Jenn Im started making YouTube videos as a hobby nine years ago, a way to express her love for turning thrift-store finds into stylish outfits.
Creating content for her channel soon became an obsession, and by the time she graduated from college in 2013, Im was making enough money to support herself. She now has more than 2.4 million subscribers, sponsorship deals with companies including Levi Strauss & Co., Calvin Klein Inc. and Colourpop Cosmetics, and even her own clothing line.
But as money rolled in, Im was unsure what to do with her steadily growing fortune, most of which was in a bank account drawing little or no interest. Eventually, she turned to a wealth manager at First Republic Bank.
“Growing up, money was always an issue in our household and as much as my parents wanted to be involved, they didn’t have any knowledge of investing or financial planning,” Im, 28, said in an email. “It was also hard because I felt like some of the teams I met with didn’t understand my business or the digital media space.”
Influencers like Im, who can haul in seven-figure incomes by attracting large digital followings, are drawing the attention of wealth managers looking to expand their client bases. While many YouTube vloggers pitch products such as cosmetics or clothing, others are racking up millions of views posting videos of themselves eating ludicrous amounts of food, whispering into the microphone to induce ‘‘tingles,’’ sharing their five-day prep for the Coachella music festival or simply reacting to other videos.
But this industry is no joke. The influencer advertising market is expected to reach $5 billion to $10 billion by 2020, according to marketing firm Mediakix.
“Influencers realize they need wealth advisers early in their careers,” said John Mele, an executive director in Morgan Stanley’s sports and entertainment unit. “They are equally serious about monetizing their brand as well as protecting and growing the money they earn from it.”
Tyler Pappas, also known as Logdotzip, was catapulted to fame when one of his YouTube gaming videos went viral. In three months, he went from not having enough to pay utility bills to getting his own place for the first time.
Rather than relying on more traditional wealth advisers to help manage his money, Pappas sought out Mike Bienstock, founder of Semaphore, a firm that handles tax and business solutions specifically for YouTubers.
“It’s not that I didn’t make considerations to look at other things such as banks,” according to Pappas, 27, who said he now makes six figures annually and runs an eight-person production firm. “It’s that I didn’t even really know they existed.”
That’s not unusual for many young influencers, most of whom backed into what became lucrative careers and have little experience with the financial system beyond checking and savings accounts.
“These are not people who had a lot of money and decided to start a business,” said Bienstock, who’s based in Irvine, California. “This is pretty much first-generation wealth across the board.”
As a result, traditional wealth managers’ dealings with clients “need to be authentic, intentional and genuine in nature,” said Mason Champion, a Morgan Stanley senior vice president in the sports and entertainment group.
“This level of confidence is remarkably unique within the influencers’ world, which is so oftentimes enveloped by countless individuals offering an endless supply of empty affirmation,” Champion said in an email.