It’s not unusual for Joe Farren and his team of financial experts to occasionally come across clients who have suddenly inherited a windfall and are not equipped to manage the influx of money.

“We often see sort of a lack of financial sophistication in terms of how they should manage their lives,” said Farren, the president of Aquilance, a financial administration company that provides personal day-to-day financial management for ultra-wealthy and wealthy individuals.

That newly wealthy naïve client, Farren said, runs the gamut from athletes, entertainers and CEOs to other top-tier executives, and people associated with business that are experiencing liquidity events. And then there are the individuals with the startup or the entrepreneur “who hit it big with an idea that catches fire and all of a sudden they’re managing a business and they’ve got this massive infusion of cash,” he said, adding that this is overwhelming for anyone.

Farren said they see it more often with young athletes “who are getting these massive [contracts] and oftentimes they are coming from backgrounds where there weren’t good financial underpinnings, no real sense on how to manage money,” he said. “The thing of it is if you were not brought up with that level of wealth, you don’t think about revisiting your lifestyle and the security point of view."

Farren said there is “a complete lack of awareness” on the part of that segment of his client base that wants to cling on to old behaviors. And while they cannot force people to change their ways, Farren said he and his team try to educate those clients on certain behaviors and habits that they need to set aside. The hope, he said, is that “an informed person can start to think about these things and understand that there is a pro and a con or a ramification."

Here's some of the advice Farren has for newly wealthy clients:

Use Caution On Social Media
Farren noted that the younger generations especially are more generous with sharing personal posts on social media. As an example, he said, it's not a good idea to reveal on social media that you're on a private jet, flying out of a particular small airport. “You’ve now really narrowed the opportunity for somebody to find you,” Farren said. Avoid being a target and share information about your trip once it’s over, he said.

Don’t Underestimate Insurance
Farren said that with with a windfall comes the massive house or a second home, domestic staff, collectibles, and possibly  an art collection. So, you need a much more robust insurance footprint, he said. “Oftentimes, when you’re new to wealth, you don’t understand the complexities of things like having excess insurance and umbrella policies,” Farren said, noting that people don’t think to review their insurance, especially when they buy a home with cash. “There is no mortgage and so there is no mandate by the bank that you be insured. So people have gone uninsured because they didn’t think about it because they wrote a check for the home,” he said.

Have A Good Team Of Professionals
A team of professionals with various disciplines who are looking out for your best interest makes a big difference, Farren said. For example, that team would include an attorney that will review contracts and ensure everything is safe and that you are not opening yourself to liability; a financial management company that will aggregate all spending and provide comprehensive reporting on assets and liabilities; and a financial advisor who can give guidance on a retirement plan. Others to include on the team are a tax expert and an accountant.

Be Careful When Hiring Domestic Help
Farren said as people come into wealth, they often begin to hire people to assist with their properties, like nannies and someone to do the housekeeping and yard work. Farren recommends working with a management company to vet the potential hires. He said there is a tendency with some clients to think they can pay their domestic workers with cash or under the table. But that’s problematic because you’re most likely not going to have a worker’s compensation policy that covers slips and falls, he said.

For example, he said, if a worker is “dusting a chandelier and falls off the ladder and break a hip and an arm, there is going to be a chance they are going to sue and if there is no workman’s comp, then they are getting the money out of you,” Farren said. “And the other thing is that if there is ever an issue with termination and they are not being paid correctly in terms of withholding and payroll, they might come after you for what they thought was going to be a Social Security benefit that they had when they retire.”

Farren said one of the things they see often is that people will say “I’ll just pay them as an independent contractor.” But it’s not that simple because most state and federal laws make it difficult to meet the criteria for a domestic employee, he said. “It’s a lot of risk not doing payroll correctly,” he said.