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| Best Practices: Banker's Agenda |
Art and Commerce
Regan Good
10/01/2004
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Hoeveler
counters that Citigroup’s advisory service keeps its client numbers small to
ensure that their collections get the attention they need. “We handle far less
than 1 percent of the Citigroup Private Bank’s clientele (approximately 25,000
to 30,000 strong), and with a 10-person staff, we are still very busy.” On the
other hand, JP Morgan does seem thinly stretched. The bank estimates that 25
percent to 30 percent of its private banking clients use the art advisor
services, be it for a one-off advisory on a particular painting or for a more
extensive project like the organization and curatorship of an exhibition.
Gonzalez works with Jessica Burne Davis, a banker who joined the art advisory
group in 2001. The two of them, plus two part-time consultants, take care of the
entire client list.
Hoeveler concedes that some clients at Citigroup prefer
to use the bank’s services for simple transactions or simple research questions,
rather than to rely on the company to support and guide their total collection.
“Some of our clients are extremely knowledgeable, well-established collectors
themselves who are on museum boards, who just like the convenience of our
representation,” she says. “They’re busy, and can’t cover all the auctions and
the galleries and do the research themselves. They like having additional eyes
and ears in the marketplace on their behalf. They also like being able to pick
up the phone or pop us an email to get a work added to their insurance policy,
or shipped or framed, or to have a conservator sent in.”
Hoeveler adds that
some collectors prefer a more anonymous intermediary, like a bank, than a highly
visible private art consultant. “Our customers like the anonymity; all
transactions are conducted through us and in our name so their privacy is
assured,” she says.
Karl Schweizer, head of USB’s European art advisory
division, says that a third of his clients are sophisticated art collectors who
like to use the bank’s services for quick questions. “They like to double-check
with us to compare prices, get some ideas from us or give a search mandate to
find a certain painting or sculpture.” Even skeptics concede that private
banking art services provide a good appraisal system.
While some collectors
spare no expense when it comes to their collections, one benefit of using a
bank’s advisor is that fees are nominal. JP Morgan charges clients per
transaction (say, each time a work is purchased, cleaned or appraised), or
clients can pay a retainer for larger, more sustained projects such as total
collection management. Citigroup offers a choice of contracts that reflect the
amount of work required over a given year. Since these art services are not a
substantial revenue source for the banks, clients can have more faith in the
firms’ objectivity. Unlike art dealers and consultants who receive commissions,
the bank has no vested interest in selling or buying, or promoting particular
artists or galleries. The absolute objectivity a bank provides is perhaps its
greatest asset.
Disparate Approaches
Not all private bank art advisory departments offer
the full service that JP Morgan or Citigroup do. Many firms, including Neuberger
Berman and Bank of America, offer loans collateralized by art collections. Also,
there is no correlation between a bank’s own art collection and its art advisory
services. The curator of Neuberger Ber-man’s corporate collection, Michael
Danoff, might look at a client’s collection as a favor, but his job description
is to manage the bank’s own collection.
Deutsche Bank, another firm with a
huge corporate collection and a small art advisory, confines its work to acting
as a vetting service for collector-clients. Thomas Delavan, who runs that
business, knows the art world and had a career at Sotheby’s before he entered
banking. He also was one of the founding members of the Gramercy International
Art Fair, which is now the Armory Show in New York. Delavan talks with Deutsche
Bank’s clients about what they have, what they need and what they want for their
collections. He then introduces them to the right art experts on the outside.
If we bank with a firm that has a comprehensive art advisory service, our
choice as to whether to stay in-house or hire an outside consultant might
require some soul searching. Though the structural differences between the two
types of consultancies might be negligible, says Allan Schwartzman, a private
art advisor, personality issues might be a factor. “There will be personality
differences from advisor to advisor, and this is something that needs to be
remembered. I go on lengthy art-buying vacations with my clients, and you really
need to have a good working relationship, as well as a personal connection, when
you spend so much time with someone,” he explains. Another advisor (who wishes
to remain anonymous) suggested that, in the ever-social art world, who you know
can count a great deal. “Being seen with a Thea Westreich, for example, will no
doubt make a lot more of a splash than being seen with, say, me,” this advisor
says. But for those of us who wish to collect under the radar, a private banking
advisor with experience, expertise and discretion may be just what we
need.
Photograph by Artists Rights Society (ARS), New York/VG Bild-Kunst, Bonn.
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