Internet influencers seek Wall Streets help to manage newfound wealth

Michael Deininger-Bell, GamingWithJen, Logdotzip and Mikhaella Norwood are backstage in the Winners Cave during the 11th Annual Shorty Awards on May 5 at PlayStation Theater in New York City.

Jenn Im started making YouTube videos as a hobby nine years ago, a way to express her love for turning thrift-store finds into stylish outfits.

Creating content for her channel soon became an obsession, and by the time shegraduatedfrom college in 2013, Im was making enough money to support herself. She now has more than 2.4 million subscribers, sponsorship deals with companies including Levi Strauss & Co., Calvin Klein Inc. and Colourpop Cosmetics, and even her ownclothing line.

But as money rolled in, Im was unsure what to do with her steadily growing fortune, most of which was in a bank account drawing little or no interest. Eventually, she turned to a wealth manager at First Republic Bank.

Growing up, money was always an issue in our household and as much as my parents wanted to be involved, they didnt have any knowledge of investing or financial planning, Im, 28, said in an email. It was also hard because I felt like some of the teams I met with didnt understand my business or the digital media space.

Influencers like Im, who can haul in seven-figure incomes by attracting large digital followings, are drawing the attention of wealth managers looking to expand their client bases. While many YouTube vloggers pitch products such as cosmetics or clothing, others are racking up millions of views posting videos of themselveseatingludicrous amounts of food,whisperinginto the microphone to induce tingles,sharingtheir five-day prep for the Coachella music festival or simplyreactingto other videos.

But this industry is no joke. The influencer advertising market is expected toreach$5 billion to $10 billion by 2020, according to marketing firm Mediakix.

Influencers realize they need wealth advisors early in their careers, said John Mele, an executive director in Morgan Stanleys sports and entertainment unit. They are equally serious about monetizing their brand as well as protecting and growing the money they earn from it.

Tyler Pappas, also known asLogdotzip, was catapulted to fame when one of his YouTube gaming videos went viral. In three months, he went from not having enough to pay utility bills to getting his own place for the first time.

Rather than relying on more traditional wealth advisors to help manage his money, Pappas sought out Mike Bienstock, founder of Semaphore, a firm that handles tax and business solutions specifically for YouTubers.

Its not that I didnt make considerations to look at other things such as banks, according to Pappas, 27, who said he now makes six figures annually and runs an eight-person production firm. Its that I didnt even really know they existed.

Thats not unusual for many young influencers, most of whom backed into what became lucrative careers and have little experience with the financial system beyond checking and savings accounts.

These are not people who had a lot of money and decided to start a business, said Bienstock, whos based in Irvine. This is pretty much first-generation wealth across the board.

As a result, traditional wealth managers dealings with clients need to be authentic, intentional and genuine in nature, said Mason Champion, a Morgan Stanley senior vice president in the sports and entertainment group.

This level of confidence is remarkably unique within the influencers world, which is so oftentimes enveloped by countless individuals offering an endless supply of empty affirmation, Champion said in an email.

Influencers earnings can be lumpy, as their income is based on the unpredictable habits of social media users and the number of page views they generate. Consequently, wealth advisors who handle their money need to be flexible and plan on an almost month-to-month basis, according to Jason Kirsch, founder of millennial-focused financial-planning firm Grow.

Many influencers are young and theyre expanding in ways that we havent seen before, said Kirsch, who has advised social media stars who bring in as much as $2 million annually. In many cases, we dont want to put their money away where theyre not going to be able to access it for 20 years.

That means steering clients into stable, liquid assets so they can jump on opportunities as they arise, Kirsch said. When it comes to savings, his clients are salting away cash for standard goals: cars, houses, retirement.

Bienstock said some clients — aware of how tenuous newfound wealth can be — are looking for a cushion. For comforts sake, they tend to need bigger reserves, because they never want to go back to how things used to be, he said.

So far, working with a wealth advisor has been amazing, according to Im, who declined to say how much she pulls in annually from her YouTube channel.

It feels really good to have someone in my corner that I trust, who is watching my investments every day, she said. It allows me to focus on other things that are important, like my family and creating new content.

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