Fine art can be an enjoyable investment for diversified wealth management, but it comes with unique risks.
In 1995, Les Distractions de Dagobert, a painting by British artist Leonora Carrington, sold for $475,000. In 2024, Sotheby’s sold the painting for $28.5 million to an Argentinian billionaire who founded the Latin American Art Museum of Buenos Aires, according to The Wealth Report 2025 by Knight Frank.
Such multimillion-dollar price tags are likely to draw some opportunistic investors into the art market for the first time. But advisors and art curators alike may caution investors before they buy art as an investment, as it can be a risky asset class.
Like fashion, artists and their works go in and out of style, affecting the resale value and return on investment. Art acquisition comes with considerable extra costs, such as commissions and insurance. Perhaps the greatest risk, however, is that there’s always a chance of forgery, theft or damage.
Despite these factors, art collecting has long been an appealing option for high-net-worth investors who are seeking to diversify their portfolios. Art investments can offer both aesthetic and financial value alongside the risks.
Over the past decade, artwork investments have become increasingly embraced by the wealth management industry. In 2014, only 53 percent of wealth managers believed art and valuable collectibles should be included as part of a wealth management offering; by 2023, that figure increased to 90 percent, according to Deloitte’s 2023 Art & Finance Report.
“Art can be an asset that appreciates over time, diversifies a portfolio and serves as a tangible store of value,” says Tricia Heuring, curator and coordinator of the Minneapolis-based art collection for RBC Wealth Management–U.S. “However, its real power goes beyond financial returns. A well-chosen collection can offer both personal and societal impact. For collectors and institutions alike, investing in art can be a way to shape cultural legacy.”
Art collecting has been a popular investment strategy among wealthy individuals for several decades, and its prevalence continues to grow. Deloitte estimates that ultra-high-net-worth individuals’ wealth allocated to art and collectibles exceeds $2 trillion globally.
Some investors approach art purely as an investment strategy, while others are lifelong art lovers. The key driver for buying art is its emotional value (60 percent), followed by its financial value (41 percent) and social value (36 percent), according to the Deloitte report.
Liz Jacovino, a wealth strategist at RBC Wealth Management–U.S., recommends prioritizing your individual tastes when choosing art investments. “Look for things you like and appreciate,” she says. “It may or may not end up being a great investment, but if you really enjoy having it in your collection and hanging it in one of your homes, that can be an immeasurable benefit. For most investors, it’s important to really enjoy the painting or sculpture that you’re investing in.”
Beyond aesthetics, investing in art can provide other benefits, such as portfolio diversification, inflation protection and potential for high returns, as well as cultural and social benefits. There may also be tax advantages, such as capital gains tax reduction and the opportunity to donate artworks to public institutions.
Art as an investment carries risk because it lacks liquidity, requires proper care to maintain its condition and value, and depends on provenance (ownership history) and authenticity. Like high fashion, art also fluctuates in value based on current trends.
“Unlike traditional assets, art’s value is subjective and shifts with cultural and market trends,” Heuring says. “What’s hot today may not hold the same demand in the future.”
Investors should be aware of the particular risks involved in fine-art investment, including:
Despite the risks, art can play an important role in a wealth portfolio. Consider these tips to make the most of your collection.
Art markets tend to fluctuate. One way to mitigate this risk is through a well-curated collection that becomes an asset with historical significance and not just financial worth, Heuring says.
Aim to build a collection that may accumulate historic and cultural value over time. “Art is more of a risk when treated purely as a commodity, disconnected from the artist and the communities that shape its meaning,” Heuring says. “It’s important to recognize both financial and cultural worth. Like any market, the art economy relies on a strong foundation—investing in art without investing in artists risks destabilizing the very market it depends on.”
Prioritize quality over hype, with a willingness to collect work that resonates with you personally, rather than just following market trends.
“The most compelling collections aren’t just about financial return; they tell a story,” Heuring says. “Support living artists, as their success strengthens the entire art world. Finally, remember that investing in art is also investing in culture. The impact of your collection extends beyond your walls—it shapes public conversations, supports artistic careers and contributes to a larger arts ecosystem. The best returns aren’t always financial; sometimes, they’re in the relationships you build, the communities you support and the legacy you leave behind.”
The art market is neither transparent nor straightforward, but the support of an experienced professional can help investors navigate it successfully.
“A professional advisor can help you identify and find art you like, provide insight on market trends and help you with the acquisition process, including negotiation, insurance and liquidation,” Jacovino explains. “The art world is fairly opaque with valuations and transactions, so having someone who understands the process of acquiring and caring for your collection can make it much easier.”
Investing in artwork requires expertise, patience and passion. By working with an experienced professional, taking time to research and acquiring pieces wisely, investors can be well-positioned for art’s financial and aesthetic benefits. However, due to its high-risk nature, artwork should be a part of a diversified investment portfolio rather than the sole focus of one’s financial strategy.
This article was updated in May 2025.
Investing in alternative investments may be speculative, illiquid and not suitable for all clients. They are intended for investors who meet certain criteria and are willing and able to bear the unique economic risks of the investment. Investors should consider whether such investments are suitable in the light of their individual financial situation.
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