Art Advising

By Octavio Robles, AIA, Esq

WHAT IS AN ART ADVISOR?

The relatively new profession of art advising is best characterized as the role played by an experienced art professional in relationship with a client that the art professional represents for the purpose of providing that client with knowledge and guidance for the intent set forth by the parties and for a pre-determined compensation. An art advisor can be an individual or an organization. An advisor could work for a gallery or be an independent contractor working with numerous galleries. In all cases, the advisor would possess the knowledge and experience necessary to perform the duties set forth by the parties. The client can be an art collector with a continuing relationship or a one-time buyer of a single or any number of works. It could be an individual, a trust, a for-profit or not-for-profit corporate entity or a public institution. A client could be anyone or anything, even an anonymous buyer. A client could also be an artist, in which case, depending on the relationship’s objective, the art advisor’s role can evolve into the role of an agent, very much the same way an agent represents a professional athlete. The profession is generally unlicensed and transactions are not regulated so anyone can conceivably call themselves an art advisor similarly to the way anyone could begin calling themselves an interior decorator years ago. There’s no reliable way of determining how many art advisors there are in Florida or in any given state.

WHAT AN ART ADVISOR SHOULD BE

Regardless of whether an art advisor is an individual or an organization, there are numerous ways in which an art advisor can serve the client. The most important way that art advisors serve their clients is by providing access to art when the client is a buyer and wants to acquire sought after art. When the client is an artist, the most important way that art advisors serve is to provide access to markets. Wealthy collectors, corporate and institutional buyers compete for the best choices available in the art market. It would be unrealistic to think that a buyer can make a telephone call or walk into a gallery and obtain a sought after work or make a wise investment. Even when a buyer loves the work of an artist or any particular image, understanding value and accessing a work is a complex matter and takes time. When the client is an artist, identifying and accessing markets is the most important objective an artist/client would have. With an advisor, a buyer can develop knowledge and the ability to navigate through the minefield of possibilities and an artist can be left to do their art. An art advisor should be very acquainted with the client’s short and long term taste, purpose and budget.

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WHAT AN ART ADVISOR SHOULD PROVIDE THE CLIENT

Depending on the scope of the relationship, advisors should also be able to provide the buyer or artist client with knowledge, value and strategy to obtain existing works, or commissioning them, access markets, augment value and form strategies. An art advisor should be a connoisseur; an expert in the art forms in which the advice is given. An art advisor should most importantly provide the client with discretion, loyalty and confidentiality. Additionally, art advisors should provide the client with services such as sourcing art, perform price research and due diligence for authenticity and providence, negotiate transactions, insuring, shipping, installing and cataloguing. Once the acquisition is complete, art advisors should provide guidance in areas such as obtaining financing, setting up foundations, estate planning, managing deceased artists’ estates, tax implications, lending, showing and caring for collections over time, restoration and ultimately selling the art or collection. This can be accomplished through first hand knowledge or through the selection and retention of sub-contractor/consultants. Where the client is an artist, an advisor should be willing to handle all aspects of the artist’s business, including marketing, exhibitions, publications and public relations in order to allow the artist to do what he/she does best.

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AN ART ADVISOR IS NEVER AN ART DEALER BUT A DEALER MAY BE AN ADVISOR

There are major differences between the role of an art advisor and an art dealer or broker. Where a dealer is an independent actor and can wheel and deal with negotiations for his benefit, an art advisor has a pre-determined compensation amount regardless of the type of client being represented. An art advisor can never be a dealer while representing a client because the advisor is always working for the benefit of the client.  However, a dealer can become an advisor to any type of client but must adopt the standards expected of an art advisor. Although there are no formal regulatory bodies or governmental authorities overseeing the practice of art advising, there are voluntary organizations that establish an expressed code of ethics for its members. Such an organization is the Association of Professional Art Advisors (APAA). Their mission statement states: “Founded in 1980, the APAA is the only standard-setting organization for the practice of art advisory and is dedicated to promoting standards of connoisseurship, scholarship and ethical practice in the profession and to increasing public awareness of the role and responsibilities of reputable art advisors”. Common law, state statutes and court cases have established expected relationship standards regarding art advisors, art dealers and brokers that mirror the same concepts in other fields.

FIDUCIARY IS NOT A TYPE OF PASTA

Perhaps the most referenced legal standard associated with art advising is the legal theory of fiduciary. Stated in simple terms, a fiduciary must always act in the client’s best interest. It is the highest duty that one person could have with another. An art advisor, regardless of whether his relationship with the client has risen to the equivalent of an agent, by law, has a fiduciary relationship with the client. Fiduciary duties include the duty of loyalty and good faith, to care for and manage the client’s property prudently, to deal fairly and honestly with the client, to account to the client as to disposition of the property and to always disclose to the client all information relevant to the subject matter of the relationship. Most litigation having to do with breaches of fiduciary duties by art advisors involve the violation of agreed to compensation between the advisor and the client. In such cases, the advisor has benefited financially beyond the agreed terms of the relationship at the expense of the client.

DISCLOSE, DISCLOSE, DISCLOSE

The best way to avoid problems is to avoid conflicts of interests. Even the appearance of a conflict or impropriety has to be avoided. The best way to achieve that is to have the terms of the relationship setting forth the purpose, scope and compensation of the relationship in writing and signed by the parties. With a good agreement as a foundation, the advisor must constantly communicate in writing, likely via email, with the client on a frequent basis thus keeping the client up to date with what is going on and whenever any issues that could be interpreted as a conflict arises, make it a point to always, with an abundance of detail and in a timely manner, disclose.

Octavio Robles, AIA, Esq. is a legal contributor to ARTDISTRICTS and a member of the Florida and Federal Bars (Southern District of Florida). He is a Florida Supreme Court Certified Mediator and Approved Arbitrator; a member of the Construction Committee of the Real Property, Probate and Trust Law Section, the Art and Entertainment, and the Alternative Dispute Resolution Law sections of the Florida Bar; and a member of the American Institute of Architects, Art Deco Society of Miami and Copyright Society of the USA. He holds licenses as a registered architect, state-certified general contractor and real-estate broker in Florida and is a LEED-accredited professional. He received his Juris Doctor degree from the University of Miami School of Law in 1990. He holds masters’ degrees in architecture and construction management and a bachelor’s degree in design, all from the University of Florida. His practice is limited to art, design, architecture, construction and real-estate law.