In an overheated art market, many collectors are turning to cool-headed advisors to land the key buy.
At the auction house Phillips de Pury last fall, the hammer fell on a photograph from Cindy Sherman's 1981 "Centerfolds" series at a toe-curling $478,400, while at Christie's in New York another image from the exact same series went for $220,300. Depending on how history values Sherman's work, either one collector gave in to auction fever or the other got an incredible bargain. "I can't make sense of the disparity," says Sandy Heller, a Manhattan consultant who works specifically with new collectors. "If someone ends up on the wrong side of a transaction, I just don't want my client to be the one."
Heller is among the elite group of art advisors who help serious collectors collect—insiders with the knowledge to navigate the ever-expanding art market. What was once a pastime for the elite—selecting the perfect painting or sculpture—is now the province of hedge fund managers who view art as the next great investment, wealthy collectors who compete with museums for masterpieces (and inflate prices in the process), and dealers who jet from one multinational fair to the next, chasing the latest artist. Success in such a market can depend more on access than aesthetics, more on timing than taste.
Aesthetic judgment, however, is a sine qua non for an advisor, for in the marketplace, artistic quality and monetary value are often interwoven. A top advisor can tease out both. "How many collectors could stand before five [white monochromatic] Robert Ryman paintings and determine the one worth paying the premium price for?" asks Allan Schwartzman, a New York-based consultant.
Schwartzman is well qualified to make that call. As an art writer he'd attracted the admiration of a Dallas patron, Howard Rachofsky, who subsequently sought him out for advice. "My first gallery experiences were miserable," Rachofsky says. "Dealers can be helpful, but they have a business to run, so they're going to sell the best things to their best clients and you're going to get second or third choice." In 1997 Rachofsky hired Schwartzman to collaborate on building a collection that would resonate with his new Richard Meier-designed house. The timing was impeccable: Schwartzman pulled together a remarkable group of minimalist pieces at prices that now seem very reasonable. Today Rachofsky's collection of minimalist and postminimalist art is one of the country's most highly regarded.
Barbara Guggenheim, a veteran consultant in Los Angeles, explains that one part of her job is to help clients (many of whom are already knowledgeable about art) focus their taste and identify unifying themes for their collections. One movie producer and his wife, she says, "viewed themselves as being socially responsible storytellers, so we hit on this idea of American social realism," and that's the direction they pursued.
But why hire an advisor, when there are plenty of dealers ready with free advice? In fact, collectors can count on dealers to know as much about the work in their galleries—and on auction-house experts to know as much about the work they sell—as even the most learned advisors. And with art fairs and biennials now occurring somewhere in the world nearly every month, many dealers and auction specialists travel and see as much new work as top advisors do. (Such art fairs may be the best venue for novices to meet face-to-face with dealers who normally do business with a select group. An advisor can help make introductions.)
There is an obvious reason to look beyond these gallerists and auction specialists, though: Their interest is mainly in promoting and selling the art they control. Independent advisors, on the other hand, place their clients' needs first and should offer unbiased opinions.
Not that conflicts of interest aren't possible. A client should ask a potential advisor directly whether he or she is representing an artist or buying and reselling work. A sticky situation can arise if an advisor has two clients with the same interest. Who ends up favored? An advisor always tries to avoid such a situation.
The risks in buying art, however, are part of the deal—a fact an ambitious collector knows well. It's rare that any such purchase is both a bargain and a safe choice. The best approach, Schwartzman says, is to "buy the best you can for what you can afford" and hope that it holds its value. Then relax, and enjoy the art.
Most advisors work with one of two fee structures.
COMMISSION Usually between 5 and 20 percent of the purchase price. "There should never be any collusion with a gallerist," says Mark Fletcher. "That's not to say it doesn't happen."
RETAINER A monthly fee, based on factors such as a percentage of the collector's estimated purchases and the advisor's time. (Some advisors believe the client gets more unbiased advice using this arrangement.)
In the Know: Portraits of Top Advisors
How does one choose an art advisor in a field where anyone can claim expertise? These consultants have the connections and commitment to connoisseurship that set them apart.
SPECIALTY Showing collectors what has not yet become a trend. Castoriano is a French native who lived in Argentina, Brazil, and Italy before moving to New York and now claims clients from those same places. Five years ago he began consulting full-time, focusing on members of his own generation just starting to collect (he's 39). He spends much of his time touring galleries with clients. "First it's instinct, then we study." 212-689-1020
SPECIALTY Postwar art with a focus on emerging artists. Fletcher earned an MBA in international finance from the Ecole des Cadres in Paris before spending ten years in top-flight galleries; he set up as an advisor in 1998. His life partner is Tobias Meyer, head of contemporary art at Sotheby's, New York. With prices reaching new heights, Fletcher observes, "it's a good time to think about limited-edition artists' furniture—a different market, but smart money moves around." email@example.com
YVONNE FORCE VILLAREAL
SPECIALTY Contemporary work, including commissions. Force Villareal worked at New York's AD Gallery, which focused on artist-made functional objects and limited editions. Before long she was introduced to Laurance S. Rockefeller, who became a backer for the precursor to her nonprofit Art Production Fund (a commissioning agent). "You have to be driven by more than money," she says. "It's just like painting—what's important is how you handle the details." Today's market, she says, has been manipulated by investors buying purely for investment. "To stay in the art world for the long haul is to become obsessed with the art itself." 212-966-0193
SPECIALTY Contemporary art. Frankfurt has impeccable art-world genes. His mother was a close friend of Andy Warhol's, and as a teenager Frankfurt was an assistant at Warhol's Factory. Today, after 15 years as an advisor, he leads seminars for budding business leaders and art collectors. Many of his private clients are in the entertainment industry and often have relationships with museums to which they will one day donate works. "If you're buying art only to make money," he says, "I'm not interested." 323-953-9669
BARBARA GUGGENHEIM & ABIGAIL ASHER
SPECIALTY 19th- and 20th-century European and American through contemporary. Barbara Guggenheim, the Los Angeles-based partner of the firm, has a Ph.D. in art history and spent several years working for Sotheby's and Christie's. Abigail Asher is a British-born art historian who became Guggenheim's New York partner in 1992. Their high-powered clientele comes from the media and entertainment worlds as well as the financial and technology sectors. (Such high-powered clients play for high stakes; in 1989 Sylvester Stallone sued Guggenheim for $5 million, for fraud and breach of contract; the case was swiftly settled out of court.) In L.A., 310-275-2133; in New York City, 212-242-5767
SPECIALTY Contemporary work, particularly from the nineties. Heller has, in just five years, earned high marks from collectors and colleagues alike. He has a B.A. in art history from Tulane University but actually began his professional life as an art restorer after an apprenticeship in Italy. "It's a full-time job to stay exposed to everything, to find where the opportunities lie," he says. 212-249-4520
SPECIALTY Contemporary art. Schwartzman was an assistant to Whitney Museum curator Marcia Tucker in 1976 when both left to create the New Museum of Contemporary Art. In 1980 he landed at the Barbara Gladstone Gallery but struck out on his own to write. Schwartzman's career as an advisor began when Howard Rachofsky contacted him after reading his articles in Art & Auction. Today Rachofsky has one of the country's foremost collections of minimalist art. "In the early eighties," Schwartzman says, "great work by emerging artists sold for $3,000 to $5,000. Today, when young artists can sell for $100,000 at auction a year after an exhibition, there is a greater margin for error. People want to know they aren't throwing money away." 212-979-8576
SPECIALTY Contemporary work, especially by emerging artists. Watson began collecting at only 13 with money from his paper route. He ran a SoHo gallery from the late seventies to the early nineties, showing edgy new paintings. Currently he is co-owner of Scenic, which provides services for private and corporate collectors. 212-243-5050