Private banking centers race to sign celebrities, pro athletes

Private banking centers race to sign celebrities, pro athletes. November. 19, 2011 03:27. teller@donga.com.

The head of the private banking center at a large securities company that serves clients with hundreds of thousands of dollars in assets has recently attracted several singers and entertainers to his fold.

He did so thanks to his relationships with them formed through his appearance on an entertainment show as an economic adviser.

Each of them invested 50 million to 100 million won (44,000 to 88,000 U.S. dollars), which does not befit their celebrity status. He said, however, “As seen in the public offering jackpot hit by YG Entertainment, the domestic entertainment industry is growing at a rapid pace on the back of the popularity of Korean pop culture," adding, “I manage them by focusing on their potential instead of the money they invest now.”

Popular entertainers and sport stars are emerging as big customers for brokerages’ private banking centers. With the number of rich entertainers rising due to the popularity of Korean pop culture as well as that of athletes earning rich salaries, securities companies are racing to attract rich celebrities.

○ Big players for private banking centers

Though celebrities earn huge incomes, they have had little connection to securities companies because of their focus on real estate and reliance on acquaintances for equity investment advice.

The situation has been changed, however, as domestic brokerages, which shifted to asset management from securities, and celebrities pursue a more systematic management of their assets.

Song Seok-joon, head of the private banking marketing department at Daewoo Securities, said, “Many entertainers and pro athletes are emerging as big investors,” adding, “To attract them, we have to expand our marketing sphere.”

Celebrity demand for asset management via securities companies has also grown. Since their cash flow is inconsistent and jobs are not secure, their biggest interest is preparation for their later years. This has led many of them to invest in real estate for profits and start businesses.

To meet such needs of celebrities, the private banking centers provide consulting not only on asset management but also on tax and legal matters by utilizing their resources.

A source at a securities company`s private banking center that manages the assets of a singer hailed as a national star said, “We are like the singer`s butler.”

○ Race to attract star entertainers and athletes

A sales executive at a securities company who specializes in attracting VIP customers recently held briefing sessions for pro baseball and basketball teams. Though the sessions are for all team members and staff, the executive targets star players who have become household names.

"Quite a few star players have failed in making investments due to lack of network and information," the executive said. "If I give explanations about the market situation and present customized investment strategies and packages, they show high interest.”

Utilizing the relationships with entertainers who have worked in ads and for sponsor programs of a given company is a must in attracting celebrities. Participation in meetings of pro athletes and fan club activities is also necessary.

Daewoo Securities recently said its spokesmodel Park Hae-il, a movie actor, became a customer of its private banking center in openly expressing Daewoo`s commitment to attracting star entertainers and athletes.

Yoo Jeong-seop, a director at IBK Investment Securities, said, “Specialized PB services targeting celebrities are booming in advanced economies, whose entertainment and sports industries have been developed."