Numerous collectors, museums and galleries that have long placed their fine arts risk through Marsh & McLennan Cos. have recently had to reassess their placement options.
In a development that sent a not-so-small ripple through the arts brokerage community, the fine arts team at Marsh in New York moved out of their Sixth Avenue digs and into new territory on Lexington Avenue, at the offices of the DeWitt Stern Group Inc.
The group of five--two from Marsh's Chicago offices--officially joined DeWitt Stern on Jan. 27 of this year. For privately held DeWitt Stern, the filled-out practice will serve as a desirable complement to its formidable entertainment practice.
Not everyone was surprised by the move. Some said that morale has been low around Marsh ever since "Hurricane Spitzer" blew through its offices. In the regulatory environment created by the New York Attorney General's probes, said one industry observer, Marsh and other large firms have had to jump though hoops to comply with new transparency-friendly controls, making it difficult for brokers in niche markets to do their jobs effectively.
"In the world of fine arts, someone calls you and says, 'We're moving a $30 million painting in a half an hour. Get it covered,'" said the observer. There's not always enough time to follow a cumbersome set of procedures to bind the risk.
But an insider said the regulatory environment only played a small part in the group's decision to change houses. Larger issues factoring into the decision included concerns about the fate of Marsh's smaller lines of business down the road, as well as a desire to move away from an earnings-per-share driven environment. Most of all, he said, the brokers wanted the opportunity to refocus their attention on providing clients with the highest possible levels of service.
The fine arts practice at Marsh, in its new, lean form, will continue to serve its fine arts clientele. However, many long-standing clients have reportedly already made the decision to follow the brokers they've come to know and trust.
That loyalty is particularly gratifying, said Steven Pincus, senior vice president and fine arts practice leader for DeWitt Stern. "We look forward to working with our clients in the future in an atmosphere where we'll be able to continue to provide them with high levels of service, with a lot of support from management--which is the owners of the company," said Pincus. "Being here in an independently owned, third-generation firm of the size of DeWitt Stern is really very exciting. We're very happy to be here."
April 1, 2006
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