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7 October 2020Canvass the Experts
A new breed of specialist adviser can provide a valuable service for those looking to invest in art
L ucian Freud’s death earlier this year has triggered a flurry of activity around London galleries and auction houses as some of those who own paintings by the German-born artist grandson of Sigmund look to find suitable buyers for their works of art.
Art is famously a matter of taste, and one person’s masterpiece can leave another unmoved, but what is certain is that it has become a high-profile business in recent times, and one that has latterly seen the appearance of a new breed of consultant, the art adviser.
Art as business is by no means a new development. Speculators have existed in the art world since at least the mid-17th century when the Dutch ‘Golden Age’ market came crashing down following a spate of buying and selling. In more recent times, the financial services sector boom of the 1980s triggered a modern round of speculation that turned London into an art world hub.
Today, there is a veritable army of art advisers available to novice and experienced collectors alike. Effectively, they act as intermediaries between purchasers, dealers and galleries. And in a world where some buyers can benefit from a little additional expertise, they can act as an import safeguard against misguided or impulsive purchases.
‘The rationale,’ says adviser Rachael Barrett, founder of London art consultancy Three Sixty, ‘is that it makes sense to engage an art adviser rather than approaching galleries direct, because a gallery is just going to try to sell art by the artists it represents. A good adviser should not only be able to find material from particular artists, but should also do so by using a number of galleries.’
Some collectors – depending on how new they are to the market – keep art advisers on permanent retainers, while others prefer to engage such consultants only on a case-by-case basis. Those with a full-time consultant on board will often be those who are building large collections that they may ultimately intend to pass on to a museum. Or they could be actively collecting pieces from a specific period and therefore require an expert to maintain a constant eye on the market.
‘Contemporary art is not a hedge. It operates more like a stock market – it can be quite volatile. People seek security in the Old Masters. And the antiques market is a bit of a hedge.’
Alternatively, clients employing full-time art advisers could be outright speculators – aware of the potential of art as an investment and keen to employ a professional to help ensure they are ahead of the curve. Says Barrett: ‘If you are looking to spend £60,000 a year on art, then you are not going to want to retain an art adviser for £10,000 a month. But if you are spending £6 million a year in the art market, then you might consider it.’
‘The minimum expenditure to make it worth getting an art adviser on board would be $25,000,’ agrees Ray Waterhouse, co-founder of Fine Art Brokers, a leading firm of art advisers linked to the Waterhouse & Dodd international art dealership that has galleries in London and New York.
He adds that it is understandable that new buyers are unsure about art consultancy and points out that it is important for advisers to spend time with a new client to assess taste and budget.
‘It is possible that people might not really know what tastes they have, so you go through catalogues and artists’ works to find out on a basic level whether they want to collect, for example, impressionists or contemporary art. And then within those relatively large areas, you move into nationality, subject or style.’
Having defined what a client might wish to collect, art advisers then set about scouring the market for suitable works through their connections, such as private dealers and auction houses. Indeed, if they choose, clients can take a back seat, because their advisers can always email images of recommended pieces for consideration. However, advisers generally suggest clients visit dealers and galleries in person, but accompanied by their consultant.
‘The minimum expenditure to make it worth getting an art adviser on board would be $25,000.’
Essentially, an art adviser acts as a guide through an array of potential pitfalls. ‘One of the most common mistakes is to buy too many small items with no connecting theme or style,’ warns Waterhouse. ‘I don’t think you should have paintings all by one artist or in one style, but there should be some connecting theme, however tenuous it may be. One of the main pitfalls is that people enter the market without any preconceived idea of where they want to end up in two or three years.’
A crucial function of art advisers is having the ability and confidence to tell clients when to say no. ‘People can get bitten by the art bug and want to buy things without due care and attention, adds Waterhouse. ‘If they like something, we could say: “Did you know this came up at auction three years ago and it had a hole in it that has now been repaired?” They wouldn’t otherwise have known that.’
Barrett also flags up the growth of so-called ‘runners’ in the art market. These are quasi-brokers, who are several layers removed from both the artwork being sold and the potential clients. ‘This is something that happens with every luxury asset,’ she says. ‘They [runners] will turn up saying, “I know someone who’s got a Monet,” or alternatively, “I know someone who wants one.”’ She says several legal cases are brewing in which an art owner has sold a work that he thought had been valued at, say, £4 million, only to find that an eventual buyer actually paid double that price. ‘There has been a daisy chain of people in between all taking cuts,’ she adds.
Iain Robertson, head of art business studies at Sotheby’s Institute of Art in London, is however slightly lukewarm on the idea of employing art advisers. He describes consultants as, ‘basically running around on behalf of a collector client chasing up objects and trying to bid for them or get them from dealers at a good price.’
Many investors view art – especially works by established artists who have been dead for at least 50 years – as a safe haven investment on a par with gold
While he accepts there are some very good consultants, he says: ‘On balance I’d say they don’t have the inside knowledge and sheer longevity that the dealers have.’ But he adds: ‘Consultants particularly play their role in the contemporary market, which is more obviously an unknown quantity.’
Interestingly, the shock caused to global economies by the financial crisis in 2008 has not damaged the art market. Many investors view art – especially works by established artists who have been dead for at least 50 years – as a safe haven investment on a par with gold.
‘It is a bit of a hedge,’ adds Robertson, ‘but only a particular kind of art. Contemporary art is not a hedge. It operates more like a stock market – it can be quite volatile. People seek security in the Old Masters. And the antiques market is a bit of a hedge.’
Indeed, there is almost much interest currently surrounding Ming and Qing Dynasty ceramics as Chinese buyers look to repatriate imperial-era pieces that had been sold abroad.
Indeed, Barrett sees some good coming out of the wider recession for the art world. ‘The market is still active,’ she says, ‘but you have to work a bit harder, and, frankly, it has cut out a lot of the time wasters who were playing at speculating, but weren’t committing in the end. Most of them have disappeared over the last couple of years.
‘Art went through a bit of an populist phase – in the mid-2000s everyone wanted to be an artist. The recession has curbed a bit of that enthusiasm, which I don’t see as a bad thing. Even the fact that quite a few galleries have shut – well, maybe those galleries should have shut. Maybe they were showing items that weren’t particularly good.’
He adds that it is understandable that new buyers are unsure about art consultancy and points out that it is important for advisers to spend time with a new client to assess taste and budget.
‘It is possible that people might not really know what tastes they have, so you go through catalogues and artists’ works to find out on a basic level whether they want to collect, for example, impressionists or contemporary art. And then within those relatively large areas, you move into nationality, subject or style.’
Having defined what a client might wish to collect, art advisers then set about scouring the market for suitable works through their connections, such as private dealers and auction houses. Indeed, if they choose, clients can take a back seat, because their advisers can always email images of recommended pieces for consideration. However, advisers generally suggest clients visit dealers and galleries in person, but accompanied by their consultant.
Words: Staff
The Facts
Art advisers cater to a wide variety of clients with a vast range of tastes, so it is difficult to paint a picture of a typical buyer. However, they tend to break down into three distinct categories.
The magpieThe collector who is attracted to almost anything and who is described in the art world as ‘trophy hunting’. Often they might buy some good or even great works, but there is often limited coherence to their collections.
The minerThese are buyers who collect very deeply in one area. They tend to sell rarely as they are extremely committed to their collections.
The speculatorA collector who only buys to sell. In the art market they are often said to be ‘flipping’ works.