Are you considering investing in art through Masterworks, but worried about whether it’s a scam or not? With so many investment platforms out there, it’s crucial to verify the legitimacy and reliability of the platform you choose.
You don’t want to risk your hard-earned money on a scam or an unreliable platform. In this article, we’ll dive deep into Masterworks to determine its legitimacy and whether it’s worth your investment. So, let’s get started and find out if Masterworks is the real deal!
Company Background
Masterworks is a unique investment platform that allows investors to buy shares of high-end art pieces. The company was founded in 2017 by Scott Lynn, a long-time art collector and entrepreneur. Masterworks purchases blue-chip art from established artists and then allows investors to buy shares in these artworks as an alternative asset class.
The company is headquartered in New York City and has more than 20,000 registered users. Masterworks prides itself on its transparency and is registered with the U.S. Securities and Exchange Commission (SEC). Moreover, the platform has extensive information available on each of the art pieces available for investment, including artist bios, public sales records, and more.
Investing in Art Through Masterworks
Masterworks offers a unique approach to investing by allowing its users to purchase shares in high-end art pieces. When you invest in a piece on the platform, you’re buying a fraction of that artwork, similar to owning shares in a company. The minimum investment amount on Masterworks is $1,000, and it charges a 1.5% annual management fee, plus a 20% performance fee upon the sale of the artwork.
The investment process on Masterworks can be summarized as follows:
- Create an account: Sign up on the Masterworks website and complete your user profile.
- Browse available artworks: Review the available art pieces and select one to invest in based on your preference and research.
- Purchase shares: Specify the number of shares you’d like to buy and complete the transaction.
- Monitor your investment: Track the performance of your art investments through your user dashboard.
- Exit your investment: When the artwork is sold, you’ll receive your share of the sale proceeds, minus any fees.
Masterworks claims that the high-end art market has outperformed the S&P 500 in overall returns over the past two decades. However, it’s essential to understand that investing in art carries risks like any other investment, as there’s no guarantee that the artwork’s value will appreciate over time.
Pros and Cons of Investing with Masterworks
Pros:
- Access to high-end art investments, which are typically reserved for wealthy collectors.
- Art can serve as a diversification tool in a well-balanced portfolio.
- Art often has low correlation with traditional financial markets, providing an alternative hedge against market volatility.
- Detailed information on artwork investments strengthens decision-making for investors.
Cons:
- Art investing is a relatively illiquid asset class and may not be suitable for those who need quick access to their invested capital.
- High fees: A 1.5% annual management fee and a 20% performance fee upon the sale of the artwork.
- Limited investment options, as the platform focuses solely on high-end art.
- A relatively new platform in the world of investing, with comparatively shorter track records.
Refuting Negative Customer Reviews
One negative customer review states the following:
SCAM!!! If you work for this company, QUIT. Unless you enjoy committing fraud. Awful user experience, cannot get your money out after you invest, no disclaimers. Also, their whole company runs on illegal business practices and steals data, not only yours but the artists, it is so obviously bulls*.
It’s important to keep in mind that this is one individual’s perspective and may not represent the overall experience and service provided by Masterworks. Let’s address the concerns raised in the review:
- Awful user experience: It’s worth noting that user experience is a subjective matter, and thousands of other users may have had a positive experience on the platform.
- Cannot get your money out after you invest: Art investing is a relatively illiquid asset class and, as stated earlier, may not be suitable for those who require immediate access to their funds. This doesn’t make the platform a scam; rather, it underscores the need for understanding the nature of the investments made through the platform.
- No disclaimers: Masterworks has a comprehensive FAQ section on its website, covering various aspects of art investing and addressing potential risks and concerns. Specifically the concerns mentioned in this review.
- Illegal business practices and data theft: Masterworks is registered with the SEC, implying adherence to regulatory requirements and mandatory disclosures, countering claims of illegal practices.
Like almost all products and services, particularly in the investing space, negative reviews are nearly unavoidable. Click here to take the other perspective, and view the overall positive reviews and ratings earned by Masterworks.
Security and Privacy
Masterworks takes security and user privacy seriously, implementing several measures to protect users’ information and financial transactions.
- Encryption: Masterworks uses bank-level encryption to safeguard user data and financial information.
- Two-Factor Authentication: The platform offers two-factor authentication, adding an extra layer of security during login.
- Privacy Policy: Masterworks has a transparent privacy policy outlining how it collects, uses, and shares user information. The company does not sell user data to third parties.
Final Verdict – Is Masterworks A Scam?
After evaluating Masterworks’ background, investment options, pros/cons, and security measures, we can conclude that Masterworks is not a scam. The platform offers a unique investment opportunity by allowing users to invest in shares of high-end art pieces, providing potential portfolio diversification and an alternative asset class.
Click here to get started with Masterworks today.
However, it’s crucial to conduct thorough research and understand the inherent risks before committing to art investments. Art investing is not for everyone and may not be suitable for those seeking liquid investments or wanting to avoid high fees.
If you’re still unsure if Masterworks is a scam, you might want to check out First National Realty Partners.