Advisors Who Attract Celebrity Clients Gird For Some Heavy Lifting

A longtime sports fan, Michael Conway decided early in his advisory career to seek top athletes as clients. Over the years, he has attracted several professional football players to his practice.

Like many advisors with celebrity clients, Conway enjoys working with prominent individuals. But he doesn’t rely on them for the bulk of his business.

“Professional athletes are one of many types of clients that I have,” said Conway, a certified financial planner in Parsippany, N.J. “I don’t advertise it. I don’t make a big deal of it.”

Advisors with a high-profile clientele face special challenges. Providing superior service — and helping clients attain their financial goals — becomes harder if advisors deal primarily with a celebrity’s agent, manager or other handler.

Moreover, an advisor must proceed with care when crafting a marketing strategy. Client confidentiality rules prevent wealth managers from revealing the glamorous stars or famous jocks that they advise.

Even if celebrities give consent to their advisor to mention their name, strict rules govern client endorsements and testimonials. Hyping celebrity connections to attract new clients can lead to trouble.

“We obviously don’t advertise who we work with,” said Jimmy Lee, an advisor in Las Vegas, Nev. “Confidentiality is critical.”

Lee works with professional coaches, athletes and entertainers. Rather than promote his celebrity clientele, Lee focuses on branding himself as a “personal CFO” who provides a range of comprehensive financial-planning services.

Hard Work

For many advisors, generating a roster of celebrity clients starts with one simple step. In the early 1990s, Conway cultivated relationships with sports agents. Eventually, they introduced him to athletes who signed on.

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Similarly, Lee says a friend knew a top coach because they had competed against each other in college. About eight years ago, the friend made the introduction and the coach became Lee’s client.

“It evolved from there,” Lee said. “As I got to meet other coaches and athletes, we learned there was a real need in that area for financial planning, and I saw there was a niche we could be competitive in.”

From the outside looking in, advising household names with sizable assets may seem like the pinnacle of success. But it’s hardly a slam-dunk.

Advisors sometimes find that celebrities are fickle consumers who bring unreasonable expectations to the relationship. And with limited time to spend on financial issues — or little interest or understanding of such matters — they can prove easily distracted.

“Working with professional athletes is a difficult task,” Conway said. “They may not have all the reference points that a CEO has, and they may lack a deep knowledge of financial markets. So we do a lot of education, both with the client and their family members.”

To add to the challenge, star athletes or hot young actors tend to generate big paychecks in a condensed time frame. An advisor must help them plan for a financial future that may not match their current earnings.

“Take a football player with an average NFL career of 3-1/2 years,” Conway said. “They may have a life expectancy of 90 or 100, so you have to make sure that their capital lasts for the next half-century or more.”

A Good Fit

Outsiders may assume that advisors crave celebrity clients and pursue as many as they can. In truth, however, those who grow accustomed to serving high-profile individuals are selective about choosing their clients.

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“I want to make sure it’s the right fit and someone is comfortable with me and willing to listen to me,” Conway said. “I want to work with people who will let me be blunt and let me coach them.”

When meeting prospects, Conway initiates what he calls “a discovery process” to learn what makes others tick. He asks questions such as, “What’s important to you about money?”

In some ways, celebrities are no different from less-famous folks. A small subset of them may listen poorly, make unreasonable demands, lack ethical standards or insist on taking inappropriate levels of risk.

Conway adds that some celebrities, especially young athletes who sign big contracts, may spend irresponsibly. He says they may “want to buy a $3 million house, not a $500,000 house, and get resistant if you push back.”

Advisors usually prefer to counsel celebrities who take a keen interest in financial matters and express curiosity about investing and managing their wealth. Ideally, they develop a lasting, direct relationship with these noteworthy clients.

“If they’re too far removed from the process, or if too many gatekeepers stand between them and us, then it probably won’t work out,” Lee said.

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