INTRODUCTION TO THE ART ADVISOR
Recent years have seen a broader role assigned to the highest level of advisors as UHNWI collectors seek advice not only in regard to buying and selling, but in navigating the complex financial and legal implications of high-value estates and increasingly restricted access to top-draw artworks.
To become a signifcant collector requires not only ready cash, but also that most elite preserve of the high art world: industry connections. For many, a private advisor functions as a nexus to the discrete, elite circle at the top of the market, and thus a chance of acquiring the most heralded, highest value artworks before they openly enter the market. At this level, the power dynamic of the buyer and seller is reversed as collectors compete to secure the most prized works, and the strategic role of galleries in the accumulation of an artists’ financial and cultural value comes to the fore. As galleries seek to avoid buyers who might “flip” the artwork (swiftly resell it at profit), the savvy advisor will understand how to present their client as attractive buyers, often making use of the institutional promise as a key bargaining chip in the competition to acquire.
For an artist or artwork to be included in an institutional exhibition or permanent collection is to reach the zenith of cultural value, and to enter the art historical canon – so it is little surprise that financial value will rise accordingly. As publicly-funded organisations, few institutions have the capacity to purchase major artworks independently, and so the institutional promise works for the artist or estate – whose profile will be raised; for the selling gallery – who don’t lose out on re-sale profits; for the collector – who builds value into their collection through loaning or gifting to an institution; and to all three, as financial worth rises exponentially.
Mega-collectors, however, may seek to shortcut this process by simply founding their own institution. Indeed, 70% of all international private collection museums have been founded since 1995, as the various legal and financial benefits of becoming public have been increasingly recognised amongst the top level of art collectors. Charity status not only affords tax deductions, but an astute means of legacy management. Collectors are free to appoint family members to the board, apportion them a salary and stipulate that they retain their position, thus cementing their inheritance whilst avoiding inheritance tax. Again, it is often the art advisor that will spearhead the process of turning a private collection into a public institution on behalf of their client, and even come to assume a directorial position once the organisation is established.
As such, the new generation of art advisors independently present the services, expertise and connections of traditional advisories and must combine curatorial and commercial nous with specialised legal and financial proficiency. Most such advisors emerge from senior positions within galleries or auction houses, through which they have built a network of serious collectors and industry connections, and an existing profile within the industry.
It is hardly surprising, given the money and prestige involved with collectors at this level, that major galleries and auction houses are bringing advisory services in-house, and building teams dedicated to the management, conservation and appraisal of collections and estates. This trend reflects not only a market weighted towards a small circle of collectors operating in the highest echelons of the industry, but also to a more general trend towards consolidation (and arguably, homogenisation), as arts businesses move to become ‘one-stop-shops’ catering to their clients’ every need – a wider movement reflected in most areas of modern commerce.