Buying and selling fine art has long been a niche investment area. Previously only accessible to the wealthy, Masterworks is a US-based platform that lets investors around the world invest in works of art.
Beginner and experienced investors alike can buy stocks in art securities without directly owning or storing artwork. Masterworks researches and buys art assets, sells fractional shares in those assets to investors, then sells the artwork and distributes the proceeds. Investors can buy and sell their shares like they would with similar securities.
Masterworks does the hard work, so novice investors can buy in even if they’re not very familiar with the art world.
Consider Masterworks if you want to invest in fine art and you are okay with above-average risk.
Look elsewhere if you have a low tolerance for risk or don’t want to wait 3-10 years to receive your profit.
How easy is it to use Masterworks?
Investing in art with Masterworks is about as easy as opening a bank account and making your first deposit. You’ll need to provide your personal information like your name, address and banking information. You’ll also need to put up an initial deposit.
There is no minimum deposit required to open an account. Masterworks representatives work with investors individually to settle on your ideal investment amount based on your goals. You can invest as little as $20 USD into a piece of art. Masterworks also requires a phone interview to approve your application.
Once your account is open and funded, you can browse a broad selection of artwork on the Masterworks website and buy stocks.
Is art a good investment?
Art can be a good investment, but it involves a high risk of loss and a high potential for gain. As is the case with investing in stocks, investors in fine art should have a high tolerance for price fluctuation both short- and long-term.
According to Artprice, the average annual return for its blue-chip art index has been higher than 30% since it began tracking prices 20 years ago. But keep in mind that this is an average. Some pieces of art could have appreciated at a faster rate, while others could have produced much lower—or even negative—returns. There’s no guarantee that you’ll see positive returns.
Blue-chip art refers to artwork that is expected to retain its value, and has the potential for future growth. Generally, blue-chip art includes piece by well-known artists you’d see in museums. Examples include masterpieces by artists such as Andy Warhol and Claude Monet.
Masterworks pricing and fees
Masterworks charges a management fee of 1.5%, which is comparable to management fees charged by professional investment advisors. Masterworks also receives 20% of future profits made from selling the art. This commission is expensive but is comparable to what a hedge fund may charge its investors.
Minimum Investment
None
Fees
1.5% annually, plus 20% at sale
Investment time frame
Typically takes 3-10 years to receive your proceeds
The 1.5% management fee covers professional storage, insurance, administrative costs, regulatory filing and annual appraisals.
Is Masterworks legit?
Headquartered in New York City, Masterworks was founded in 2017. As an investment company, Masterworks qualifies its art with the Securities Exchange Commission (SEC), a US government entity that protects the interests of investors. Masterworks is registered with the Better Business Bureau (BBB).
Masterworks reviews and complaints
Since Masterworks hasn’t been operating very long and their artwork typically requires a 3- to 10-year holding period, the company’s track record is insufficient to capture the full user experience. As of November 2020, it has zero complaints with the BBB and only one review on Trustpilot with a score of 2.8.
Negative customer comments about Masterworks are generally complaints about difficulties communicating with company representatives, high fees and long holding periods on the art.
Masterworks pros and cons
Pros
Invest in fine works of art without directly holding or storing artwork.
Potential for long-term growth of capital that exceeds the stock market average.
Access to prevented fine works of art without the need for expertise in the art industry.
Cons
High management fee and commission.
3- to 10-year waiting period to receive profit.
Interview required to receive an invitation for membership.
How do I sign up?
To sign up for Masterworks, the process requires just a bit more effort than opening an account with a bank or brokerage firm.
Visit the Masterworks website.
Request an invitation to join.
Conduct a phone interview.
Open a trading account.
How do I contact Masterworks support?
Masterworks can be contacted by phone or email. Visit the company’s website at www.masterworks.io for more information.
Compare alternative stock trading platforms
If you’re not sure whether investing in art is the right option for you, consider other investing options. These platforms can help you create and manage diverse portfolios of stocks, bonds and funds. Check out our guide on opening a stock trading account to learn more.
1 - 4 of 4
Bottom line
If you want to invest in art but don’t know where to begin, Masterworks offers a platform where you can start investing without any prior knowledge of the art industry. Keep in mind that investing in art can be riskier than the stock market but potential returns can also be higher. If you are more risk-averse, explore more investing options.
Frequently asked questions
Since the Masterworks team consists of art experts and advisors, investors do not need any prior art knowledge to invest.
You choose from among a preselected portfolio of artwork that has been vetted and purchased by Masterworks experts.
There is a hold requirement on art for 3-10 years before artwork is sold and profits are distributed to shareholders. If you need to make a withdrawal before the holding period, you can sell your stocks to other investors in a secondary market.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.
Kelly Suzan Waggoner is editor-in-chief at Finder, where she works with a talented team of expert writers and editors focused on helping readers to save money, earn money and grow their wealth. She joined Finder in 2016 as an editor, germinating the site from money transfers to include the wide scope of personal finance.
Kelly has worked with publishers, magazines and nonprofits throughout New York City to develop best practices around editorial, SEO, plain language and accessibility, including Black Dog & Leventhal Publishers, HauteLife Press and Queerty. She is quoted on such sites as Lifehacker and CertifiKid, and ghostwrote Copyediting and Proofreading for Dummies, published by Wiley.
Kelly earned a BA in English from Russell Sage College and a Poynter ACES Certificate in Editing from Poynter News University. She is trained in digital and website accessibility and plain language, and is a member of ACES: The Society for Editing and the Center for Plain Language. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma’s world domination.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Advertiser Disclosure
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
