Banks Getting Into Art Advisory

 

ARTS  •  ART MARKET

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

For collectors whose art is one line item among many on a balance sheet, banks can fold art consulting into a broader wealth management strategy.

By Daniel Grant • 04/06/26 10:00am

 
 
 

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. Getty Images

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.”

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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.”

Drew Watson, director of Bank of America’s art consulting service. Courtesy Bank of America

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.”

More for art collectors

• Why a Signature Can Make or Break an Artwork’s Price

• Clare McAndrew On Why the Art Market’s Future Lies Beyond the $10 Million Sale

• The Benefits and Drawbacks of Fractionalized Art Ownership

• What Collectors Need to Know When Buying Art and Antiquities Abroad

• Why Most Art Galleries Don’t Offer Discounts

• Want to Donate Your Collection to a Museum? Read This First

• SEE ALSO: Amid Culture War Funding Cuts, Can Artist Foundations Save the Day?

Art-Backed Lending

 

ARTS  •  FINANCE  •  EXPERT INSIGHTS

From Rothko to Revenue: Unlocking Liquidity Through Art-Backed Lending

The art market is entering a new financial era where savvy collectors aren’t just buying and selling—they’re leveraging, borrowing and treating their Warhols like high-performing stocks.

By Philip Hoffman • 04/22/25 12:00pm

 
 
 

Why rush to sell in a cooling market when you can borrow against your art and wait for prices to rebound? Welcome to the new age of art finance. Fatih Aktas/Anadolu via Getty Images

As we enter 2025, market conditions are presenting both challenges and opportunities for collectors. The post-pandemic enthusiasm that propelled record-breaking auction results has cooled, and prices—particularly in the contemporary sector—have softened. Sellers are holding back and supply is constrained. Meanwhile, interest rates are expected to decline further, with three-month term secured overnight financing rate (SOFR) projected to fall below 4 percent by the end of the year. Against this backdrop, art-secured finance is becoming an indispensable tool for collectors and investors seeking to navigate the evolving financial landscape. Those who act decisively will find that strategic liquidity planning can unlock new acquisitions, provide flexibility amid economic shifts and ensure that assets are leveraged for maximum financial advantage.

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The art market has undergone a dramatic transformation over the past two decades, and I have seen it shift from a passion-driven pursuit to a powerful financial asset class that attracts sophisticated investors and savvy collectors alike. At The Fine Art Group, we started issuing art-secured loans in 2017, and since then, we have seen the demand for them grow and grow each year. What was once considered an illiquid, static investment is now a dynamic and strategic financial tool, with art-backed lending, purchase financing and portfolio management becoming important to wealth planning. With the global art market valued at over $65 billion and ultra-high-net-worth individuals collectively holding more than $2 trillion in art and collectibles, the demand for liquidity solutions has never been greater.

Purchase financing and opportunistic collecting

Over the past 18 months, art prices have stagnated or declined, impacted by economic uncertainty and shifting geopolitical tides. The enthusiasm for art sales we saw post-pandemic has given way to a more cautious approach. However, in moments of market contraction, opportunities arise. Works that commanded $1 million a year ago can now be acquired at a significant discount, making this an ideal time for strategic collecting.

Liquidity is key in this environment, and purchase financing allows collectors to move quickly when sought-after works become available. Specialty lenders provide up to 50 percent of the purchase price, enabling buyers to secure artworks while preserving cash flow. Likewise, leveraging existing collections through secured lending empowers collectors to expand their holdings despite market constraints.

We saw great success with a client who reached out to us in 2019 to help him buy a Joan Mitchell painting. The price was good, but the window was only open to him for a short time, and he needed to access liquidity quickly to make the purchase. Having seen how the market for female abstract expressionists has boomed over the past few years, this has put him in a good position for an advantageous sale this year.

Choosing the right time to sell

For those considering a sale, 2025 presents a nuanced but potentially lucrative landscape. While current prices are subdued, forecasts indicate a rebound towards the end of the year. Instead of selling under pressure in a down market, collectors can use art finance solutions to maintain liquidity while waiting for more favorable conditions. Advances against future sales provide immediate capital, allowing sellers to hold onto valuable artworks until demand—and pricing—strengthens.

History has shown that collectors who leverage short-term financing instead of liquidating prematurely tend to achieve stronger returns once the market recovers. Art-secured financing ensures sellers can adopt a strategic, rather than reactionary, approach—maximizing their collections’ value over time.

Quick access to operating and investment capital

Beyond individual collectors, art finance is increasingly playing a crucial role in broader financial strategies. Rising costs—such as escalating labor expenses, material shortages and higher operating costs for galleries—are putting pressure on businesses. For example, we have had collectors come to us who need to inject capital into their businesses during difficult market conditions by leveraging their collections. At the same time, galleries are consolidating geographical outposts to optimize revenue, making liquidity an even greater priority for them. Some of the most rewarding work we have done in the art finance space has involved helping smaller institutions release liquidity as part of their broader fundraising strategies.

In this climate, leveraging private or corporate art collections can provide a fast and effective means of accessing capital for expansion, acquisitions or cash flow stability. Unlike traditional credit channels, which often involve lengthy approval processes, art-secured loans offer a rapid path to liquidity—making them particularly effective as a bridge whilst awaiting permanent funding structures. We regularly find ourselves turning around loans in under a month to meet demand.

Reducing pressure when deadlines arise

Another rising trend in art finance is its use in navigating tax obligations, estate planning and legal settlements. High-net-worth individuals, wealth managers and family offices are increasingly collateralizing their art collections to cover large, often unexpected, expenses. For instance, inheritance tax liabilities can force heirs into rushed sales, often at suboptimal prices, to meet deadlines. Similarly, divorce settlements and unexpected tax bills can create liquidity crunches that require swift resolution. Art-secured finance provides financial flexibility, allowing collectors to meet obligations without compromising the integrity of their collections.

A collection of modern British masters recently inherited by one of our clients offers a compelling example. They will need to sell part of the collection to cover inheritance tax demands, but the market for these kinds of artists, despite the incredible quality, is not where it needs to be for us to confidently advise a sale to our client. We are optimistic that, with the tax burden satisfied by a loan secured against the collection, we’ll be able to wait it out until a better price can be achieved on their behalf.

Emerging technologies and market adaptations

As art-secured finance becomes more ingrained in liquidity strategies, the broader financial landscape is evolving in tandem. Emerging technologies and shifting market dynamics are shaping the next chapter of art finance, offering new tools and approaches for collectors and institutions to navigate this space. A.I.-driven tools will enhance market transparency, though fundamental pricing challenges will remain. Players in the art finance space are watching closely as other sectors of the art market experiment with blockchain technology. As its many applications mature and find their place within the art market, we are hopeful to see ways in which blockchain can contribute to greater transparency in the space and bring further reassurance to lenders—from the public visibility of liens against assets, similar to the Uniform Commercial Code in the U.S., to the accurate recording of provenance and sale history.

Elsewhere in the market, structural shifts will influence global buying patterns. The Middle Eastern auction market—especially in Saudi Arabia—is poised for growth, fueled by institutional investments and major auction house initiatives. Meanwhile, tariffs on China could curb both local and international art spending, potentially limiting the entry of Chinese artists into Western markets. All eyes are on the marquee auctions that will take place in New York this May, where many are hopeful that a recovery in U.S. markets, following a fall this spring, will inspire confidence in the art market and stimulate high-end art sales. Whatever happens, these auctions will set the tone for the rest of 2025.

A new era for finance

As the art market adapts to shifting economic and geopolitical conditions, it is clear that art finance is emerging as an essential strategy for collectors, investors and businesses alike. Beyond fine art, collectors are also increasingly turning to jewelry and watches as additional avenues for unlocking liquidity, both of which The Fine Art Group can finance. These assets, often undervalued as financial tools, provide another layer of flexibility for those seeking to access capital without parting with prized pieces. Whether unlocking liquidity for acquisitions, navigating financial obligations or optimizing the timing of sales, those who leverage art finance effectively will gain a competitive edge in an increasingly sophisticated market.

• SEE ALSO: At the Met, “Infinite Artistry” Reframes Japanese Ceramics as a Living Philosophy