RR: You specialize in counseling entertainers. How would you describe the state of the entertainment industry today?
JF: While it's often glamorized, in many ways the entertainment industry is no different than any other business. Unemployment has risen significantly and many have seen their income slashed. Decreased advertising revenue for network television, lower DVD sales and rentals and dramatic reduction in risks that movie studios are willing to take on new projects are each partly responsible.
RR: Do you advise out-of-work actors or screenwriters in a way that's similar to those in more mainstream professions? What's different about their planning needs?
JF: In Hollywood, one can suddenly go from being a waiter to making hundreds of thousands of dollars by starring in a television show or selling a script. The challenge lies in setting aside ample funds to prepare for the inevitable income drought or simply to cover the period of time until the next payday. This poses a number of planning challenges, since amounts allocated to emergency funds have to be significantly larger than the general population due to the rollercoaster nature of this business. We encourage saving when possible for retirement and often recommend trying to shelter as much as possible in pension plans as future earnings are uncertain.
RR: The entertainment industry has always been associated with the “sudden wealth effect.” We see a similar phenomenon today with many coming into large inheritances and settlements. How do you manage the sudden wealth effect?
JF: The “Sudden Wealth” effect is common and often expected in Hollywood but can happen to almost anyone. Its impact is usually felt in more ways than one. Often, when friends and family learn of someone coming into significant wealth, that person both intentionally and unintentionally becomes a quick and easy target for those seeking favorable loans, investments or simply gifts.
RR: How do you maintain your firm's image in an age of scandal?
JF: Client communication is the single most important factor. We regularly meet with clients to ensure they understand the status of their portfolios and to determine if there are any events that may warrant changes. We also host client events at our office to offer additional opportunities to learn about and discuss market trends.
We emphasize various checks and balances to ensure client assets are as secure as possible. This includes maintaining clearing relationships with some of the biggest firms. Additionally, having a quality, independent broker-dealer such as Mid Atlantic Corp., provides back-office support and oversight that offers yet another layer of scrutiny and assistance.