High incomes, high needs

But dealing with this type of clientele isn’t always a walk down Hollywood Boulevard. “I have to take a conservative approach with these clients because it’s an industry that can change very quickly for them,” Zakka says. “Sometimes, their careers are red-hot and everyone wants to hire them. Then, they could be out of work for the next year.”

Getting in touch with a celebrity can be extremely difficult, so Zakka deals directly with their agents and business managers, many of whom hold power of attorneys for their clients’ financial affairs. The majority of Zakka’s client accounts are either managed discretionary accounts or separately managed accounts that have third-party pension managers.”You don’t want to be stuck waiting to hear back from someone,” Zakka says, “when they can be filming up to 16 hours a day and you need to make a change on their portfolio.”

Like any book of business, confidentiality is key, but Zakka has to take extra precautions when mailing out any documents or information that could end up in the wrong hands. For one client who stars on a popular TV show, Zakka addresses all mail with a pseudonym to protect his/her identity.

“It’s a different world for some of these clients,” Zakka says. “And we have to protect them from the risks of stalkers or the paparazzi who are trying to track them down.”

Many of Zakka’s clients reside in Hollywood but also maintain a residence in Canada. Zakka makes the effort both to fly to Los Angeles once a year to meet with clients face to face and visit them if they are in Toronto for events or filming.

With many of these clients having dual residences, some cross-border planning is involved. With Zakka’s U.S.-based clientele increasing, he is in the process of obtaining the necessary credentials to provide investment advice in the U.S.

With respect to prospecting among such a famous population, Zakka says, it’s vital to network with the community of agents and business managers who serve celebrity clients. “It’s the agents or business managers,” he says, “that will be able to either introduce you to other clients they manage or to other agents or business managers who are looking for a Canadian advisor.”

Getting into this highly competitive niche usually requires some luck – just like show business itself. Zakka’s break came early in his career, when a family friend introduced him to a chartered accountant who had some clients in the entertainment business. Soon after that initial meeting, the accountant began to refer some of his celebrity clients to Zakka, who reciprocated by referring some of his own clients to the accountant.

It’s an arrangement that continues to this day, Zakka says: “Having someone who can strongly recommend you is important when you are dealing with the ultra-high net-worth individuals, because they are only going to come to you through a trusted source and usually that is a centre of influence.”

Looking down the road, Zakka wants to increase his celebrity clientele from 20% of his business to 30% or 40%. Although most of this part of his book is made up of clients in the film, TV and music industries, Zakka wants to expand into the professional athlete market. He is an avid hockey and basketball fan and, he says, these high-level athletes have similarities to his entertainment clientele.

“It’s a different market that I would love to get into,” Zakka says, adding that these ultra-high net-worth individuals, like those in the entertainment industry, have unpredictable career arcs that need to be managed.

Dealing with clients who can’t predict their incomes on a year-to-year basis, combined with a tendency to have large spending patterns, can also be challenging. Zakka uses a disciplined, conservative investment approach to ensure his clients can weather the economic storms.

“These clients have large lifestyles, and they can spend $100,000 a month to maintain that lifestyle,” Zakka says. “It’s important to keep them in line and make sure they are not spending assets too quickly.”

The majority of Zakka’s celebrity clients’ assets are placed in portfolios that have a large portion of fixed-income products, including convertible debentures, preferred shares, government bonds and investment-grade corporate bonds.

“We tend to keep the equities side to a minimum,” Zakka says, “because they are really looking at retaining their capital and preserving their net worth and wealth.”

Zakka finds some celebrity clients can be more emotional than the average client and he has to take the time to put their finances into a real-world perspective: “You have to take the emotion out for them, because this is not a dress rehearsal; they only get one shot in a real-life situation. We don’t want them to enjoy their lifestyle too quickly because you don’t know where their career will be 20 years from now.”

Zakka started his own career at Toronto-based Canadian Imperial Bank of Commerce, where he managed a private-banking branch in Toronto in 1991. It didn’t take long for Zakka’s passion for showbiz to resurface, and he joined the former Midland Walwyn Inc.’s rookie program in 1994.

In Zakka’s first year with Midland Walwyn, he surpassed the firm’s asset target of $5 million, bringing in $9 million in total new assets, which placed him at the top of his training class. After the firm’s sale to Merrill Lynch Canada Inc. in 1998, Zakka was appointed sales manager for seven branches in the Ontario region, responsible for managing more than 100 financial advisors. By the time Merrill Lynch Canada’s retail operations were sold to CIBC Wood Gundy in 2001, Zakka had become one of his firm’s top 40 advisors in Canada. In 2008, Zakka joined Toronto-based Blackmont Capital Inc., since renamed Macquarie Private Wealth.

Outside the office, Zakka has combined his entertainment networking with a cause that is close to his heart. After losing his mother to cancer in 2008, Zakka helps to raise funds for the Gilda Club of Greater Toronto, a not-for-profit organization that provides support for those living with cancer and their families. Named after comic actress Gilda Radner, who died of cancer in 1989, the organization holds an annual fundraising gala.

Called, It’s Always Something, it attracts stars such as Russell Peters, Martin Short and Eugene Levy. For the show held last November, Zakka was able to donate $22,000.

A good track record helps to build trust

When dealing with high-profile clients, building a strong relationship that is founded on trust can help maintain client relationships and drive referrals, says Roy Zakka, senior vice president and investment advisor with Macquarie Private Wealth Inc. in Toronto.

“Many of my clients have been with me over the past 19 years,” says Zakka, whose book of business includes many well-known members of the entertainment industry. “They have watched two firms buy us out and a major change at a third. But it’s the solid foundation of trust that I’ve built within those relationships that has made my clients stick by me.”

Zakka adds that he takes extra precautions with his celebrity clients to protect them from fraudulent investment deals.

“There have been a number of recent high-profile cases with unethical advisors, in both the U.S. and Canada, targeting entertainers,” Zakka says. “It’s unfortunate that they are targeted, so it’s important that we maintain a high level of trust.”

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