Investing in Fine Arts

The art market has been going through a major transformation for the last 15 to 20 years. According to Adriano Picinati di Torcello, director and global art & finance coordinator at Deloitte, revolution might be…

The art market has been going through a major transformation for the last 15 to 20 years. According to Adriano Picinati di Torcello, director and global art & finance coordinator at Deloitte, revolution might be a more appropriate way to describe the changes that are positioning art as an important asset class. 

“This revolution is driven by many factors,” Adriano, co-author of Deloitte’s internationally respected Art & Finance Report says. “Of course globalization of the art world is one of them.”  The market is also being shaped by advances in technology, a certain level of democratization and an increasing awareness among political and civic leaders of the role that art can play.

“Wealth is a massive driver for the transformation of the art market,” he adds. “It is estimated that right now you have around $1.6 trillion of wealth allocated to art and other collectibles by the ultra-high net worth individuals, the ones who have $30 million-plus. We estimate that this could grow to $2.6 trillion by 2026.”

It’s not just the amount of wealth flowing into the art market that accounts for that projected growth – it’s the number of people, too. “There are more wealthy individuals on this planet,” Adriano says. And those people are everywhere – from China to Chile. 

All those dollar signs and all those people might lead you to think that investing in art is only for the very rich. Fortunately, that’s changing, too.

Technology is throwing the doors to the art world wide open, inviting young and old, rich and poor to explore its dynamic landscape. Families in remote regions of Africa or Australia can tour the collections of the world’s greatest museums on their laptops. Artists can reach new audiences by displaying their work on Instagram. Bandwidth, image quality and 3-D views all allow works of art to come alive on a multitude of screens, entrancing buyers from a world away and enabling online sales of art to blossom.

“Technology has opened a completely new array of possibilities in terms of transactions and online art businesses, but also of how we experience art,” Adriano says. “In the financial world, there’s this buzzword – fin tech. Now we have something similar in the art world, art tech –service companies in the art world that use technologies like blockchain, cryptocurrencies, augmented reality, artificial intelligence, big data, those kinds of things.”

Of course, you can still enjoy art old school – and there are plenty of people doing just that.

Visit a local art show or fair and you’ll get caught up in the creativity and the crowds, with people of every age and every income level seeing, being seen and walking away with newfound treasures in their hands,  “We see the number of people going to those art fairs growing and growing and growing,” Adriano says.

This growing trend reflects what he calls a democratization of the art market as well as an increasing interest in art in general. “More people are discovering that possessing prized paintings, prints, sculptures and valuable collectibles is now within their reach,” he says.

And, while individuals are expanding their relationship with art, Adriano says, you will also see a growing number of countries, counties and towns showcasing art and developing cultural infrastructure as a way to a gain a competitive advantage in terms of economic development as well as in terms of soft power and prestige. 

“It’s a complex environment where you have many drivers that are transforming this market. Based on my analysis, the convergence of all those trends during this period of time is unique,” he says. “The combination of all those elements makes the context more dynamic and more interesting.”

Unfortunately, when it comes to discussing the art market, artists are often left out of the conversation.  On the plus side, Adriano says, “The more you have people interested in art and culture, the more beneficial it is for artists.”

On the other hand, he reminds us, kids who want to be artists when they grow up don’t often get a lot of encouragement.  “If you were telling your parents you wanted to be an artist, they were scared because it was never perceived as a serious profession,” he says.  “This is something that needs to be changed.”

In order for that particular change to occur and for artists to be successful, they must consider things like branding and accounting as well as composition. “When you look at art classes today, you are mainly educated on how to develop your artistic gift.  The business part is quite often ignored,” he says.

“I think it’s also a question of perception and understanding of the role of the artist in the economy,” he says.  “In the end, we have to talk about an economy. Once people realize that culture is also an economic force, it’s an economic sector, that will help.” 

The trends Adriano has identified have contributed to an increasing recognition of art as an investment class. The often jaw-dropping prices that have been seen in the art market recently have further fueled interest. The creative energy being unleashed as a result of this revolution brings with it a wealth of opportunities. But remember, Adriano cautions, where there is opportunity, there may also be risk.

 When it comes to investing in art, aesthetic returns are something you can safely predict. Financial returns, on the other hand, are much harder to call. Adriano’s advice to potential investors: Buy something you like but do your homework first.  “We say to anyone who wants to enter into the art market, don’t rush. Study, learn, take advice, consult. After all that, you can make an acquisition,” he says.

On June 20, Adriano Picinati di Torcello, Director and Global Art & Finance Coordinator at Deloitte, and co-author of the report will speak in Broward County about the global art market and share his latest insights. This free event is presented by Broward Cultural Division at ArtServe in Fort Lauderdale (1350 E. Sunrise Blvd.). Seating is limited, and RSVPs are strongly advised:


This article originally published in Art Hive Magazine Issue #26, which can be found here.