The New York City art auctions in May and June put to rest the idea that gloom in financial markets was spreading into the art market—at least, not at the very upper end. The $86.3 million price for "Triptych" by the artist Francis Bacon made it the most expensive contemporary artwork ever sold at auction. The $33.6 million sale of Lucien Freud's "benefits supervisor sleeping" (Big Sue) set the world auction record for a living artist. The New York Times referred to the scene at the contemporary-art sales at auction house Phillips de Pury as a "partylike evening."

Where are wealth managers at this party? They may be aware of the tax or insurance implications of a collection. But with clients spending huge sums, advisors need to be ready to help find an advisor to assist clients with collecting.

Art Market Metrics

The conventional wisdom is that art collecting should not be viewed primarily as an investment. Robert C. Elliott, senior managing director at Bessemer Trust, says, "Bessemer counsels clients to treat art as a passion investment, rather than as an investment whose primary function is to produce an attractive return."

Despite these lofty sentiments, the art market is a real market, with real performance metrics. "In the past 10 years, art has significantly outperformed stocks, with the strongest performance in the postwar and contemporary categories," says Michael Moses, co-creator of the Mei Moses Art Indexes (artasanasset.com). But it's a volatile asset: Contemporary art, as tracked by the index, rose 30% per year from 1985 to 1990, only to lose 65% of its total value in the next five years.

Some investors may be intrigued by the idea of holding art for purely financial reasons-including the diversification it brings due to its low correlation with stocks and negative correlation with bonds. For them, there are now a handful of art funds to choose from. For example, Prajit K. Dutta, professor of economics at Columbia and partner in the Aicon Gallery (Arts India Contemporary) of New York, Palo Alto and London, runs a closed-end, five-year partnership devoted to Indian art with a minimum investment of $200,000. The rise of BRIC countries has had its parallel in the art market: Dutta's fund was up 50% last year.

Still, for a collector to buy individual works of art primarily for investment purposes remains tricky, since art is an illiquid asset at the mercy of trends in the art world. The complexity of this world makes specialized expertise very useful. Hence, the art advisor.

Types of Art Advisors

Independent advisors have become a new power in the art world, helping to shape and guide the tastes (and buying tactics) of collectors. Typically, they are compensated by galleries and art dealers and receive a cut of the price of purchases. For long-term engagements, advisors may charge clients a retainer.

Finding value in this area requires research. Anyone can hang out a shingle as an art advisor: There are no fixed credentials or licenses and no central database. Richard Polsky, an author and independent dealer, adds that having an art advisor is no substitute for self- education at art fairs, galleries and museums. But even people who don't like art advisors admit that they're powerful. The new hedge fund collectors rely on art advisors, as do Hollywood royals.

Choosing the right advisor depends on many factors, such as the client's taste, asset level and ambitions. Auction houses, gallerists and private dealers all offer advice to their best clients at no charge as well. With many types of advisors to choose from, here is what some leading ones have to say.

The Independent: Elizabeth Fiore of Fiore Art Advisory in New York, offers clients advice encompassing education, research, due diligence, access to works and pricing. She saved one client $100,000 through research on the past sale history of a purchase. Her advice on selecting an advisor: "Check his or her track record in the field, including education, years in the business, knowledge of product and access to works." She recommends calling some of the advisor's clients too.

Fiore also points out that "a good advisor will know how to pinpoint the collector's taste, even if the collector does not know what he or she is looking for." One of her clients moved from prints to contemporary photography, and then to sculpture. Fiore moved right along with him: "We are exploring space on a different level now," she says.