May 2007

The problem with art advisers

In 2007 we observed that while most are seen as opportunistic shoppers, some are as knowledgeable as museum curators

Art fairs such as Art Basel are the arena where consultants are most prominent © Art Basel

Art fairs such as Art Basel are the arena where consultants are most prominent © Art Basel

Before every art fair, Berlin gallerist Guido Baudach gets 20-odd emails from art ­consultants, asking for extensive information on the works he’ll be bringing from his most ­popular artists. Those consultants aim to build a shopping list, allowing them to sprint through the fair with clients, finalising the purchase of works reserved in advance. But Baudach sends details of only the works he’ll definitely be ­hanging—and no images at all. Inevitably, the consultants request those images. And inevitably he tells them the work has already been packed up for transport. Combative by nature, Guido Baudach is no fan of consultants. “They come with their Gucci clothes and that perfect hair, but there’s no passion for art,” he says, before revealing—with pride—that he was personally responsible for two consultants being dropped by their clients. “I met a lot more consultants at the beginning of my career. But I guess they found out that I don’t like them, and now they stay away from my booth.”

Indeed, art fairs are the arena where consultants are most prominent. For one thing, many of their clients only parachute into the art world during fairs. And the high-speed decision-making required at fairs makes having an adviser reassuring. But it’s also a moment when galleries cannot duck the ­consultants. “Fairs are open-season on dealers for advisers,” says Glenn Scott Wright, a director at Victoria Miro Gallery in London. “We’re on the floor and totally accessible. The last two or three years, there’s been a huge boom in the number approaching us.” Finally, fairs are where the US art scene interfaces most intimately with the rest of the art world.

An American phenomenon

While there are some major European exceptions—such as the Paris advisor Patricia Marshall, who is currently building Bernard Arnault’s collection and buying for Eugenio López of Mexico City, among ­others—consulting and advising remains a ­distinctly US phenomenon. “Americans take great pride in seeing psychoanalysts, and they likewise have no problem having someone else find their art for them,” explains Manhattan ­gallerist Sean Kelly, an Englishman based in New York for more than two decades. “Also, European collectors tend to be much more self-assured in their taste—they have less of a need for outside validation.” That holds especially true in Germany, where even major ­collectors are expected to do their own reconnaissance work. “German ­collectors want to be seen as friends of the artists, participating in the intellectual and creative ­process,” notes Berlin dealer Max Hetzler. “They want to be seen as art saints, not as treating their collecting like a ­business—even if one day they might sell it off for ­millions.”

“Americans take great pride in seeing psychoanalysts, and they likewise have no problem having someone else find their art for them”
Sean Kelly, gallerist

That said, art consulting has expanded in Europe, especially in England’s financier-heavy market. The practice is particularly suited to today’s new collectors—people with far more money than time, trying to build respectable ­collections rapidly—and the range of potential advisors available to them is extensive: fully fledged firms; boutiques comprising an adviser and assistant(s); private dealers; museum curators angling for eventual donations and solo players. Likewise, the services offered by consultants have broadened. Amy Cappellazzo, Christie’s international co-head for post-war and contemporary art, observes: “I see two basic types of advisers now. There’s the old-fashioned adviser, who works closely with a collector, developing their tastes, passions and sensibility. Then there’s the new-fangled model, which developed in response to the new speed of the art world. They’re more like finance analysts, aggregating market information and presenting their analyses to the collector, who will often be consulting several different advisers.” For such clients, the goal is not developing connoisseurship, but rather staying ahead of an artist’s market curve and cashing out when it tops.

For non-speculators, too, pricing information is a crucial driver for working with advisers. “The real motivation for people hiring art advisers is fear—fear of overpaying and fear of buying bad art,” says Candace Worth of Manhattan, who went solo as an adviser in 2001 after five years of working at Christie’s. “The contemporary art ­market is an information game and it’s very ­complex to comprehend at first. I don’t understand why ­anyone new to it would buy without help. To me, paying 10% of the price for 20 years of my experience seems like a no-brainer.”

A new type of consultant—the scout

There’s another type of adviser emerging lately: the scout, whose utility derives from the art world’s rapid expansion. Because even collectors with distinct tastes, long experience and excellent relations with galleries—the type of collectors who never before needed an adviser—have a hard time keeping track of what’s afoot in the globalised art world (or in Chelsea’s 300-plus galleries, for that matter). There are simply too many emerging hotbeds for emerging artists. “In the 80s, if you’d hit the New York galleries, you’d covered everything,” points out Glenn Scott Wright. “Now it’s a global market. So even major, independent-minded collectors have people looking out for work on their behalf.” Often, such scouts do it part-time, as an incidental—if much more lucrative—activity alongside their primary position as a critic, dealer or curator.

That said, more young people are setting out to become full-time professional advisers than ever before. For those without financial backing from a parent or spouse, it offers a career in the art world that has a remarkably low barrier to entry: all you need is a cellphone, an email account, and $50 worth of business cards. There’s no need to rent space, buy inventory, produce work or curate shows. Theoretically, you need not even have any demonstrable familiarity with the art world—so long as you know more than your clients. “Some people calling themselves advisers know so little about art, it’s frightening,” says director David Leiber of Sperone Westwater gallery in New York. “They seem to just go around crashing cocktail parties and shimmying up to people who just got a big bonus at Goldman Sachs. Then they drop into your booth with these ‘clients’ and whisper, ‘Leave a little for me in the deal.’ ”

Which brings us to the structure of transactions, easily among the most contentious aspects of the art-consultant phenomenon. At its cleanest, the arrangement is straightforward: the collector pays a retainer, usually based upon the ambition level of the projected collection and the speed with which it’s supposed to be completed. Much more frequently, the consultant is paid a commission on each sale by the gallery. To the extent that there’s an industry standard, it’s 10%. But in reality, that’s just a baseline number. “With some of my artists, like Josephine Meckseper, where demand is high, the price is the price—if they want a commission, a consultant needs to work it out with their client,” says New York dealer Elizabeth Dee. “With other artists, I can be more ­flexible. But you never want to give them more than 10%, even though many consultants come asking for 15% or even 20%.”

Dee’s Chelsea colleague Edward Winkleman describes a continual conversation within his ­dealer cohort about commissions. “There’s a broad range of ‘standard practices’,’’ he explains. “We’re under constant pressure to give away more than 10%. And some consultants cite other galleries giving them 15%. So there’s a lot of discussion between galleries, comparing notes and trying to hold a line.” The problem with fluctuating commissions goes beyond the dealer’s profit margin: it also means that advisors have a financial incentive to deal more with one gallery than another, which can skew their clients’ collections toward the artists of the galleries from whom the adviser reaps the best rewards. “I’m very blunt with ­consultants—I tell them that I want to build a long relationship with them, and that commissions start when we do our fifth or sixth deal,” says Winkleman. “But I know with some consultants that if there’s no ­commission, they’re not coming back.”

Double trouble

The trickiest issue by far with commissions is “double-dipping”—when a consultants collects a commission from both dealer and collector. Technically speaking, there’s nothing wrong with this. After all, auction houses get a cut from both buyers and consigners. But when it comes to ­consulting, the client is too often left in the dark. “I’ve even seen cases of people working for institutions doing this,” says Max Hetzler. “From an ethical perspective, that’s just horrible.” When clients do find out, it can get nasty—a few years ago, several London galleries were rumoured to have been deposed by lawyers in a lawsuit filed by a client against his consultant who was fired for double-dipping (the case was settled, keeping its details secret). Usually, this gets handled more discreetly. “We realised that it was happening with one collector and we decided to tell him,” says Sean Kelly. “He was very appreciative, because he’d been hawked around town by his consultant like an idiot.” Kelly now makes certain to discuss the details of any deal up front, with both the collector and consultant present.

The trickiest issue by far with commissions is “double-dipping”—when a consultants collects a commission from both dealer and collector

Beyond the financial complications of cutting consultants into the deal, some gallerists feel ­emotionally uneasy working with intermediaries. “There are three parties in that room, which is one more than you want,” explains Dee. “When you’re having a conversation with a collector about one of your artists, you’re bringing them into your world. It’s a really important, magical part of our role. And when there’s someone there filtering that for them, it doesn’t work the same way. It can lead to a lot of second-guessing.” Nicholas Baker of London’s FA Projects says that his gallery generally tries to work directly with collectors these days. “With some major collections, that’s impossible,” he concedes. “But as a rule we want as few screens as possible when you’re trying to understand a collector’s drive. We’ve also had the issue of an advisor and client falling out just when we felt our dynamic with the ­collector had been going well.”

Veteran advisors acknowledge that the profession faces reputational issues. Advisor Mary Zlot of San Francisco has worked for more than 20 years, for prime corporate clients such as Charles Schwab and Kohlberg Kravis Roberts and many major private collectors, assembling bodies of work she intends to be eventually destined for museums. Among the dealers who do business with her, she is considered a paragon of her profession. Yet when she meets someone new in the art world, Zlot steels herself for a negative reaction: “When you tell people you’re an art adviser, they often look at you like you’re some sort of fly-by-night carpetbagger or an interior decorator.”

“When you tell people you’re an art adviser, they often look at you like you’re some sort of fly-by-night carpetbagger or an interior decorator”
Mary Zlot, adviser

Whatever their complaints, of course, gallerists continue to work with consultants and advisers—and there are usually a handful they praise as exceptional. “At the highest level of advisers are people such as Alan Schwartzman,” David Leiber says. “He’s as fast and as smart as any museum curator, forming great collections.” Elizabeth Dee considers Thea Westreich’s patronage “indispensable”. Max Hetzler cites London’s Polly Robinson-Gaer and several dealers interviewed for this story praised Candace Worth. Even Guido Baudach has nothing but praise for Patricia Marshall, saying her passion for art often outstrips that of collectors.

Building these kind of relationships with ­dealers gives advisers the sine qua non of their business: access to prime pieces. “What frustrates people is that the art world is not egalitarian,” says Zlot. “New collectors go to a fair, see ­something they like and are told ‘It’s on hold.’ Well, it’s on hold for me. I know it’s not fair, but people like me who have long relations with a gallery get to buy works first.” Such trust allows the adviser to vouch for clients, assuring the ­dealer that the works will be loaned for museum shows and offered back to the gallery rather than being “flipped” into auction sales. “My ­reputation goes on the line with every deal,” says young New York advisor Lowell Pettit. “So a lot of the job is teaching people the etiquette of the art world and explaining what’s expected of them as collectors.” Some learn the lesson better than others—one consultant, who had bought from a major New York gallery for years, was suddenly frozen out by its imperious founder, because a single work purchased by an unscrupulous ­collector was sold at auction a year later.

At a broader level there’s also the issue of a ­consultant’s personality overwhelming the client’s. “These consultant-driven collections can often be uninteresting,” Leiber observes. “There are no mistakes, but the pieces are just a reflection of hot auction markets and current taste.” Granted, some advisers do steer clients toward the avant-garde, but that’s not generally the best business strategy. “Their job is to get stuff into the house and up on the walls, which makes many consultants really risk-averse,” Dee says.

“Too many of them are going for the easy stuff, just feeding the art-market machine.”

Long term, that bodes badly for such collections, both aesthetically and financially. Because if art market history make one thing clear, it’s that the best investments are not to be found among today’s hottest artists. As Guido Baudach points out: “If you had sent an adviser to Cologne in the 80s, he would have told you to buy Rainer Fetting or Helmut Middendorf—but not Martin Kippenberger.”