Private bankers use art to lure the rich

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) 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.

"The more you are able in your own shop to answer to your client's needs, the better you are," Patrick du Saint, who heads BNP Paribas' (BNPP.PA) private bank in Switzerland, said.

"We have a team dedicated to art advisory based in Paris. We also advise on how to sell farms, vineyards, we have land and property advisors. That is not where we make our money but where we make our clients happy."

Bankers said clients are attracted by the possibility of attending art viewings and auctions as a way to affirm their membership of the world's wealthy elite.

Bernard Coucke, Deputy Global CEO of ING (ING.AS) Private Banking, said the bank uses its prized modern and contemporary art collection to win over new business.

"We use it to catch clients. We show them what we can do," Coucke told the Reuters summit.

However, some bankers were skeptical about the need to invest a lot of time and energy this line of business, which they saw more as a trendy frill than a serious investment.

"I think it's fashionable. I think it makes sense to invest in art. But there is no way the bank can provide expertise on old coins, books, porcelain, in Asian art or whatever," said Christopher von Oppenheim, one of the owners of Sal Oppenheim.