You might hope it's glamorous. "I can pick up the newspaper every day and read about a client," says Doug Ammerman, national partner in charge of financial planning for Big Six CPA firm KPMG Peat Marwick LLP. "A lot of people are attracted to this aspect of representation because it is exciting."

Yet many professionals engaged in planning for rock stars avoid becoming part of the celebrity's entourage. One Texas planner who helps a rock star invest says, "I go to the concert when my client performs in town, but I don't hang around with the band afterward." And for good reason. The rock 'n' roll world is rife with sex, drugs, and tales too lurid to recount here.

But let's get back to the concert. As guitars and amps crank up and vocals blend in harmony, thoughts of musician clients fill your head, and planning for rock stars seems doable. And to a degree, it is.

Denver accountant Suzanne Bradeen had no music clients until the attorney for Colorado's most successful modern-rock band, Big Head Todd & the Monsters (the group had a platinum-selling CD in 1993, thanks to the radio hits "Bittersweet" and "Broken Hearted Savior"), passed her name along to the band. The attorney has since sent other musicians to Bradeen for tax help, and word-of-mouth in the tight local music community has also added names to her client roster. "But I wouldn't want to put my whole practice in it," says Bradeen. "There aren't enough musicians here making money, although that doesn't mean you couldn't handle musicians from another state. I've talked to Nashville CPAs, and that's all they do."

In Southern California, breaking into planning for rock stars is much more difficult, although easier than getting into the athlete market, say those in the know. Business managers—they may be attorneys, accountants, or agents—control California stars' financial lives, and they're highly selective about whom they bring aboard the financial planning team.

Shift back to the concert. The band rocks. The crowd screams. And in the enthusiasm of performance, your star client reaches into the audience to shake and slap fans' hands. Heavy-metal singer Ronnie James Dio (ex-Blackmore's Rainbow; ex-Black Sabbath) did that at a concert in Denver recently, and someone in the crowd took a knife and sliced the singer's hand. Dio recoiled, bloody. Okay, Mr. Planner-to-the-Stars, did you have the proper business insurance in place?

"When musicians tour, we try to get package policies that will cover everything—trucks, props, their instrumentation, even such things as their arrangements," says Mitchell Freedman, a Los Angeles business manager who heads an accounting firm that bears his name. Rock stars' other unique insurance needs include workers' comp for stage hands and techs, pyrotechnic insurance, and nonappearance insurance, which protects the artists from damages if they can't show for a gig due to illness or foul weather.

"You can get package policies that will cover substantially all of this," says Freedman, a CPA and financial planner who has clients in film, television, and theater in addition to music. "The entire policy is negotiated, and it's very important to deal with an insurance broker who is knowledgeable about the music field and who has a broad number of markets to go to. A broker who knows how to negotiate premiums and deductibles and who can make sure there are no gaps in coverage is a very valuable team member." (Try explaining the concept of "gaps in coverage" to a client who has been slit by a fanatic.)

High-profile musicians may also require kidnap and ransom insurance. Huge amounts of coverage—say, $50 million—is available cost-effectively, even for very well-known people, and these policies cover the celebrity and his or her household. "There are crazies out there who get the kid coming home from school," says Freedman. "And when the events occur where the kidnap or ransom coverage is called upon, the companies that provide this kind of insurance have experts who can help in the negotiation process to make sure there's a safe release of the kidnapped person." (This risk plagues not just rock stars, Freedman notes, but also CEOs visiting foreign operations. "There's big business in hijacking executives in South America, Europe, and some of the Middle Eastern countries," Freedman says. "It happens more frequently than a lot of us know about, and people are covered more frequently, too.")

As the concert climaxes and thousands stand to cheer the artist's biggest hit, you wonder whether the star has cash in the bank or is in debt to his earrings.

"Our clients tend to be depositors rather than borrowers," says Freedman. "That gives us a very substantial negotiating clout when a client needs money to get through some bad times or to finance a tour or a major acquisition. In some cases I've gone to the bank and said, 'Look, this is a very important client. On the surface it doesn't look good, but take this risk. You need to.' I don't do it in a threatening way. I tell the bank every single risk they're going to undertake on a particular credit, and they may take a gamble, but they know there's nothing hidden."

At the start of their careers, most musicians earn very little, presenting advisors with a major budgeting problem. Would-be stars may have some low-paying day job—as a messenger, as a waiter—but being a musician requires money for new instruments as well as time in the studio to cut demo recordings. Don't forget the cost of traveling to gigs in smokey bars, which may pay literally nada.

Budgeting issues remain even after the musician tastes success. "Entertain-ers have to look beautiful," says Los Angeles planner Percy Bolton, who works with jazz, contemporary, and pop musicians. "They'll pay $150 a week to get their hair done, their nails done. When they show up at an event, they have to look a certain way. If you're a star, you can't drive up in a Camry—you've got to drive a BMW. You've got to make an impression." Image consciousness even carries over to visits to the planner's office, Bolton says, especially with star female clients. "They always look different; they have a lot of clothes."

Compounding the budgeting problem is the fact that future income is very uncertain. "When we signed [a recording contract] with CBS," says bass player Reggie Scanlan of The Radiators, "we started making more money and it came from more sources, but you can't assume that it's going to keep increasing. Anything can happen. Somebody in the band could die, or the band could break up, or CBS could drop you."

The planner's challenge, therefore, is to replace the musician's potentially short-lived career with something more permanent. Bolton accomplishes that by helping his clients transform themselves from musicians to business people. "We look for opportunities for our clients to use their talents in other ways," he says. "They can make money producing shows for people. They can make money producing other musicians' albums. We have one client who can do all that, has made a very good living at it for quite some time.

He's a great musician, but he doesn't make much of his money from performing. By having 10 or 15 artists that he produces, he's got a greater chance of making money than as an artist on his own."

Given entertainers' volatile incomes, those who work with rock stars recommend ultra-conservative investments—Treasury securities, money market funds, perhaps buying a condo for cash—at first. Then, after the celebrity has established a solid asset base with little debt, investments can become more aggressive.

The Financial Life of a Rock Star Like many musicians, Styx guitarist James "JY" Young started in the poor house. But when Styx hit the big time in the late ’70s with hits like "Come Sail Away," he became a millionaire. Now 47, Young says he and his bandmates didn’t overspend when they started getting big paychecks. "The guys in Styx, we come from a working class background on the South Side of Chicago, so we’re all pretty conservative. We didn’t move to California, where real estate is double in price what it is in the Chicago area. And we were all married at the time, so we weren’t out blowing money trying to impress everyone at the Ford Modeling Agency." The musicians in Styx earned most of their money from record sales. From 1977 to 1981, the group set a record with four consecutive albums that sold over 3 million copies (triple-platinum) each. Touring was less of a moneymaker because Styx would perform just four shows a week instead of the usual five or six. Young’s best year financially was 1979, when he happily took advantage of income averaging. Young is well versed in horror stories about other musicians’ financial woes, sometimes caused by an unscrupulous manager who raided the cookie jar. But Young, who has a degree in mechanical and aerospace engineering from Illinois Institute of Technology, has good words for the business manager Styx used during their heyday. "The best thing that our advisors did was set up a pension plan for the band and fund it to the max. And that money has just grown and grown and grown." Styx disappeared from the musical landscape for about a dozen years, re-emerging last year with a 70-date tour of the U.S. This year, the group’s touring again, and they’ve released a new CD and a video, giving their income a major boost. "All of a sudden, we’re back in the highest tax bracket again," says Young, adding that he wished income averaging were still available. —E.L.R.

Bolton likes his clients to buy, mortgage-free, an apartment building or other income-producing property, since a musician may have few employable skills to fall back on. "You have to retire entertainers quickly because they can't do anything else," Bolton says. "You can't see Gladys Knight working as a secretary." (For athlete clients, Bolton thinks buying a franchise is a good move. "Athletes take orders well, so they can easily follow a business plan that's already been laid out.")

Of course, none of this matters unless you can get the star to put money away in the first place, and that's not always easy. Many musicians lack higher education and frequently come from lower socioeconomic groups, making it difficult to convince them to delay gratification when that first big check arrives. Moreover, egocentric young rock stars expect continued success, just as superstar high school and college athletes expect to sign pro contracts and enjoy long careers. How do you tell a client that his latest hit could be his last, and that he should set aside savings while he can?

Bradeen, the Denver accountant, explains, "I don't say, 'The public's going to hate you.' I put it like, 'You know, you might not want to be a rock 'n' roll musician when you're 50, or you might get tired of the touring and the lifestyle.'" Bradeen also reminds her clients of high-profile stars who were fabulously wealthy but then blew all their cash. "So I tell them, 'Let's just put your money away. You can spend some, but just don't go crazy.'"

Rock stars themselves say sudden fortune isn't easy to handle. "It's a tremendous challenge," says guitarist James "JY" Young of the hugely successful rock group Styx. "It's a new career unto itself to go, as I did, from a negative net worth to basically being a millionaire. It's one thing to think, 'Gee, what would I do if I had all that money?' It's another to say, 'I've got family members who are not in great health and now I have the means to take care of them.' It's a huge responsibility."

The concert is over. As you mill around the venue before heading backstage, you watch fans snatch up $25 T-shirts and other pricey memorabilia. Money changes hands quickly at the merchandise table—significant tax issues clearly abound. One that's frequently ignored is state and city income taxes, and many jurisdictions now aggressively pursue entertainment and athletic income sourced to their locales.

"If you don't file," says Ammerman, the Peat Marwick planning partner, "the statute of limitations never expires. Then not only are you subject to the income tax, but you're subject to significant interest and penalties that could have been totally avoided. A lot of people at the wrong end of their careers are getting notices from states and cities saying that they owe excessive amounts of back taxes and penalties."

Situations like this can even lead to double taxation. Say a California rocker performs in New York, then fails to file a nonresident income tax return with the Empire State. Albany might not nab the entertainer for failure to file until after California's statute of limitations for the credit for taxes paid to another state has expired. "So the client pays the New York tax," Ammerman says, "but it's too late to get the corresponding credit on the California return."

At the federal level, a key issue is estimated taxes. The income of even a successful musician can fluctuate dramatically from year to year, depending, for example, on whether he's touring or not. Obviously you want the client to pay enough estimated tax so that no penalty is incurred. "But I don't want the client to be way overpaid, either," says Bradeen. "If they pay 100% of last year's tax as estimated tax for this year and then they end up overpaid by $40,000, they're really upset. They're like, 'Why did I give the government all that money?' They really want you to be close."

Another estimated tax problem: What do you do for the first quarter's estimated tax payment when the client expects to earn nothing until September, when a major fall tour begins? "It's easier for the client to pay estimated taxes evenly during the year," Bradeen says. "I don't always do that, but it's hard to go to someone and say, 'Write a check now on January 15 for $50,000.'"

It's time to meet the musicians. Flashing your backstage pass, you descend to the dressing room and join the entourage. And for the conservative planner, the backstage area could be dangerous water. For openers, figure on being offered some sort of contraband. (It's okay to refuse; just say no politely.)

Seeking a safe harbor, you sidle up to the middle-aged band member you're wooing as a potential client. The relationship seems good so far—you've been to his home, met the family, maybe even had some preliminary conversations about estate planning with Mr. and Mrs. Musician. But now, all of a sudden, a sweet young thing, dressed déclassé, bursts backstage shouting, "John! Good to see you again!" and throws herself into the musician's open arms. The reaction of the man you want as a client? He winks and tells you, "This is my daughter. It's okay to hug her like this." It's very clear that she's not—but what if she were?

It's not uncommon for rock stars to start one family, divorce, then remarry a much younger woman, only to father another set of heirs. "You may have the new wife outliving the adult child from the first marriage," says Peat Marwick's Ammerman. "Setting up a Q-TIP trust doesn't do any good if you have the likelihood that the adult child will not outlive the new spouse. We try to do things with gifting during the lifetime to ultimately equalize the estate and to do it in a tax-efficient manner."

A rock star's retirement needs can vary greatly depending on the nature of his or her career. For example, The Radiators, bassist Scanlan's group, are a popular touring band that regularly fills America's largest clubs. But they've had no major radio hits, keeping record sales—and royalties—modest. So Scan-lan, 45, earns most of his money from performing. Once The Rads stop gigging, the money will run out.

Things are very different for Blue Oyster Cult lead guitarist Donald (Buck Dharma) Roeser. He wrote the Cult's biggest hits—"Don't Fear The Reaper" (1976), "Godzilla" (1977), and "Burnin' for You" (1981)—all of which still garner radio play. Plus, BOC's old albums still sell tens of thousands of copies each year. In short, the guitarist/composer enjoys significant royalty income. "Fortunately, the way a lot of my income is structured," says Roeser, 49, "it will continue to be paid out whether I perform or not, even though the numbers probably won't be what they've been." Roeser's career has yielded him an annuity of sorts.

The dressing room has been cleared of all but the band's inner circle, who are invited to the hotel. There, the partying intensifies. Obviously, confidentiality is a major issue when working with rock stars, and the problem of keeping files private expands with staff size. Freedman says, "We get calls all the time from the media and the tabloids. So when people come to work here, I tell them that if it ever gets back to me that they've discussed with anybody, even a spouse or significant other, anything about a client's personal or business life, their employment will be immediately terminated."

Ammerman admits that a practice full of rock stars can offer excitement. "Sure, it's interesting," he says, "but I don't like to hang out with clients for a couple of reasons. One, I have a family, and working 10 to 12 hours a day and then hanging out at venues until 2 in the morning doesn't work for me. Plus, I'm a triathlete, so I don't smoke or drink. Just in terms of my lifestyle, most clients are very conservative around me, and that's probably in part why they're using me.

"I also just like to keep things at arm's length," he says. "I think it's dangerous when you're a fan of your client. Stars are real cognizant of people who treat them more as fans and less as a person. I try to keep the relationship pretty normal."