In contrast only 35% of heirs who received other collectibles, including coins, stamps and jewelry, were interested in it, according to a recent Investor Watch Report called "For love not money," published November 9, 2017.
Yet, despite the interest in maintaining a legacy, 57% of art collectors have not taken steps to educate their heirs on how to manage, appraise and/or sell their collection.
Were seeing sentimental value tends to supersede financial value, said Sameer Aurora, Head of Client Strategy, UBS Wealth Management Americas. Collectors do not appear driven by the monetary worth of their art collection, and therefore are often unaware of its true value.