Entertainers, athletes and other celebrities hold a much smaller percentage of the world’s significant wealth than business people, but they are more visible and have to contend with a different set of issues.
While most rich people try to stay out of the spotlight, high-profile individuals don’t have that option. The public has a nearly insatiable interest in how celebrities spend their time and money and, as a result, there are a number of media outlets dedicated to the subject.
This scrutiny creates issues for celebrities that don’t exist for most other affluent people, making for a very distinct group within the affluent universe.
Celebrities often attract a disparate group of people who are all looking for something—employment, connections, friendship, endorsements, introductions, opportunities, a piece of the action.
Moreover, celebrity wealth is often fleeting and prone to drying up when circumstances change.
They’re often much younger than other rich people, on average, and therefore have longer to live and earn and manage their money.
Celebrities can be divided into two groups. Most are status-oriented. These entertainers and athletes understand that a high profile can translate into preferential treatment, new opportunities and favorable contracts. They believe their reputations confer power and status and they work hard to develop and maintain them. Celebrities that are status-oriented are more likely to be wealthier, consider themselves a business, feel stressed out by the demands of their career, and have a more intense fear of failure.
The other celebrities fall into a group that can described as craft-oriented, focused on mastering their chosen field. They are interested in skill development and high-quality opportunities that match their interests and strengths. Craft-oriented celebrities tend to have less overall wealth and less focus on the business aspects of their careers, but are more aware of the fleeting nature of fame.
The celebrity market can be lucrative and rewarding for financial professionals, but it’s considered a difficult market to succeed in. Advisors need insight into the mind-set of wealthy celebrities and the segmentation scheme noted here is a meaningful step in that direction.