Why the World’s Biggest Banks Are Getting Into the Art Advisory Business

You may think of banks as places to keep savings, take out loans and manage credit cards—but a growing number of major financial institutions also want to help you build and manage your art collection. Citi and Emigrant banks have been in the lead here, but Bank of America is the most recent to launch an art consulting service for its high-net-worth private banking clients. “We help clients acquire works of art, whether they’re just starting or they’re looking to refine their collections,” Drew Watson, head of Bank of America’s art services group, told Observer. “And then also consignment services. That’s the service that we offer on the sell side, where we help clients sell art through partnerships with the major global auction houses like Christie's and Sotheby’s.” The offerings don’t stop there. “We also formalized our art planning expertise, where we’re actively talking with clients about incorporating art into their estate plan, thinking about the succession plan for an art collection, and then also helping them think through all of the tax and non-tax related issues that relate to the transition of a collection.”

Banks weren’t always so attentive to clients who collected art. Whatever bank steel magnate Andrew Carnegie used probably didn’t advise him on which Old Master paintings to purchase, but of course, back then, art collecting was seen as a hobby. The idea that art could be an asset class—which is the prevailing view today—was decades off. “Clients have, over the years, come to us requesting specific services around their art collections, because as you know, art as an asset class has really increased in value over the past two, three decades and represents a significant portion of many of our clients’ net worth,” Watson said. “And they are looking to their banking institution, their fiduciary, for unbiased guidance and intelligence about how to best manage this particular asset.”

For private banking clients, art consulting functions more as a concierge benefit than a pay-for-service arrangement. “We’re looking for clients with a $100 million net worth and an art collection of $20 million fair market value or greater,” he explained. “For art consulting, the client criteria, the relationship minimum is $50 million net worth with $25 million on the firm. For consignment services, it’s similar. And then for art planning, it’s really for our strategic relationships at the firm, which are $10 million-plus.”

Many of the specialty services offered by Bank of America, Citi and Emigrant overlap with those provided by independent art advisors. “We provide collectors globally with objective, curatorially informed guidance across the full arc of art collection and maintenance, whether they are buying one artwork or building a collection,” said Betsy Bickar, head of art advisory at Citi, which inaugurated its program in 1979. Art consultancy services offered by banks run the gamut from educating clients on artists or a particular work of art, doing due diligence (provenance, literature, exhibition history and condition) before the purchase of an artwork, helping them navigate the process of buying and selling, as well as how to care for, ship, store, appraise, insure and create documentation for objects in a collection.

There are several other services not generally offered by independent art advisors, including art-backed lending that uses artworks in a collection as collateral. Suzanne Gyorgy, a partner at Emigrant Bank Fine Art, told Observer that the firm “can arrange all aspects of collateralized art loans, from appraisals to negotiating the terms of a loan and finally lending the money, and we can do it all in-house.” Emigrant offers loans of between $1 million and $100 million with terms up to 15 years, secured by a broad range of collecting categories. Trust and estate planning and tax strategies are additional areas where bank art consulting groups have an advantage over independent art advisors, serving clients whose art collections are but one aspect of their overall investment portfolios. “Under the Emigrant umbrella, we can tap into a lot of expertise,” Gyorgy said.

The cost to high-net-worth individuals for bank art consulting is not particularly high and, in some cases, there is no charge at all. “For art consulting, there is no additional fee as long as you meet our client relationship minimum,” Watson said. “That’s just a value-added service for those particular relationships at that size. For consignment services, the sell side, we do charge a fee of two percent to four percent on the transactions with the auction houses. And then for art planning, again, it’s value-added, no fees.” For art-backed loans, he noted, there are origination fees as well as an interest rate spread—the difference between the interest rate charged by banks on loans and the interest rate they pay on deposits—that is charged over the base interest rate.

The professionals doing this work are bankers, but they’re bankers with extensive experience in the art field. Bickar was a director of New York’s Sean Kelly Gallery and founded an art space in Costa Rica that showcased emerging artists from Central America. Gyorgy, a member of the Association of Professional Art Advisors, was global head of Citi Art Advisory for 14 years before moving to Emigrant Bank in 2023. And Watson was a business manager at Christie’s, where he oversaw commercial finance, deal structuring and negotiation, business operations and cross-functional teams for six art sale categories across auction, private sale and online channels.

The main reason a collector might work with a bank art consulting department versus an independent advisor is that the banker-advisors can tailor their advice to their clients’ broader financial interests. “Going back to this idea of art as an asset class, our clients don’t really think about art as a pure investment per se, but they know that it is an asset that they carry on their balance sheet that is a significant portion of their net worth,” Watson said. “And any activity that is done around an art collection is in the context of their broader wealth strategy and their banking relationships. So, we don’t run into a situation where the left hand doesn’t know what the right hand is doing.”

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