Arts, Collectibles & Wealth Management

Asia, as the fastest growing market by number of High Net Worth Individuals ("HNWIs") and total wealth, has been a key target market for wealth managers in recent years. However, intense competition, rising costs and a talent shortage in the wealth management space has led to market consolidation with the recent exits of Societe Generale, Bank of America and ING Groep from the wealth management business in Asia. In order to survive and thrive in such market conditions, wealth managers need to either achieve economies of scale or specialize in a specific niche. While the majority of wealth managers are primarily focused on expansion of their footprint, digital transformation and profitability, this differentiation issue has still not been fully addressed.

In the current climate of economic uncertainty, the investment focus of HNWIs is shifting towards alternative investments, such as art and other collectibles. Besides emotional and social value unique to art and other collectibles, this asset class has shown low correlation with traditional asset classes, and hence is an ideal hedge against inflation and an important part of a HNWI’s portfolio diversification strategy.