Klingenstein Fields & Co. LLC isn't looking to make a radical break from its tradition of sober asset management for wealthy families.
But over the past two years, the eighth-largest firm on the
InvestmentNews list of RIA Giants has developed a new niche: serving high-net-worth individuals and families in sports and entertainment.
Although its Asset Management Partners unit, which specializes in this glamorous submarket, accounts for less than 5% of total revenue, the firm is convinced of its potential.
“Athletes and entertainers often are taken advantage of by the investment community at large,” said Kenneth Pollinger, chairman of the unit and chief executive and vice chairman of Klingenstein Fields. “There's a whole cadre of people who glom onto these young people; we're able to provide unbiased advice.”
To gain entree to the niche, AMP recently began working with a West Coast firm that provides bill-paying and tax preparation services to the target market but doesn't manage money.
“Your partner can be an amazing referral source if you partner properly,” said Ray Sclafani, president of ClientWise LLC, which coaches advisers.
But there are downsides to working with athletes and entertainers, he cautioned.
Clients tend to be younger and are not accustomed to having wealth, Mr. Sclafani said.
As a result, they can burn through their assets quickly, even if an adviser tries to caution them against overspending, he said.
Mr. Pollinger concedes that many young, wealthy athletes and entertainers may not be suited to his firm's conservative practice. He said that his colleagues are careful about screening prospects and want only those clients with a long-term approach to their finances.
“The average career for an NFL player is only three and a half years,” he said. “We need them to be thinking longer than that.”
E-mail Lisa Shidler at [email protected].
