Why and How high-net-worth (HNW) Collectors Purchase Art
The reasons for purchasing works of art include a variety of motivations, ranging from practical or personal to financially driven. Most of high-net-worth collectors indicate financial motivations as those of high importance when buying art objects. Using art as a method to diversify portfolios of wealth ranked the highest of the financial motivations among buyers in the US and Asia, while expected return on investment was the key financial driver in France.
Interestingly, financial motivations were not as highly rated by the elder generation, as only a third of Baby boomers (born 1946‒1964) indicated them as important, versus 75% of millennial collectors (born 1981–1996). This could likely be linked to a higher rate of art reselling in younger generation as part of making financially beneficial decisions. According to data, 71% of millennial collectors worldwide have resold works of art, versus just one-third of Boomers. Most of the investors reselling works, do so within a span of five years after purchasing it, while around a quarter of collectors resell works of art within a year.
Apart from the underlying motivations, HNW collectors consider a variety of practical issues before they make a decision to buy an artwork. Provenance and authenticity, logistics of delivery, international shipping costs and processes and object’s storage are the most common ones. By far the biggest concern for all collectors regardless of location, gender, or age was the provenance of an artwork and its good title and proof of authenticity. Namely, 94 % of collectors rated it important. Less than a half of collectors trusted their seller (gallery, auction house, or other seller) entirely for verification of authenticity, while half of the respondents took extra advice from an art consultant or some other kind of specialist.
You can find more in-depth information on art buyers’ behaviour in The Art Market 2020 An Art Basel & UBS Report, prepared by Dr. Clare McAndrew.