Morgan Stanley's Anouchka Balog helps actors, screenwriters, directors and musicians develop long-lasting financial plans.
The fear of outliving their money is a concern shared by many wealthy individuals, but none more so than for actors and entertainers who may land multi-million-dollar roles and then never work again.
Anouchka Balog has built a significant business working with actors, screenwriters, directors and musicians who often struggle with unpredictable cash generation. The high profile of these successful entertainers makes them susceptible to offers from third parties looking to tap into their instant wealth. That’s where Anouchka, a Morgan Stanley Sports and Entertainment Director based in Laguna Niguel, CA, stands apart.
“I wasn’t coming with something to pitch, but a full, comprehensive life plan,” Anouchka, a Certified Financial Planner©, says of her initial contacts with entertainment clients.
Most of these clients want to address issues like life insurance, disability, education, retirement and estate planning, but no one had previously brought up such concerns or pointed them to resources to receive the proper guidance. Anouchka’s skills as a listener help her formulate a full picture of each client’s financial situation. Knowing what they do and don’t like helps her develop a financial plan that will best put them at ease.
“Every profession has its own unique characteristics, its own earnings profile and variable career spans. Actors, producers, and writers have different financial issues than musicians and DJs,’’ says Global Sports and Entertainment (GSE) Executive Director Sheri Wright. “Sports and Entertainment Directors like Anouchka understand the total financial picture, and craft creative strategies that account for the distinct financial dynamics of this type of client.”
Morgan Stanley created its GSE division in 2016 to concentrate firm resources specific to the unique needs of athletes and entertainers. Global Sports and Entertainment Directors like Anouchka, with years of experience working with this demographic, are selected to receive advanced education and support to help enhance and expand their services.
“[The Firm] does a great job on the marketing and education side talking about issues important to this group,’’ says Anouchka, who has been working with entertainment clients since 1993. “The training is about realizing the firm’s capabilities, such as Cash Management and Lending – for clients with uneven cash flows. That’s really helpful.”
Starting her career in an era dominated by transactional business, Anouchka made a commitment to financial planning that has not only led to a thriving wealth practice, but one especially well-suited to serving entertainers with unusual income needs.
“We have been able to connect well with this group because we listen deeply and intently and are there when they need us,” she says. “We guide them through tough times, are honest with them and help protect them protect them from others or themselves.”
One of the biggest challenges with actors, screenwriters and film producers is getting them to think past immediate gratification. Successful actors, for example, become accustomed to a certain lifestyle and spending level, and are often not comfortable scaling back if they stop getting lucrative roles and their income declines. Unlike salaried employees or small business owners with steady income streams, entertainers may go several years between projects. Shows can be cancelled and for certain roles like actors, they may not get meaningful work for the rest of their careers.
Anouchka and her team, which includes business development director Christopher Mullery and portfolio associate Ritamarie Kikawa, educate clients on the importance of spending within their means and saving for the future. This could mean purchasing the appropriate life insurance or establishing a college savings plan for their children. Convincing entertainment clients to start is not always easy. Anouchka overcomes objections by highlighting retirement and spending projections and sharing stories about peers in the movie business that squandered their fortunes.
“One movie executive earned a lucrative income for many years and was spending at high levels,” she explains. “We convinced him to start putting assets aside, saving for college, retirement, emergency funds, building long-term investment portfolios, paying for life and disability insurance and making extra payments on his mortgage on a yearly basis. We refinanced his mortgage as often as possible when appropriate to reduce his monthly expenses.
“When he did lose that income, he was ready. We restructured his expenses and refinanced one last time before he would lose the income. He was prepared and protected.”
Tapping her experience running a successful practice geared toward seniors that emphasizes wealth preservation, Anouchka also educates her clients to be prudent with their investments. As celebrities, they may be asked to invest in an illiquid vehicle like a film project or restaurant that may lock up their assets for years. She instead develops diversified investment plans that seek to limit illiquid investments to less than 10% of a client’s assets.
Anouchka started working with entertainers through referrals from the accountants and trust attorneys she regularly works with, as well as existing clients. Referrals, in fact, have been her exclusive source of new business during a 24-year tenure at Morgan Stanley. She has tapped a wide range of internal resources and regularly leverages Morgan Stanley’s tax and estate planning, philanthropy, lending, art advisory and lifestyle management knowledge.
This model has worked well, leading Anouchka to be recognized as one of the “Top 100 Women Financial Advisors” by Barron’s from 2007 through 2014 and in 2016, as a “Top 400 Financial Advisor” by the Financial Times in 2014 and most recently, as one of Forbes “Top Women Advisors in America” in 2017. She currently manages $560 million in client assets.
Anouchka is still familiarizing herself with all the resources available through GSE, but the partnership has helped sharpen her focus on the future. “I want to start working more with women in film and help them with philanthropy by starting up a foundation they can take advantage of,’’ she says. “I see tremendous potential there.”