Art advisors can be a valuable partner to both collectors and your gallery business.  As with many players working in the art world today, there are good and bad art advisors.

Here I want to talk about:

• What to look for in an art advisor
• Recommendations for creating a gallery policy for working with them
• How to set expectations
• Maintain a productive working relationship

The art advisor/consultant profession is not new, but it has grown in the last few decades as the art market has expanded, and the number of collectors, especially high-net-worth and young collectors, has increased.  With that growth, art advisors could play an essential role in the art market and work in harmony with gallerists.

However, some with very little knowledge of art history or connoisseurship get into the business solely for the glamour and money.  They usually give bad or less comprehensive advice to their clients and could be harmful to your reputation by association. That can present some challenges that require upfront communication and commitment to a working policy.

Duties and Compensation of Art Advisors

There are no set guidelines for how art advisors should work with their clients, galleries, and perhaps artists.  There are some trade associations for advisors that are trying to establish a Code of Ethics.  Below is what the Association of Professional Art Advisors requires from their members.

You can use these as a guide for vetting advisors with whom you want to work.

APAA Code of Ethics

Members of APAA are distinguished by adherence to a core set of ethical principles. By joining the APAA, our members accept its code of ethical and professional practices which they observe in their relations with clients, artists, gallerists, dealers, auction houses and related professionals.

• • APAA members may not maintain inventory for sale, accept artwork on consignment or act as private dealers in any transaction.
  • APAA members maintain lawful practices, complying with state and federal laws in taxation, exercising due diligence in researching the provenance of recommended acquisitions, and refusing any requests by clients or vendors to subvert the law in any fashion.
  • APAA members should not perform services that would be, or appear to be, adverse to the interests of his or her client unless those services are fully disclosed to the client and the client provides advance consent to the services in writing.
  • APAA members do not accept financial compensation that creates a conflict of interest between the member and their client.
  • APAA members do not solicit or accept compensation from service providers or vendors.

The responsibilities of the art advisor or consultant to their clients overlap with that of a gallerist.  For example, they advise on which artworks to acquire to build a collection, research artist’s careers and art sources, introduce their clients to experts in the field, negotiate with galleries and bid on works at auction. They may also help facilitate framing, shipping, installations, insuring and cataloging a collection or refer a conservationist, etc.

Typically, art advisors are paid by the client for a set retainer fee, either monthly or annually.  Some advisors are compensated through a commission from a purchase which could range from 5 to 15 percent.  Advisors may use both compensation models, fees, and commission, depending on the needs of their particular client.  Others will take a commission from both the client and the gallery.  This practice is often discouraged because it can create conflicts of interest for the client, who need to trust their art advisor provides unbias recommendations.  That becomes muddy if they are also being paid by the gallery.

Benefits for Art Galleries Working with Art Advisors

Art collectors hire art consultants to help them navigate the art market and research acquisition opportunities.  Most often, these collectors are extremely busy people who do not have the time immerse themselves in the market or they are new the art world.  Art advisors are also meant to represent the client’s interest only, which may give them a bump up in the trust factor.   Collectors coming to your gallery with their advisor have the opportunity to get to know you, your artists and program without high pressure sales.

The primary benefit your gallery has by working with art advisors is they could potentially bring in new art buyers who may not have ever walked through your gallery door.  These new clients may reside within your market or other parts of the world.  Anything is possible now with the Internet.  As galleries struggle to forge relationships with new buyers, art consultants are a marketing tool worth pursuing.

Another benefit is freeing up some of your time to focus on your artist clients.  For example, you might partner with a trusted art consultant that you have an established relationship with to assist in the development of a gallery client’s collection.  An art consultant could also become an excellent source for research about new artists or projects that compliment your gallery program.

Creating the Gallery – Art Advisor Relationship

There are so many ways that the gallery – advisor relationship can go wrong.  It is best to give some advance thought about how you want to work with this sector of the art world.

Policy considerations

To have a successful partnership, you should establish a policy outlining how you will work with an advisor that works for your business needs.

Your gallery’s policy should focus on transparency and communication.  It is a good idea to require that a client is identified, and meetings include all three parties as much as possible.  Include how primary points of contact are defined with the collector and expectations for project communications between advisor, gallery, and collector.

Your policy should also be clear on whether or not you are willing to pay an advisor a commission or not.  You will also need to decide if you are paying commission from your portion of the sale or splitting it with the artist.  Your artists will want to weigh in on that potential.

You may want to post an invitation to contact the gallery for art consultants on your gallery website and briefly describe your policy. Doing this could help encourage advisors to want to partner with you and get the relationship off to a solid start.

Introductory meeting

I recommend reaching out to art consultants in your area and inviting them individually to the gallery to learn about your gallery program, mission, and artists.

This initial meeting is the time to introduce your policy on working with a third party.  You want to discuss how billing for art and services could be handled and ensure transparency with the collector is always maintained.  It is best to set expectations for how you wish to work together before a project begins.

Likewise, you will have the opportunity to hear about the projects they are working on and provide insight into how your gallery can help or share other resources that may be of value.  You can hear about their background and their needs for a working relationship.

Maintaining the Relationship

If you decide to pay commission, put it in writing what the advisor’s commission percentage is upfront, so you don’t have any surprises during the sale process.

Project communications

For each project, create a summary document that describes the project goals, such as for building a collector or placing art for a specific space. Include the primary client contact, budget, timeline if relevant, fees paid to either gallery or consultant, and any other details that will ensure clarity and transparency for the project.

It may be helpful to define the primary point of contact with the collector.  Typically, the party who first had the relationship with the collector is the primary contact, but circumstances may vary.  While everyone should be copied on communications, the collector’s experience will be better with a single contact that acts almost like a project manager.

The advisor will likely select artworks to present to the collector.  Be clear about what complementary information is needed and how pieces will be presented for each project.  Buyers will have different needs and expectations.

Also, be specific about how long works can be on hold for approval. A time limit is especially relevant if a piece is part of a current or upcoming show.  There should be a set limit, so your gallery will not miss other sales opportunities should the project linger.

To the Point

As the art world becomes more complicated through globalization and an increasing number of players, art galleries and art advisors should be working together for mutual benefit.  Being overly protective of a collector relationship limits the possibilities of services offered to a buyer and frankly, the sales opportunities as well.  Approach a relationship with an art advisor as a gallery partner not a competitor.

Good upfront communications and continued transparency throughout a project are essential to a productive and profitable relationship. Create a policy for collaborating with art advisors and vet them for knowledge and professionalism.  Allow them to do the same.

Don’t bother working with anyone who does not follow a particular code of ethics.  That can cause more damage to your gallery business than benefit.

 

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