By Maura Kehoe Collins, Independent Art Collections Advisor, Artiphile, New York, who will speak at the Art Business Summit in Ireland. Maura’s topic at the event is “Protecting Your Investment Into the Future: Succession Planning — The Modern Family and Inheritance.”
Common Misconception: The distinction between art advising and art collection management
An art advisor helps build and shape collections, often providing clients access to artworks on the primary and secondary markets, and is usually paid a commission for transactions on the buy or sell side (it should never be both). An art collections manager, on the other hand, is a disinterested party to transactions, paid by the hour, project, or retainer only by the client and beholden only to the best interest of that client; we advocate for works of art which cannot speak for themselves, and keep strict professional codes of confidentiality. We can assist in pre-purchase due diligence of condition reports and valuation for independent information before entering into a purchase agreement, and then ensure its care through its disposition to the next caretaker.
Especially disheartening is when prominent art executives promote faulty ideas about collection management. One fine art insurance executive was quoted as saying, “a personal assistant or a member of the family office can oversee a small collection, but one with over 10,000 pieces would need a registrar or an administrative assistant to keep track of the paperwork.” This is very misleading. Never use your personal assistant to manage an art collection! Even a collection of 100 objects can benefit from professional care, and one would need more than a registrar and/or collections manager well before the 10,000 object mark. No two collections are alike, and a one-size management model does not fit all. Consider how many collection specialists are employed to care for museum collections — there is a small army of registrars, technicians, conservators, photographers, and administrators at every level supporting collection preservation.
The percentage allocation formula also doesn’t work. I’ve seen articles suggesting a collector can expect to pay on average between 1% and 5% of their total collection value on managing their art collections, and up to 15% annually, depending on activity. If that allocation includes your insurance premiums and other transaction fees, taxes, and packing and shipping, it does not leave much for the role of the collections manager or registrar who will keep track of all objects at all locations and attend to all physical needs. It also does not account for objects of lesser market value but great historical or sentimental importance. These may not be fun expenditures, and some may have a hard time seeing the ROI, but I assure you, the investment is sound and will save you and your heirs some unhappy surprises down the road.
Succession
Securing the unique expertise and independent guidance of a professional art collections manager is the first step in ensuring your collection is under proper care and prudent stewardship. A solid collections management program is also the foundation for optimal succession planning and should not be put off. You and your manager can work together with your attorney and accountant to handle the increasingly complex and global nature of the art trade. Thankfully the world is coming to understand the value that collections managers can bring to the successful stewardship and disposition of art collections. It is time to wrestle with the unintended consequences of “art as investment” — we must recognize that art is unlike other investments and work together across professions toward even better “best practice” for the benefit of our clients and the works of art entrusted to us.
For more information about the Art Business Summit, please visit www.artbusinesseurope.com.
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