How to Land Celebrity Clients

By Amy McIIwain, President, Financial Social Media on Wednesday, June 13th, 2012

Truly marquee-worthy clients like Lady Gaga add more than AUM. If you can figure out what makes them tick, the experts say you can parlay one household name into a high-powered referral machine.

It really boils down to the way fame works, the star trackers say.

“Except for certain celebrities, wealthy people who are influential by almost every other measure don’t serve as role models when they purchase goods and services,” says noted wealth marketing consultant Russ Allen Prince, co-author of The Influence of Affluence and Fame & Fortune.

While those non-celebrity clients are influential in their own social sphere, their endorsement doesn’t stretch far beyond friends, family and colleagues.

But a big name will unlock doors just about anywhere. Everybody knows who Derek Jeter, Kevin Bacon, Paul McCartney are, so their money managers become minor celebrities in their own right.

You don’t need to trade on a famous client’s name -- ironically, getting people who actually use your services to endorse you counts as a testimonial and is forbidden under SEC regulations.

Still, simply adding “and movie stars” to your client profile should instantly differentiate you from everyone else who can only say they work with the same old “small business owners, executives and wealthy families.”

And there are no rules against asking your celebrity clients to recommend you to other members of the glitterati. If anything, stars are more desperate than more button-down investors to get competent financial advice.

“Celebrities and athletes often ask their peers to recommend professional advisors, even though those friends may not have made the best decisions themselves,” says lawyer Martin Shenkman, a star estate planner in his own right.

So once you get that first celebrity on your books, the next should be relatively easy. Just ask your star for referrals as often as you do your other clients and rest assured that he or she knows more  actors, musicians and pro athletes than the typical millionaire.

Entertainers know other entertainers. Look at Lady Gaga, for example -- while she’s outrageous with her blue hair (this week), she’s friends with establishment celebrities like Tony Bennett.

If she wants a financial planner to give her life some sanity, she’ll ask her friends like Bennett who they recommend.

Hitching your wagon to that first star

Courting that first celebrity, of course, takes dedicated effort and even a little luck.

I’ve talked to dozens of advisors over the years who focus on local sport stars just to get that close to the big show, so the athletes are probably the most highly prospected people on the planet.

There’s a reason there are entire lead generation services that specialize in giving advisors their shot at baseball and football pros.

Instead of going that obvious route, make friends with the lawyers and agents who are already working with the teams -- the Jerry Maguire types.

They’re probably already working with advisors, but you never know when a relationship won’t work out and you’ll be called up from the bench.

And you don’t have to live in Hollywood, Nashville or any other center of the entertainment industry.

Advisors who are serious about adding some celebrity power to their book can always prospect friends and family that a star who grew up locally left behind.

These people rarely have the assets to interest many advisors in themselves, but if they have a famous ear, they become valuable referral sources if and when the star wants to get a dose of reality.

Professional, polite, honest

The bohemian reputation of some celebrity professions can even play in your favor.

At least two hard rock stars -- Duff McKagan of Guns ‘N’ Roses and Gene Simmons of KISS -- have started their own wealth management firms because they were tired of seeing their friends ripped off.

As McKagan’s firm, Meridian Rock, puts it, “historically and too often in their careers, the wrong deal has done for the artist.”

Plenty of crooks out there are eager to prey on artists who know a lot more about acting or songwriting than the stock market. Bernard Madoff’s client list, for example, included quite a few A-list actors who got burned right along with the hedge fund types.

Give them the same professional service you give any other high-net-worth investor. After all, as Russ Prince points out, “celebrities deal with issues that impact Americans of all financial backgrounds, such as depression, divorce, childrearing and asset protection planning.”

Of course, some of the specifics will vary from the typical high-net-worth client. Sports stars have extremely short careers, so Martin Shenkman suggests radically compressing lifetime earnings expectations when planning for them and their families.

Asset protection is a must, given the tendency of high-profile money to draw nuisance lawsuits.

And any estate plan simply has to assign the right to use the celebrity’s likeness, song catalog or other intellectual property along with the hard assets -- otherwise, your client runs the risk of following in the footsteps of stars like Bob Marley, who died without a will and doomed his recordings to legal limbo for years.

Simply raising these issues can make any advisor stand out in the eyes of the celebrities he or she is trying to impress.

After all, according to Duff McKagan, the “erratic” star is a stereotype. Advisors might be surprised at how serious even the “hedonists” in the rock world can be when their money is on the line.

Scott Martin is the Senior Editor of America’s leading wealth management e-newsletter and has been tracking various aspects of the financial industry since 2001 for publications like Research, Buyside and Institutional Investor. Previously, he was a market writer for CNN. As an advocate for the trust industry, he has testified to the Nevada Senate Committee on Commerce, Labor and Energy on issues of national competition. He is also active as a marketing and editorial consultant for registered investment advisors.

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