"It's a very complex issue," says Mirkine, who founded the Sports Financial Advisors Association seven years ago to help those financial planners working with professional athletes. "For instance, [athletes] have to file a tax return in every state in which they play a game. No two athletes are going to play the same way. They have different skill levels. The length of their careers will be different."
An advisor also has to anticipate injuries and know if the athlete is guaranteed payment when hurt and off the field.
It's easier to devise a good financial plan for an entertainer than it is for an athlete, Cole says, because the average entertainer tends to be better known and thus more marketable. He also typically has a longer earnings window and often residual income streams.
Morgan says a celebrity advisor needs to have "tremendous patience," because many people working in the entertainment industry are not well versed in investing or asset allocation.
"You have to ascertain what do they know about money, and very often it's not that much because we don't teach it in schools or colleges," agrees Black-Scott. "You have to be prepared to teach them about money. ... You may have to explain the difference between stocks and bonds."
She says some people do not even understand that, regardless of who they voted for in the last presidential election or whether they support the current administration in Washington, they still have to pay taxes. "That may sound like a ridiculous statement. It isn't," Black-Scott says.
About a quarter of Morgan's clients are in the entertainment industry and they tend toward extremes even more than the typical investor. "In good times, they are overly aggressive; in bad times, they are overly conservative," says Morgan.
Black-Scott says many clients, particularly those involved in the movie industry, will invest only in bonds-even though they will not make as much money there-because they want the safety.
On the other hand, some celebrities are easily swayed by the fads their peers may be promoting. For instance, they ask about investing in gold more than any other group of clients, he says.
"We have clients who come up all the time who want to do some pretty risky things in terms of investing," he says. "We tell them to take a couple of deep breaths and forget about it."
Morgan says he was able to talk several clients out of investing with Madoff, whose celebrity victims, according to The Wall Street Journal, included movie mogul Steven Spielberg; actors Kevin Bacon, Kyra Sedgwick and Zsa Zsa Gabor; and talk show host Larry King.