Private banks sometimes have specialist art advisors as part of their value propositions, but a survey of HNW collectors shows a significant portion take a DIY approach.

Survey evidence among US high net worth individuals shows that the vast majority of collectors aren’t guided by advisors, the world’s largest wealth management firm said in a report drawn from a major fair in Florida.

UBS Wealth Management Americas polled 2,475 US-based HNW investors from September 15–25, 2017, including 608 with at least $5 million. The survey included 363 art collectors. Some 65 per cent of respondents have never sold any works of art/objects from their collection; 88 per cent of collectors do not have an art advisor to guide their purchases and 26 per cent of art collectors have purchased art online, sight unseen.

The findings are contained in the bank’s Investor Watch Pulse Report, issued during the Art Basel program held in Miami Beach, Fl.

The report, entitled 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 per cent of investors noted they have never sold a piece from their collection, and 41 per cent confessed they have never had their collection appraised.

When it comes to collecting behaviors, art collectors find themselves driven by an appreciation for beauty (71 per cent), a desire to follow their passions (54 per cent) and a wish to support and nurture artists (32 per cent). Moreover, one quarter of investors consider their collections to be priceless, further emphasizing the fact that passion, rather than profit, is a motivating factor.

A number of private bank organisations, such as Citi Private Bank, UBS and Deutsche Bank provide art advisory to HNW and ultra-HNW clients. Additionally, as reported late in 2015, Pictet joined forces with private equity titan The Carlyle Group to back New York-headquartered Athena Art Finance to tap a perceived need for such activity.

The recent record-breaking ($450 million) sale of the Salvator Mundi picture has underscored continued interest in the fine art market as an asset class. (The work is reported to have been bought by Saudi Crown Prince Mohammed bin Salman.)

Getting advice
The report found that the collector’s first step in the purchase journey is to seek advice from other sources. Sixty-two per cent of collectors cite using galleries to educate themselves on fine art purchases. This is followed by online resources (60 per cent), museums (50 per cent) and magazines (44 per cent). Most surprisingly, one in four collectors admit to purchasing art online, sight unseen. 

The data also presents evidence that passion for art transcends generations, whereas other collections (coins, stamps, jewellery) do not do so. 

Collectors of fine art, overwhelmingly, plan to leave their art to heirs rather than sell it (87 per cent). According to the report, 90 per cent of heirs felt "honoured" to inherit an art collection, and 81 per cent intend to keep it. In contrast only 35 per cent 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 on November, 2017.