Collectors can assess whether they need a holistic financial plan for their collections based on three factors.
- The first factor is the percentage of family wealth tied up in art. The higher that percentage, the more important it becomes to have an art-related financial plan.
- Given the fundamental illiquidity of art, how liquid is the collector’s remaining balance sheet? If it’s similarly illiquid, perhaps because it’s invested in real estate and private equity, it becomes more important to have a plan for the art collection.
- How many objects are in the collection, and in how many different collecting categories? The larger and more diverse a collection, the more important it is to have a financial plan that reflects the idiosyncratic and nuanced marketplaces where objects in each collecting category are traded.
It is important for any future or seasoned collector to:
- Collect art that matters to you – and avoid trends. Collecting is highly personal, when starting out, be open. Think about what interests you – what you find visually, emotionally, and intellectually compelling. Don’t follow trends just because others have jumped on them, or focus only on the latest top-selling artists. While art dealers and advisers can provide valuable information and direction, collectors should shape their own unique focus.
- Take time to research and develop your eye, it’s really important to research, Rosemont Art Advisory takes each collector for a private tour in a museum, art foundation, gallery, artist studio, we advise to see and read as much as. Train your eye!
- One should also be careful about not overpaying for a work. New collectors should not hesitate to ask about pricing and compare: ‘if, for example, you are looking for a work by an artist at a fair, visit all of the booths that feature work by that same artist. Note differences in quality: is the work emblematic of the artist’s oeuvre? How do the compositions compare? Over time, it is possible to get a sense of the market and what might be a fair price. Consult databases including Art Price and Artnet, for past auction sale records, especially when considering works on the secondary market.
- Remember that caring for a collection is a commitment. Most collectors don’t think about the long-term care artworks require when they first start out, after all it is a big responsibility to own an art collection. Collectors can anticipate spending 1-5% of a collection’s total value on care annually. At the time of acquisition, one should consider any applicable auction premiums, sales and import taxes, framing, and shipping. Other expenses may include: installation, insurance, inventory management, appraisal and conservation.
- Explore online platforms, we’ve seen a complete shift to online platforms as a result of the COVID-19 crisis, and a welcome increase in transparency around prices as well as overdue technological improvements. Art Basel’s Online Viewing Rooms, which bring together more than 4,000 artworks presented by 282 of the world’s leading galleries. Such platforms offer opportunities to learn and can be a fantastic entry point for new collectors. Short films, offered by dealers, allow prospective buyers to gain a sense of an artwork’s scale, and assess fine details, such as brushstrokes and framing.
Elsewhere, when considering buying a piece from an online platform or from a jpeg, a video of the work should be requested if it is unfamiliar. With more and more fakes appearing on the internet, collectors should only consider works from trusted sellers and always consult with their art advisor.
- Embrace adventure, one of the most important qualities in a great collector is the willingness to take risks, sometimes, that can just mean getting ahead of the market – discovering things before other people do, and being adventurous. Over time, the most dedicated collectors will develop, not just personal preferences, but expertise: the best collectors know as much as any art experts out there, sometimes more. Collectors at the beginning of their journey shouldn’t feel intimidated: there really are price points for everyone.
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For more information, please contact Karolina Blasiak: k.blasiak@rosemont-mc.com