Mark Feigenbaum’s clientele: ‘20 years old and making $7 million a year’

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Having spent decades working with wealthy individuals in the sports and entertainment industries, Mark Feigenbaum has seen plenty of clients return to a former team, band or cast. In September, however, the proverbial shoe was on the other foot when the lawyer, accountant and advisor rejoined KPMG Canada as a partner after running his own practice, Feigenbaum Law, for more than two decades.

Today, Toronto-based Feigenbaum and his nine-member team are strengthening KPMG’s cross-border services while working closely with its family office team to provide tax planning and compliance as well as cross-border estate planning.

“One of the big benefits of working with KPMG is having access to a pool of very talented people that includes experts in everything,” says Feigenbaum, who previously worked in KPMG’s cross-border tax practice from 1997 to 2003.

“I pride myself on giving my clients as many options as possible as we navigate their complex tax, legal, wealth and estate-planning needs. You can’t solve a unique set of challenges with a cookie-cutter approach.”

While client confidentiality precluded the naming of famous names — “there are people you would know” is all he would say about his roster — Feigenbaum spent part of a recent afternoon with Canadian Family Offices talking about the nuances of cross-border tax and revenue, getting up to speed on fast-emerging sports, and the evolving challenges facing the boldface crowd.

How did you start working with wealthy individuals in sports and entertainment?

My goal growing up was always to be an accountant. Early in my career at KPMG, I worked on cross-border estate planning, which was unique at the time. The rules were very different in Canada than on the U.S. side, so it was pretty intricate and challenging.

Then I left to start my own business, and took on more high-net-worth people. I have a master’s degree in entertainment law, and I did my doctorate on cross-border tax for people in pro sports and entertainment, so moving in that direction was a natural fit.

Once you do that kind of work for one person, then the agents and business managers start talking, and pretty soon you have a whole roster of people. Since 2003, I have grown my business from 35 clients to a little over 3,000 when I rejoined KPMG.

What do you find appealing about working with athletes and entertainers?

I like unique challenges that are difficult, and I find the tax rules, language and inner workings of their industries interesting. They are people in the public eye, so you have to know how to talk to them and really understand their personal and professional goals. In the end, it’s a business, and not always as glamorous as people think.

What would be some examples of issues you typically handle?

The No. 1 thing is residency, which is a very important part of international tax. We work with a lot of people who are going to be residents in one area but play or perform in multiple places. There’s also compliance, and dealing with all the jurisdictions that they encounter.

I also do some work that involves dealing with how to allocate endorsement revenue. Imagine a tennis player who has a logo on their bag. How do you allocate income from the lump sum they get for displaying that logo, or from what they post on social media?

There are lots of unique little twists and turns in the sports and entertainment industries.

When you’re dealing with athletes and entertainers who are used to steering the ship, what kind of approach do you need to have?

You need to be patient, first and foremost. For many new clients, tax planning isn’t something they’ve thought about before. They’ve studied their craft their entire life, they work out or rehearse six hours a day, and then they get a friend to help them with their taxes. They don’t understand that their taxes are actually very complex, so often they can get bad advice at the beginning of their careers. I like to be the person who lets them get back to excelling where they really excel.

That’s why I really like being part of KPMG and its family office. We have advisors in all these different areas, from family law to philanthropy, so that when a unique situation arises we can handle it as effectively as possible from the very beginning.

What type of client best suits your approach?

I’m actually kind of picky about the clients I take on. I don’t really want ones who aren’t going to listen to advice, or who delegate everything to their parents or agents or business managers. I prefer to deal directly with the talent so they learn as they go. It’s important to understand that they’re doing their job, just like I’m doing my job, and that it’s a business for them.

Do you have any anecdotes about unique situations you helped clients negotiate?

I always say I’ve dealt with every sport, but then a new one comes along. I’ve had professional CrossFit athletes and e-sports players as clients, and all of a sudden I have to learn about sports I didn’t even know existed. I find this fascinating, and it’s never the same day twice, which is something I really enjoy.

What common themes have you noticed among your clients?

Very generally speaking, younger athletes and performers tend to lack awareness around the consequences of wealth. Imagine being 20 years old and making $7 million a year. Would you really understand what that means, compared to someone who spent their whole life growing a business and then one day sold it for $50 million? There’s a difference in how you approach that influx of wealth.

What approach do you take with these younger clients?

We take it one step at a time. We look at where they’re going to be living, and where they’re going to be playing or performing, then we go through endorsements and how we’re going to structure that.

With athletes, we sort out all the potential trade offers and the tax implications of each one. So maybe Team A is offering a big contract in California, but the tax rate is higher than in Florida, for example. And it’s not just about the tax rate for home games, it’s also about the rates of all the teams they play.

What are some cross-border challenges you see emerging for your clients?

The tax differential between the U.S. and Canada ebbs and flows, and tax rules change. That means you need to be continually on top of those tax changes, especially when you’re dealing with big dollar amounts.

How does a client’s fame impact your relationship with them? Do you ever get star-struck, or become a fan?

I think one of the things my clients like about me is that I focus on my role and don’t come at them like a fan.

Over the years I’ve had clients invite me to family events and to their homes for dinner, and it’s really rewarding when you do a good enough job that they include you in their circle of people. I use the term “trusted advisor” because even when I can’t help them, I steer them in the direction of someone who can.

Responses have been lightly edited for clarity and length.

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