Personal Business Manager vs. Financial Planner: What are the Differences?
“It's a very difficult job and the only way to get through it is we all work together as a team. And that means you do everything I say.” THE ITALIAN JOB (1969)
Written by Troy Kennedy Martin, Directed by Peter Collinson
(4-minute read)
I recently had two separate 45-minute conversations with a writer. At the end of our second call he asked me a finance question then stopped himself and said, “Never mind. My friend has a business manager. I’ll ask him.” I almost fainted. Did he forget that he was speaking to a Financial Planner? Did he not know what a Financial Planner does? The answer is probably a little from column A but much more from column B. He did not understand what I do.
When it comes to your money, it's essential to have the right professionals by your side. The most popular roles for this in the Entertainment Industry are agents, attorneys, and business managers. But why have business managers emerged above Financial Planners? Where does a Financial Planner fit into your life? I can confidently answer the second question. The first question is a little more difficult but I think I have a good idea.
Primary Objectives
Business Manager: Primarily focuses on managing the day-to-day business affairs of high-net-worth individuals or celebrities. They often handle bill payments, negotiate certain contracts, oversee payroll for personal staff, and manage other daily financial tasks. By the way, if you’re a high-net-worth individual or celebrity my number is 818-588-6892. Call me.
Financial Planner: Core objective is to help individuals plan for their financial future both short-term and long-term. Short-term goals could be personal budgeting, tax planning, getting out of debt, or building an emergency fund. Long-term goals may be retirement, purchasing a home, funding a child's education, investing, or estate planning.
Scope of Work
Business Manager: Their role can be quite broad. Aside from handling daily financial tasks, they may also be the conduit between lawyers, agents, or accountants on behalf of their client. They might even coordinate tasks that aren't strictly financial like scheduling or travel arrangements.
Financial Planner: Financial Planners typically perform tasks directly related to the financial planning process. This includes, but is not limited to, analyzing a client's financial situation, understanding their goals and values, recommending various strategies, and implementing these recommendations. They'll often monitor your plan and adjust it as necessary based on economic shifts or changes in the client's life.
Certifications and Training
Business manager: Doesn't necessarily require specific certifications, although some may have backgrounds in accounting or business management. Experience and reputation are more important in this field.
Financial Planner: To be recognized as a CERTIFIED FINANCIAL PLANNER™ (CFP®), individuals need to undergo specific training, education, and pass exams. They are also required to adhere to a code of ethics and maintain their certification through ongoing education. To own your own firm, a Financial Planner has to be licensed in their state.
Clientele
Business manager: Typically cater to the affluent segment of society – think celebrities, professional athletes, and other high-net-worth individuals — who have complex day-to-day financial and business needs.
Financial Planner: While many Financial Planners do serve wealthy clients, they also help people from various socio-economic backgrounds. Their services are valuable for anyone looking to create and execute a long-term financial strategy as well as tackle short-term issues.
Relationships with Clients
Business manager: Given the intricacies of managing daily affairs, business managers often build long-standing, deeply personal relationships with their clients. They're privy to the intimate details of their client's life and have a hands-on approach.
Financial Planner: Okay, this is where the two are very similar but it goes a step further with me. I love my clients. I enjoy the relationships I have built with them. While some interactions might be more periodic – during quarterly reviews or annual check-ins — we are constantly in contact and even share family vacation photos with each other.
My Hot Take
So how did business managers become synonymous with the Industry? Here’s my hot, spicy take: Celebrities. Celebrities with millions of dollars have often talked about their business managers. These are actors and directors with multiple homes, a line of clothing, a winery, their own tequila, and many other business ventures. They’re incredibly busy and want to make sure their gas bill gets paid too. It makes sense that Tom Cruise would hire a business manager. [NOTE: I do not know if Tom Cruise has a business manager. We are not on speaking terms.]
When a non-celebrity suddenly gets their own show or directs their first feature they feel like they’ve “made it.” Their next logical thought is, “Now that I’ve made it, I guess I should get a business manager. I hear that’s what you’re supposed to do.” But they’ve never answered the most important question of why?
The world of finance is extensive and everyone’s situation is different. Understand your needs and then choose the professional that aligns best with your lifestyle, goals, and values. And seriously, if you’re a celebrity call me.
If you’d like more information about Financial Planning you can schedule a Complimentary Meeting HERE.
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