An increasing number of financial institutions today offer art advisory services, integrating art management into overall wealth planning.
Why are banks focusing on services for art collectors?
In addition to accounts, cards, and loans, some large banks help clients build and manage their collections. Bank of America is the latest group to have launched an advisory service for high-net-worth private banking clients.
According to Drew Watson, head of the institution’s art services group, the team supports clients in purchasing works, both for those starting out and for those looking to refine an already structured collection. Additionally, it handles sales mandates.
Through agreements with major international auction houses, including Christie’s and Sotheby’s, the bank organizes sales on behalf of clients. At the same time, it assists collectors in succession planning and managing both fiscal and non-fiscal aspects related to the generational transfer of works.
How has the relationship between banks and art evolved?
In the past, credit institutions were not very attentive to the needs of collectors. In the time of Andrew Carnegie, for example, collecting ancient paintings was considered mainly a pastime, not a strategic asset component.
Only decades later did the idea of collecting as an asset emerge. As Watson notes, art as an investment class has seen a strong increase in value over the last two or three decades, representing a significant portion of many clients’ wealth.
Consequently, large fortunes expect objective and informed support from their banks in managing this type of asset, similar to what happens with other financial instruments. However, the focus often remains more on wealth management than speculative.
What are the wealth requirements to access these services?
In private banking segments, art advisory is offered as a concierge-type service rather than a paid service. In this context, the minimum access requirement is decidedly high.
Watson specifies that the bank seeks clients with a net worth of 100 million dollars and an art collection with a market value of at least 20 million dollars. For advisory alone, the minimum threshold is 50 million in net worth, with at least 25 million under management at the institution.
For third-party sales services, the conditions are similar. Instead, planning related to works is offered to relationships considered strategic, starting from 10 million dollars in assets. Overall, it is therefore an offer aimed at the highest segment of large fortunes.
What do banks offer compared to independent advisors?
Many specialized services of Bank of America, Citi, and Emigrant Bank overlap with those of traditional independent advisors. However, banks integrate these interventions into a broader financial framework.
Betsy Bickar, head of art advisory at Citi, recalls that the internal program was launched in 1979. The structure provides collectors worldwide with objective guidance, with a curatorially informed approach, throughout the entire life cycle of a collection.
Support ranges from education on individual artists or a specific work to verifying provenance, literature, exhibition history, and conservation status before purchase. Additionally, teams help manage buying and selling, movement, conservation, insurance, appraisals, and documentation.
What role does art-secured credit play?
Alongside services closer to those of independent advisors, banking structures offer products that are difficult for individual advisors to replicate, particularly credit secured by collection works.
Suzanne Gyorgy, partner of Emigrant Bank Fine Art, explains that the institution can manage all phases of loans secured by works internally: appraisals, negotiation of terms, and the actual granting of financing.
Emigrant provides credit lines between 1 million and 100 million dollars, with durations up to 15 years, secured by a wide range of collectible categories. Additionally, it offers specific expertise in succession and tax matters, integrating works into complex investment portfolios.
How much does art advisory cost in a bank?
For large fortunes, the direct cost of services can be contained, sometimes nonexistent. For advisory on purchasing and managing collections, for example, no additional fees are charged if the minimum relationship threshold is met.
According to Watson, it is a value-added service for relationships of that size. On auction sales, however, the bank applies a commission between 2% and 4% on transactions concluded with partner auction houses.
Wealth planning related to works remains free of charge for eligible clients. Different is the case for loans secured by works, which involve processing fees and a spread on the base rate, that is, the difference between interest applied to loans and interest recognized on deposits.
Who are the professionals behind these services?
The dedicated teams are composed of bankers with long experience in the art market. This hybrid profile allows them to communicate with both financial departments and collectors, galleries, and auction houses.
Bickar, before joining Citi, was director of the Sean Kelly Gallery in New York and founded an exhibition space in Costa Rica dedicated to emerging artists from Central America. This direct field experience fuels the curatorial approach to advisory.
Gyorgy, a member of the Association of Professional Art Advisors, led the Citi Art Advisory division for 14 years before moving to Emigrant Bank in 2023. Watson, for his part, comes from Christie’s, where he dealt with commercial finance, deal structuring, operations, and coordination of cross-functional teams for six sales categories including auctions, private sales, and online.
Why choose a bank instead of an independent advisor?
The main motivation in favor of banking structures is the integration between collection and overall wealth strategy. In other words, decisions on works are made considering the client’s entire balance sheet.
As Watson observes, many collectors do not consider art a pure investment but recognize that it represents a significant component of their wealth. Each operation on the collection is therefore evaluated in the context of overall wealth planning.
This approach reduces the risk of disconnected choices between financial management and art management. Compared to an independent advisor, the bank also has structured expertise in credit, succession planning, and international taxation, as shown by the practices of the main institutions mentioned and their specialized divisions.
For further references, you can directly consult the websites of Bank of America, Citi, and Emigrant Bank.
As expert in digital marketing, Amelia began working in the fintech sector in 2014 after writing her thesis on Bitcoin technology. Previously author for several international crypto-related magazines and CMO at Eidoo. She is now the co-founder and editor-in-chief of The Cryptonomist and Econique.
She is also a marketing teacher at Digital Coach in Milan and she published a book about NFTs for the Italian publishing house Mondadori, while she is also helping artists and company to entering in the sector. As advisor, Amelia is also involved in metaverse-related project such as The Nemesis and OVER.
