Multifamily offices are continually developing operational structures to address the needs of uniquely wealthy people. One example of this is the celebrity multifamily office, which serves highly successful entertainers and athletes.
Celebrities can especially benefit from the coordinated approach of a multifamily office. Of course, the staff must be expert at overseeing the integration of investment management, wealth planning, private investment banking, business strategy and related support services to properly serve celebrities.
While most high-profile celebrities appear to have a charmed life, they usually have an intense back-story filled with frustrations and anxieties that cannot be overlooked. Even when they have achieved levels of fame and fortune that are craved our culture, most celebrities such status has its drawbacks. Moreover, most entertainers and athletes have a limited window in which they can earn consistently high incomes, so they need a strong team of professionals to help them protect and leverage their assets into something greater.
Celebrities seeking a financial advisory relationship are increasingly attracted to the multifamily office model, which integrates select core aspects of a business manager’s job with a broad array of financial and legal expertise. Studies of celebrities show they are turning to multifamily offices, which can help them navigate their financial worlds and are nimble enough to offer customized business strategies and support services.
Celebrity multifamily offices offer a broad array of expertise. Many of the most successful ones have a very strong emphasis on wealth planning. The ability to effectively mitigate taxes and insulate wealth proves to be more important for most celebrities than investment management. For example, the ability of an entertainer to leverage their loan-out corporations, thereby lowering taxes, can prove extremely profitable.
Offering business strategy and support, handling licensing agreements or business ventures with the celebrities’ names attached and helping them capitalize on their success to generate wealth is integral to a well-functioning celebrity multifamily office. All too often, less knowledgeable advisors will let celebrities who are not well versed in these areas dive into business deals with a very limited chance of success.
The celebrity multifamily office offers two critical advantages to successful entertainers and athletes. One is an in-depth understanding of the celebrity world. More important, however, is the ability of the multifamily office to serve entertainers and athletes in a holistic manner.
While a top-notch multifamily office will provide solutions to specific issues, problems and needs, its services should also be all-encompassing and comprehensive. This will allow it to provide more effective and efficient solutions for celebrities, in whose lives the personal and professional are often closely intertwined.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.