Private bankers use art to lure the rich

By Lisa Jucca

GENEVA (Reuters) - Private banks are rushing to add art consulting to their traditional list of investment services in a bid to lure wealthy clients with increasingly demanding needs, top bankers told a Reuters Wealth Management Summit.

Traditionally, rich individuals looking to collect art would turn directly to art dealers for help. But private bankers are increasingly trying to exploit what they see as an attractive way to entice clients -- despite the fact many are skeptical as to whether the business yields reliable returns.

The service, known as art advisory, helps clients from established families to assess the value of their collections or guides prospective buyers in their choice. Banks may also provide ad-hoc insurance or organize lending to museums and viewings.

"Art advisory is a huge business for us," said Marianne Hay, Chief Executive Officer of Citigroup (C.N: Quote, Profile, Research, Stock Buzz) Global Wealth Management Europe. "The spectrum is huge. Clients want to borrow against art as well as increase their art portfolio."

An internal survey by Italian private bank Banca Aletti showed that between 10 and 20 percent of clients said they were very interested in art advisory services, Cristina Regazzoni, head of Aletti's private banking services, told Reuters.

Since not many buyers can afford the old masters, the new rich tend to prefer modern and even contemporary art.

MORE THAN FASHION?

Private bankers admit that returns from art advisory are not easy to quantify but the service has nonetheless become an essential part of the global offer for rich private clients.  Continued...