Art Advising 2.0 : Vertigo & Accountability – Part II
The rise of the art advisor tracks the globalization of art business. Art advisors act as a bridge to new classes of collectors, but the role is often not clearly defined. Gallerists, dealers, art fairs and collectors encounter a heterogeneous profession. This event, held on April 1st, 2015 at Sotheby's Institute of Art, explores current ethical and business questions that art advising creates and the legal obligations that their relationships rely on. Art Advising 2.0 — Vertigo & Accountability is a collaboration amongst Sotheby’s Institute of Art, the Association of Professional Art Advisors, and Stropheus Art Law. Moderator: [linkedinbadge linkedinbadge URL="www.linkedin.com/in/judithprowda" connections="on" mode="icon" liname="Judith B. Prowda"], Chair, Committee on Fine Arts, New York State Bar Association, Entertainment, Arts and Sports Law (EASL) Section, Attorney and Faculty at Sotheby’s Institute of Art Panelists:
Sean Kelly, Sean Kelly Gallery
[linkedinbadge linkedinbadge URL="www.linkedin.com/in/richardlehun" connections="on" mode="icon" liname="Richard M. Lehun"], Attorney at Stropheus Art Law
[linkedinbadge linkedinbadge URL="www.linkedin.com/pub/noah-horowitz/20/a91/135" connections="on" mode="icon" liname="Noah Horowitz"], Executive Director The Armory Show
[linkedinbadge linkedinbadge URL="www.linkedin.com/pub/megan-fox-kelly/79/394/7b2" connections="on" mode="icon" liname="Megan Fox Kelly"], Megan Fox Kelly Art Advisory
A dedicated audio recording of Noah Horowitz's comments precedes his text. A video of Megan Fox Kelly's PowerPoint presentation can be found in the section on her presentation below. Part I of this event is here.
Dr. Noah Horowitz
All right, I’m scared. The obligations are really serious. I’m going to principally speak from my capacity at The Armory Show, which I think which is may be most relevant. But, just to set the stage, I think there are a few, large picture items that Judith addressed, Sean addressed a little as well as Richard, that I think are worth hitting a little off the bat.
All of this growth, the reason there are 150 plus people probably here right now in the art advisory business probably has to do with the tremendous growth of the art market in its own right, and the rampant professionalization that we’ve seen in that space over the last 20 or 30 years or so. Sean mentioned through the outset of his career, really the art market, even in the 80s and early 90s was very small. He knew most people professionally implicated. Now that’s certainly not the case.
There are good things and bad things that happen with that. I’m a proponent, and I think most people in this room probably believe we’re in a better place because of those changes. That being said, it’s brought a lot of additional variables and uncertainties into the equation.
Art advisors in the simplest sense, in my estimation, generally provide a great deal of value. Again, [art advising] is not my professional occupation. That being said, I, like many people, probably have a lot of people asking them questions about the value of artworks and how to conduct themselves in the market.
One thing that struck me from early on when I was still in London, a friend of mine who is not a collector but a guy who’s made a fair amount of money on Wall Street had bought a winter home in the Swiss Alps and there was a gallery there who was trying to sell him a Damien Hirst print. He came up to me – and the gallery had given him the print, and it was already hanging in his living room – and basically he had very proudly shared with me that they had asked 16,000 Swiss Francs for it, and he had negotiated a thousand francs off of that price, and I said, "wait a minute, let me check Artnet quickly just to see if I can help you there." And really you could see that the artwork – it was an edition of a 150 or so – I think five or six had come up in auction in the last year. The highest price achieved was $5,000 and four others were all bought in, with estimates from $4,000 to $6,000. I told him to offer the gallery $3,000, and that they’d be lucky if he bought it for that amount. He felt bad, he offered it at $5,000, and the email, which has since been deleted from my account, which is the problem with emails these days, was one of the funniest emails I’ve ever read. He forwarded to me from the gallery owner, who just absolutely lost it, and inserted a number of fiery words, which I won’t repeat here, into their response. Suffice it to say, my friend didn’t buy the work, and was already thankful for it.
The following year he went back to – I was with him, and we were skiing, I said, “Oh, let’s check out that gallery that you were talking about, just to see” – and the gallery was closed. So, the point there is: this was just 101 checking prices on Artnet, this wasn’t doing anything like Richard was referring to. I think that if advisors can help, great, the more efficient market in that sense, then that’s a good thing. And people like this, who are essentially trying to rip people off, shouldn’t be in business, and that’s a good thing as well.
There are other good things as well that art advisors provide beyond the obvious – certainly in my capacity as a fair, or really in the most basic capacity – any effort that we can make in our business to help raise people’s education about an appreciation of artworks is fundamentally a good thing. People often wonder why artworks are worth what they are and fundamentally it’s because there’s some knowledge about them. There’s an educational and an informational structure around them that creates that value. And if art advisors, like the great dealers and scholars over time, can help provide a baseline of that knowledge, that’s fundamentally a good thing.
That being said, the whole role and scope of the business have changed immeasurably. One bit of advice that I give to any dealer that comes and shows with us at The Armory that's not from New York or the U.S. is that you’ll probably meet more art advisors at The Armory than any other fair you go to, and that’s generally true. We have an enormous volume of advisors at the fair and for a lot of our foreign dealers – I think that 55% -60% of The Armory galleries are coming from overseas, they’ve never seen anything like this. They’re used to dealing with some advisors – a lot of collectors with museum people – but the sheer number of people that are representing other people is very overwhelming to them, and a lot of them don’t know, frankly, how to deal with that.
We commissioned Clare McAndrew, who does a report for TEFAF, to do an exhibitor survey for us this year and a VIP survey, and actually we got responses back from that today, and discovered that 15% of the VIPs at The Armory Show claim that they are art advisors or consultants, which is maybe a little bit less than I thought it could actually be. Fifty to fifty-five percent said they're private collectors, about 20% said they were art world professionals, which is basically, other galleries, dealers, curators, etc. The third biggest category was at 15%, which was art advisors and consultants.
That being said, when I talked to our VIP team to prepare for this – and I remember this in the office, when we were doing the Show this year – the number of new VIP requests we received from art advisors this year was just through the moon. I had them pull stats, and basically I've been told that 50% of new VIP requests to come to The Armory this year was from art advisors and consultants. Now that is a huge number of people who are writing to our vip@thearmoryshow account, trying to get access to our fair.
From my vantage point as director of the fair, in many ways this is a great thing. We can, through a single art advisor, speak to multiple different clients. And as our industry has become globalized and become faster and more people are in more places and less people can actually come to the fairs, having a really qualified art advisor at a fair like The Armory or any fair, auction or in any gallery for that matter is a good thing, because you don’t ever quite know who they’re representing, and they can speak to a client and buy on behalf of a client or take something back in six months and you might end up selling something without a client and that’s a good thing.
The problem is that it creates a lot of question marks and inefficiencies that our staff in particular – and I’m sure it’s the same in many other galleries and auction houses – have difficulties dealing with. When people write to us and request passes, we try to ask a number of questions. Where are you based? Who are your clients? How much money do you or they spend on art etc., etc.? And we do our best to filter and provide access accordingly. That doesn’t always go to plan.
One of the things I discovered this year – I don’t even know how I discovered it, I think I was just on Facebook or something – but all of the sudden there was some art advisory firm offering up free Armory VIP tickets on Facebook and Twitter. I then put that into our VIP account and I found a long correspondence where there was a big email chain from January or February where they introduced themselves as a new art advisory firm. We were told that they were buying 5 to 7 million dollars of art for their clients, annually and they basically listed every major art fair and every major artist under the sun as who they’re buying for. And yet, there they were, hawking Armory VIP passes on Twitter.
Now I have no problem with people offering passes to qualified people, but when Sean Kelly, who exhibits with us comes up to me, “Why on the bloody earth is this student asking me – at 12:30 PM of opening day of the fair – for information about Antony Gormley or something like this for his student project, that doesn’t help me do my job, and doesn’t make him particularly happy either.
Judith: Hopefully, not one of my students. [Laughter in the audience]
Noah: I think it was. [More laughter in the audience]
And I think that there’s a large misperception about why fairs ask these kinds questions, I’m not sure why the other auction houses and others ask these questions to is: Who are your representing? What are their names? Yadda, yadda, yadda. And I can totally appreciate and certainly understand certain aspects around client confidentiality and not wanting to show your hand. At the same time, unlike auction houses, we don’t take a commission on sales. We’re just a facilitator between buyer and seller, and the more information we have about who you’re bringing to the fair, the better job we can do in terms of filtering and tiering access to art dealers. Because what we want to create is a steady flow of qualified clients coming into the fair throughout the course of the week. And we don’t know that it becomes convoluted. People can get upset with us because they have too many students coming in when they should be dealing with high level advisors and high level museum trustee collectors.
So, that’s just something I'd say on that.
I think the other side of that as well is that I’m a believer fundamentally in business in life, that the more information you can put out there the better it is for everybody. I think that advisors are always worried somehow we’ll get a client’s information and then in the following year, they’ll be in our VIP system and they’ll get a VIP pass directly and they won’t have to mediate through an advisor. At some level of course, that’s true. But at the margin I think that the more collectors feel, or anybody feels in terms of going to galleries and going to fairs, the more likely they are to purchase work and be an active and serious participant. So, I don’t believe that advisors should be screening or as controlling. Maybe their business can benefit in the long term by having more actively engaged clients who are more comfortable going to fair and galleries generally.
Big picture thinking, I think that one thing that’s a concern, certainly to me wearing a bit more of an academic hat, is a lot of criticism around the fact that with this huge influx and increase in art advisors representing collectors nowadays there’s a risk, perhaps, that collectors are not thinking for themselves as much, or in fact, that collections are getting built in a like-for-like fashion.
As a result, you have certain people with certain kinds of tastes who are building collections and advising on behalf of collectors and somehow, things are starting to look the same. I think that’s a legitimate risk. I don’t think that it’s attributable uniquely to the advisor business, but it is something in our general business that needs to be addressed. And so I just sort of throw that out there, maybe that’s an interesting talking point.
Generally, what I’d say as a final note is any effort to create a more professionalized association for or professional networks for advisors, which is something that Megan will address, is a good thing for the market. Speaking on behalf of the fair, the more associations that we can liaise with and coordinate with in lieu of one by one basis individual collectors is certainly a beneficial thing, and I’d like to think there will be more such developments to come. And this is something more for the future, as the business increases; we’ll see more associations that are working in a more professional capacity. And that, by the way, is a good thing.
So I think I will stop there, and I think we will have fun conversations after.
