Even as details of the Labor Department’s Fiduciary Rule are still being debated and its implementation may be delayed for another 18 months, the writing’s on the wall. Investors want financial advisors who act in their best interest, and understandably so.
There is a lesson to be learnt here. As a number of recent high-profile court cases has shown, there is much potential for misunderstanding in the relationship between collector and art advisor, particularly if potential conflicts of interest or remuneration are not discussed in advance of a collaboration.
Art Advisory Is Now Considered A Bona Fide Profession
The art advisory profession has changed tremendously over the past decade or so: from a somewhat informal occupation to a bona fide profession. In addition to knowing their art, these days an art advisor is expected to be financially savvy and to have a working knowledge of areas such as art law and taxes, conservation and art lending, to name a few examples.
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“Unfortunately, unlike the legal profession, art advisors don’t require certificates or licenses to operate. This means that anyone can call themselves an art advisor, which is exactly what happens” says Julia Wehkamp, Co-Founder of One Art Nation, an online international art community educating art collectors and professionals.
Collectors need an art advisor who knows the art market like the back of their hand. A professional, dedicated art advisor can open many doors for collectors, save them time and money, and reduce their transactional risk.
An Art Advisor Provides Value To Art Collectors
A good art advisor provides not only tremendous value to their art-collecting clients but also to their clients’ wealth managers and family offices. Unfortunately, it is difficult for financial advisors - especially those who don’t operate in the art world on a daily basis - to know who to trust with their clients’ requirements. No industry-wide standard of best practice (let alone regulation) exists for the art advisory profession - not for individual art advisors nor art advisory firms.
At the same time I have seen a tremendous interest from Millennials in the art advisory field. They are eager to get into the profession, but find it hard to get the right work experience, set up their own business, or even exchange information and off-market opportunities with fellow advisors. In fact, I often receive questions from aspiring art advisors on the best way to handle the relationship with their clients. Topics include how to set up an appropriate fee model and how to manage expectations.
The truth of the matter is that the opacity of the art market is not just confusing for art collectors, it’s also confusing for emerging art advisors (and perhaps even for experienced advisors). As a new art advisor, right now, you’re pretty much left to your own devices.
It’s important that young art advisors understand best practice: that they should work with contracts to clarify the rights and responsibilities of both parties, not just for the protection of their clients, but also for their own protection. It is in an advisor’s interest to be transparent about the way in which they are remunerated and to avoid conflicts of interest that may lead to problems years down the line.
Additionally, with organizations like the Clarion List providing transparency in the art services industry through their online review system, having a stellar reputation will help art advisors to grow their business and successfully collaborate with other art advisors.
Tang Art Advisory and One Art Nation have teamed up to provide the world’s first online course for aspiring art advisors. The purpose of the program is to guide the next generation of professional art advisors on how to set up their businesses and how to successfully manage the relationships with their clients.
Art Advisory 101
Tang Art Advisory and One Art Nation are dedicated to disseminating best practice in the art advisory field, which does not just help art advisors but ultimately collectors and the wider international art market, too.
The program consists of a series of informative and interactive online courses, which are being created to guide aspiring art advisors on how to navigate the art world, set up a successful art advisory business and follow best practice. At the end of the course, upon successfully completing a short quiz, participants will receive a Certificate of Participation.