Is Masterworks Legit?

Jeremy BiberdorfBy: Jeremy Biberdorf

March 14, 2023March 14, 2023

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With the rise of alternative investments, more and more investors are beginning to explore a variety of new and different markets ranging from real estate to cryptocurrency. One of the newest and most exciting investment opportunities lies within the art world, where potential investors can take advantage of unique and limited offerings.

One platform making waves in this space is Masterworks, an online platform that allows investors to purchase fractional shares in iconic artwork. Founded in 2017 by Scott Lynn and Chris Mitchell, Masterworks provides a revolutionary way for investors to access the artist markets with minimal financial risk. But is Masterworks legit?

In short, yes. Masterworks has been rated 4.8 out of 5 stars on the iOS App Store with 735 reviews. It has also been featured in well-respected publications such as The New York Times, CNN, CNBC, Forbes, and WSJ.
Learn More About Masterworks

Company Overview

Masterworks is a legitimate company that offers fractional shares of high-value contemporary artwork to investors. Founded in 2017 by Scott Lynn, the company has grown exponentially to now having over 200 employees. As you can imagine, accomplishing such a feat in such a relatively short amount of time means they are doing something right!

Masterworks offers a wide range of artwork from some of the world’s most respected artists—including Monet, Picasso, Klimt and van Gogh—which are categorized as “blue chip” art (a term synonymous with high quality). To ensure only top-tier assets are purchased through the platform, Masterworks conducts extensive research on each piece before adding it to its portfolio. Each art piece is then filed with the SEC to make the art a qualified investment, which allows for acceptance of retail and accredited investors. Once added, prospective investors can view the offering circular or make their own purchases by visiting its marketplace page.

The buying process on Masterworks is simple and straightforward. Potential buyers can review artwork descriptions along with historical purchase price performance before deciding to invest or not. Additionally, all necessary documents such as offering circulars are accessible—making it easy to make informed decisions about investments.

For those who need more information about a particular work of art before deciding whether or not to purchase shares can also benefit from its educational resources which include webinars and articles on topics ranging from financial advice to researching an artist’s market history. This is especially helpful for those unfamiliar with investing in art who may need help understanding how each piece increases or decreases in value over time.

Beyond educational resources—which you can find in our full-length review—Masterworks’ technology-driven platform leverages the power of blockchain to track, manage, and protect its investor’s assets; helps them set target investments thresholds; offers portfolio diversification; and utilizes an order filling algorithm for faster liquidity when needed. On top of this technology driven approach, Masterworks also charges two fees: a 1.5% annual management fee paid in equity form; and 20% future profits fee when sold–allowing them to remain profitable while still providing immense value for its clients .

Third Party Reviews

When you take into consideration everything that Masterworks has to offer–from educational resources to technological advances–it’s easy to see why so many have come to trust it as one of the most reliable platforms for investing in artwork available today. With A+ accredited by BBB coupled with people behind it having decades of collective experience in venture capital & financial services combined with their technology driven approach makes investing with them a safe & reliable option for anyone looking at investing in artwork & blue chips without requiring huge bankrolls & complex paperwork normally associated with such investments.

As we mentioned earlier, the Masterworks app on iOs is rated a 4.8 with over 700 reviews! Not to be understated for any financial related company!

Here are a few reviews from users:

Masterworks has submitted a filing to the SEC for approving artwork as an eligible investment, thus allowing retail and accredited investors alike to invest.”Was doing a lot of reading on art and diversification, glad to see there is an app for everything lol. Had a smooth experience signing up, they have a really helpful team, and my account manager knew his stuff.”
“This isn’t so much a review as it is an expression of gratitude. In a year in which the market, and the majority of other asset classes, have seen substantial losses, it is nice to see your diligence in managing offerings turn a consistent positive yield.”

Is Masterworks Worth it?

Is Masterworks worth it? Absolutely. Masterworks provides investors with the opportunity to diversify their portfolio with fractional shares of contemporary artworks, a unique asset class that not many other platforms offer. With an average realized net return of 17.8%, Masterworks’ investors have seen a strong return on their investments. What’s more, the platform’s two fees are straightforward and low: a 1.5% annual management fee and a 20% cut of profits from sales of the artwork.

Masterwork is the first to point out, the returns on contemporary art since 1995 have been extremely attractive compared to more “traditional” asset classes. Contemporary art boasted returns of 13.8% over that time period, compared to the S&P 500 10.2%, real estate’s 8.9%, and Gold at 7.2%. When you look at these historical averages, as well as the actual performance that Masterworks has been able to realize, it’s hard to not be impressed.

Furthermore, Masterworks allows users to trade shares on a secondary market, meaning you can cash out your shares whenever you want. This is a seemingly small feature, but addresses a major flaw in typical blue chip art investing, which is lack of liquidity. With the access to secondary markets based on the method of fractionalization, the barrier of entry is drastically reduced! There is a great piece of mind that comes with knowing if you have to sell your position in the art, you have the ability to even before Masterworks sells the art.

If you’re looking for a unique and exciting way to invest, Masterworks is the perfect choice. With their experienced research team and competitive fees, this platform is your ticket to a diversified portfolio and a promising return on investment. That said, it’s important that any investment decisions meet your individual investment objectives such as time horizon, and tolerance for risk; and understand there is a risk of loss. Also, historical price performance is not indicative of future outcomes and this is not specific investment advice.

Final Thoughts – Is Masterworks Legit?

Masterworks is absolutely a legitimate and reliable platform for investing in artwork, and providing an immensely valuable solution. It has been featured by major publications, rated highly, and offers a number of features to help investors make informed financial decisions. With its own research team, filing with the SEC, and offering fractional shares starting at $20 per share, Masterworks is an excellent option for those looking to diversify their portfolio or invest in the art market. Click here to get started with Masterworks today!

Get Started With Masterworks

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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