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Most professional athletes, artists and musicians owe a lot to their parents, managers and coaches who pushed, empowered and encouraged them as they rose to the top of their game.

It’s natural they would want to keep this team of personal supporters around them, to stay grounded, provide advice and share in their success.

But reaching new heights in a professional sports or music career also means adding new members to the team, with a focus on handling the financial success that comes with signing a multi-million contract, receiving royalties or other financial rewards.

Just as athletes and entertainers get exposure to the best coaches, directors and producers as they ascend to the heights of their careers, should also surround themselves with the best wealth management advice.

That often includes a financial advisor or relationship manager, banker, accountant and lawyer, who specialize in working with professional athletes, musicians or other celebrities. Parents, friends or family advisors may have done a good job managing their money to date, but may not be experienced in the new world of high net worth investing, estate planning and brand management where the focus is more on preserving and managing wealth.

“Once you have specialist requirements – whether it’s medical, financial or legal — you have to go to a specialist,” says Jonathan Gold, director of RBC Wealth Management International in London, United Kingdom.

“The same goes for people handing huge windfalls” in professional sports, music or other high-performance careers.

“If you’re earning millions of dollars a year, it becomes a different skill set, not only in terms of understanding the ramifications and asking the right questions for the client, but also allowing them to understand the various pitfalls,” Gold says.

Too often, he says people close to the athlete or musicians don’t want to talk about the potential issues that could arise.

“What they get from professional advisors is the ability to tell someone ‘that’s not the right thing to do.’ That is really something that I think is quite fundamental,” Gold says.

Building the right team

The main purpose of building a specialized wealth management team is to ensure they can manage large sums of money that may come at once, including multi-million contracts and advances, says Denise Colletta, senior vice president and team leader in entertainment division, at City National Bank, specializing in the music industry.

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When looking for a financial or legal professional, Colletta recommends the athlete or musician ask a lot of questions up front. That includes not only the advisor’s qualifications and experience with clients in the sports and entertainment industries, but also asking for references, where possible, and examples of how their clients’ wealth needs and goals were met.

The prospective financial and legal professionals should also be open to working in a team environment with the wealth management advisors, as well as engaging with parents, coaches and managers, to ensure everyone is working from the same song sheet, so to speak, says Colletta.

“The banker and wealth advisor should be working in tandem with the attorney so they’re in lock step about the direction of your career,” Colletta says.

The team needs to sketch out a “road map” towards managing significant step-ups in wealth if the client’s career soars to new heights, they go on tour, sign a major brand ambassador agreement or release a new album. The team also needs to manage for the future when the client’s career, family or life goals change, including the client’s desire to take a career break, or have to stop performing entirely due to injury or illness.

“It’s a lot about communication throughout each stage of client’s career,” she says.

A common mistake Colletta sees is a reluctance to add new, experienced professionals to their financial team, while friends and family may have your best interests in mind they may not be able to see the risks or pitfalls that come with managing large amounts of wealth.

“Having the right attorney, business manager and banker are often the pillars of financial success for these professionals,” Colletta says.

Some of the most valuable counsel which a professional financial team can offer is tough advice about how to maintain wealth for the long-term, especially to assist with planning for any unforeseen changes and setbacks.

That might mean such basic advice as encouraging the client to buy a US$3 million home (£2.11 million), instead of a $10 million home (£7 million), for example.

“It’s always good to have enough cash in reserve for a rainy day,” Colletta says, no matter how wealthy you are today.

Managing risk for early career ending

In investment planning, most people ask: “What’s the return I can get and what’s the risk?’” says Gold.

The question professional athletes and musicians should ask is “What if something goes wrong?” Gold says.

In this case, it doesn’t mean with their money, but their career.

“Their careers are very fragile,” Gold says.

Examples are unpleasant but necessary to consider including a singer who loses their voice to a vocal chord injury, a guitarist losing a hand in an accident, or cricket player with a heart condition that keeps them off the field, forever.

“You’re in a high-risk industry and are the sole practitioner,” Gold says. “These people need to think not just about risk and return, but liquidity.”

Gold says athletes and artists also need professional legal and financial advice on contracts they may sign with employers as well as brands.

“Even though it’s written on paper, they often need to be encouraged to ask questions about what might happen that’s not included,” Gold says.

He says experienced financial and legal professionals can raise potential flags or scenarios that someone not involved in the business may not realize.

Gold says friends and family mean well, but may be more reluctant, or simply aren’t prepared to talk about what could go wrong in their careers. Their role is often to boost confidence, not talk about the negatives.

Paul DeLauro, a Beverly Hills-based senior vice president and manager of wealth planning for City National Bank, says the onus is also on the financial industry to work together to protect athletes, musicians and other celebrities from the risks that come with their new high net worth status.

“We need to collaborate, to work together more effectively to help ensure these clients’ needs are met – to arm them with the proper advice to manage their financial decisions,” DeLauro says.

By building the right team to look after financial and legal affairs, athletes, musicians and other celebrities can leave the business side to the professionals and focus instead on their own skills, and taking their careers to the next level.