Scott Reyburn tries to clear up some of the confusion about art as an asset by pointing out the lack of demand for art investment products like art funds. Instead, there’s a lot of focus on “speculators” or “flippers.” Which is probably as it should be. Investing in art is a high-risk business where the opportunities are few and far between and require a great deal of specialized knowledge as well as a preternatural feel for human desire. Like investing in other exotic, illiquid assets, we should probably just enjoy the spectator sport of it all.

On the other hand, Reyburn points to what may be the real bubble in the art market: advisors. Reyburn attended a few panels at the London School of Business’s annual art investment conference where he heard this remarkable statistic:

“Art is an asset, not an asset class,” said Luke Dugdale, the director of the Royal Bank of Canada’s British-based private client wealth management division, who participated on a panel at the conference. Economists define an asset class as a group of investments that behaves in a similar way in the marketplace. “If it were an asset class, the F.C.A. would regulate it,” Mr. Dugdale added, referring to the Financial Conduct Authority. “And that would kill the art world. It’s a market in which everyone can be an adviser.” Fellow panelists in Mr. Dugdale’s session suggested there are currently as many 300,000 art advisers operating worldwide.

Financial advisors must take tests. Real estate agents, the professional role that most resembles art advising (that’s a compliment, by the way,) also need to be licensed. So why not doing something about the art market to require a minimum level of knowledge about the mechanics of buying and selling art—at least—but also, perhaps, about art and art history itself.

For Art Collectors, the Risk Behind the High Returns (NYTimes.com)