“Fifty percent of the commission goes to the art or wine advisor, and 25% goes to the financial advisor who referred the client, and 25% goes to the house,” Rogers explains.
About 20 clients have used the program so far. “But those 20 are very high-net-worth clients, and so far it’s been great for everyone. We’ve got great feedback from our clients who’ve used the service,” Rogers says. “Maybe Sandra’s business with the insurance is more of a one-time engagement, but art and wine are a passion, so once a client gets engaged in it, it’s an ongoing thing where they build a collection.”
Rogers described how one of his firm’s big clients got in touch with Steve Morgan, the wine advisor, when he downsized from a very large home to a penthouse apartment on Lake Shore Drive. He had a bunch of cases of very fine wine, including roughly 20 cases of Château Latour 1979, that he needed to sell.
“Steve and him worked behind the scene with a couple of potential buyers,” Rogers says. “He could have sold that wine on Sotheby’s, but he’d pay a 25% commission on that. Instead, he got a much better deal working with Steve.”
Before he started Arete 11 years ago, Rogers was the complex manager for Ameriprise Financial in the Chicago area. Earlier in his career, Rogers had left Georgetown Law to pursue innovation at an intellectual property studio run by Jay Walker, later the founder of Priceline.com. While there, Rogers co-invented a number of patents, including the “name your own price” e-commerce patents behind Priceline.com, as well as a number of patents in the quick-service restaurant industry. He cashed out of stock positions he’d gathered related to Priceline and launched his new firm with his own capital.
Rogers’ outside-of-the-box thinking also led to the Art & Wine Advisory, as well as other ways to place his clients in non-correlated assets. These range from venture capital and angel investments to private equity deals and university-style endowment investments. This summer, Arete plans to roll out a service to enable its clients to find, acquire, invest in, store and insure exotic luxury cars. This will be under the Lifestyle Services umbrella that includes art and wine.
While Arete is pleased with its rollout of the art and wine program, the firm recognizes it could benefit from an internal public relations boost.
According to Nate Moster, Arete’s chief marketing officer, “We kind of launched it and said, ‘It’s here. It’s great.’ But this whole mentality of ‘Let’s build it and they will come’ doesn’t necessarily work with high-net-worth investors because they don’t have a lot of time.” He adds that he plans to start a newsletter this year aimed at interested clients that will provide insights, industry articles and advice from the firm’s hired experts regarding art, wine and exotic luxury cars.