Investing in art using an art broker

heather.lawson343

Hi all, does anyone have any advice or experience of investing in art and using a broker to select the art?
A company Frederick Charles buy art from artists (dead and alive) and hold a portfolio that they then sell onto  investors. They pay for storage and insurance for the first 2 years and there is protection up to £80000 ( their version of FSCS).  The brokers take commission on the profits when they sell the art at auction at your request.  As most investments are  better long term I was wondering would this be any good for me. I have £20000 currently sitting in a cash ISA doing abysmally, but will need access to this money within 2 years. This is my husband's money, but he has dementia and is self funding in residential care and I hold power of attorney. Problem is that the chap I have spoken to seems to make perfect sense and the comparables they have shown me have all done very well, but then basically he is a trained sales man and they wouldn't show bad sales. We do have more savings, (although they have dropped considerable over the last few weeks) and once this money is gone,(assuming my husband survives corona) the council will then pay for a reasonable chunk of his care.
Any views or advice would be most gratefully received. 

bowlhead99

heather.lawson343 said:

 and there is protection up to £80000 ( their version of FSCS).   

This is nonsense. The FSCS is funded by the entire regulated financial services industry (an industry with many trillions of pounds of cash and assets under management and administration) and has the ability to temporarily borrow unlimited funds from UK Treasury to cover payouts for, e.g.

-  customers who lost their deposited savings in the event of a bank failure, or;

 - investors who were provided unsuitable advice by a regulated adviser or suffered a fraud by a regulated fund manager or administrator that subsequently went bust.

There is no such equivalent scheme as well-funded by the UK art industry to ensure you get fully compensated by rogue art advisers if they buy you something unsuitable that turns out to have no ready market at the price you paid, or which has access to unlimited government funds in the case that your art is mis-administered or stolen or burnt down when adequate insurance was not in place for the crime or error that led to the loss.

 will need access to this money within 2 years.

You need the money in two years but are considering letting someone else tell you what art to buy with it in the hope that in less than two years time the demand for a particular piece will be sufficient to have it bought from you at auction so that you definitely get at least as much money back after auction fees and commissions than you had paid for it this month.

That's a pipedream.

Any views or advice would be most gratefully received.

Walk away from the salesman, quickly.

This is my husband's money, 

 he has dementia 

 I hold power of attorney

You know that as attorney you have to act in your husband's best interests, right? That doesn't include indulging in crackpot schemes with risk of total loss.

It's no defence to say that your decisions are no worse than the decisions that a dementia patient would have made for themselves.

Gary1984

I'm very sorry to hear about your husband and I can't imagine how hard that must be for you. But if you go through with this you're basically !!!!!! away his money. If you need it within 2 years then cash savings or premium bonds are your only real options. You did the right thing to ask on here about this 'investment' and I hope you listen to what people say as nobody on here will think this is anything less than madness. 

Alexland

This really doesn't sound appropriate and has a fair probability of being an outright scam. I suggest you cut off all contact with whoever is trying to sell you this as they might be slick enough to further persuade or pressure you.

Close shave, good job you asked here.

kinger101

(a) their guarantee isn't worth a penny, I'm sure.
(b) if you need the money in two years, cash is the only suitable place
(c) your should behave responsibly if you have POA.  It's not your money to risk.
(d) of course the bloke sounds like he "makes perfect sense".  Because his job is reeling in gullible folk. 
(e) If he could really make a profit investing in art, he'd be doing it with his own money rather than looking for gullible folk.
(f) advice is run away

Clive_Woody

Block the salesman's number and never speak of this again. Only one person will profit from this and it will not be you.

kangoora

My view, you would be completely barking mad to invest in this.

FreeBear

If you want to invest in "art", buy something that you like. If it increases in value, good for you. More likely it won't, but at least you have something that you can enjoy.

Art is a fickle taste and subject to swings in popularity. It is also an area populated by charlatans and smooth talking con salesmen.

Malthusian

We do have more savings, (although they have dropped considerable over the last few weeks) and once this money is gone,(assuming my husband survives corona) the council will then pay for a reasonable chunk of his care.

Not if you lost his money in this, in which case you would be liable for abuse of the Power of Attorney and you would have to pay his care fees.

Old_Lifer

In my opinion,  never buy a 'collectable'  unless you really do have a good knowledge of the market for that kind of thing.  It is all too easy to pay-out thousands for an item and later when you want to sell, find it fetches only a few hundred or even that no one wants to buy it at all.

Ciprico

never invest in anything with legs, wheels, or, err, a frame !!!