Kella Stephenson, Financial Planner

Kella Stephenson, director of The Kella Stephenson Company, handles financial management for a number of Nashville songwriters, including Hillary Lindsey (“Jesus Take The Wheel”) and James Slater (“In My Daughter’s Eyes”).

What exactly do you do, Kella?

I do business management and financial planning for songwriters. That entails everything from paying their power bill to reviewing publishing deal points to investment and estate planning. Day-to-day type services include paying all client bills, banking, personal budgets, managing cash flow, quarterly tax estimates / projections, and providing quarterly financial statements. We also focus on personal financial planning, which entails investment, insurance, tax, and estate planning. We don’t sell products, so I will work with industry specific professionals – CPA for taxes, estate attorneys, licensed insurance agents, and other CFP designees for investment purposes. I will also help guide clients when making career decisions with respect to publishing deals, catalog sales, publishing administration deals, and again will work with their respective music attorney in those situations.

When does an artist need the services of someone like you?

Obviously, it has to make sense from a financial standpoint to hire a business manager, but when a songwriter’s efforts are better spent on doing what they do best — being creative and getting the financial worries off their plate — it is a good thing. I don’t have a specific net worth that a client should have before I will work with them, but they should either have a co-pub deal and have steady cuts and solid singles, or own their own publishing and have steady cuts and solid singles. Granted, one year may be better than another, but that is my job – to help smooth out the cash flow and help the artists make smart decisions when the big years happen.

In terms of financial management, how do the needs of a songwriter differ from that of major-caliber artist like, say, Alan Jackson?

Major recording artists like an Alan Jackson require a lot of the same needs in the personal financial planning realm, but day-to-day business management is more intense. For example, a recording/touring artist requires company payroll, corporate structuring, show settlements, merchandise settlements, tour budgets, multiple tax returns, commission payments, trade marking, endorsement deals, label re-bills, and label audits, just to name a few. However, there are overlaps — especially if the recording artist is a songwriter like Alan Jackson –for needs of comparing song earnings, striking publishing/admin deals, publisher audits, and determining the value of a catalog.

Who are some of the artists you represent?

Hillary Lindsey (“Jesus Take the Wheel,” “Blessed,” “Wasted,” “This One’s for the Girls,” “So Small,” “Just a Dream,” “Last Name”), James Slater (“In My Daughter’s Eyes,” High Cost of Livin,” “That’s Why God Made Mexico”), Luke Laird (“So Small,” “Last Name”), Dallas Davidson (“Honky Tonk Badonkadonk,” “Put a Girl in It,” “Start a Band,” “Barefoot and Crazy”), and Trey Fanjoy, who directed videos for George Strait, Taylor Swift and Keith Urban.

What is your professional background? And how did you get into the business of business management and financial planning for songwriters?

I graduated from Auburn University, with a degree in Finance, in 2001. I worked for Regions Financial Corp., in Birmingham, Alabama, and then went back to Auburn for graduate school. I finished my M.B.A. and moved to Fort Payne, Alabama, where I worked for Jeff Cook, doing day-to-day business management while the group Alabama was on their farewell tour.

I then moved to Nashville and worked at Flood, Bumstead, McCready and McCarthy, a world-renowned full-service business management firm. The personal financial planning process was intriguing to me and I just saw a niche for songwriters that needed day-to-day help, along with holistic financial planning. I attended Belmont University at night to receive the Executive Certificate in Financial Planning, and then received my Certified Financial Planner CFP designation after sitting for the national exam.

Did you always know you wanted to work in the music business?

Absolutely. I just didn’t know quite how, or in what form. My cousin, singer/songwriter Joanna Smith, and I would dress up as the Judds when we were younger. I would make her be Naomi because I didn’t want to have to wear the Padgett dress. She got mad one time and wouldn’t come out on our make shift stage, because she wanted to sing lead. I finally realized I was not a singer, and that she most definitely was the entertainer in the family. I just love good music and grew up on George Strait, the Judds, Alabama, Barbara Mandrell, Dolly Parton and Kenny Rogers. I think I still have most of the CMA awards on VHS from the 1980s and early ’90s. We had to be at church on Wednesday night but would come home and watch. That was our entertainment for the whole year. We had them memorized.

Have you found that most artists are clueless as to finance-related issues for music?

Actually, I believe most artists know exactly what they want when it comes to their finances; it is just helping them get there and managing expectations. My clients are in the driver seat of their careers. I am just a team player who strives to help them fulfill all their goals.

What advice would you give to professional songwriters, as far money management goes?

I could probably write a book on that question and maybe one day I will. There are many factors and different levels of success that contribute to one’s approach of money management. Simply, if a songwriter has a publishing deal, I would encourage them to try forming a lifestyle around their monthly draw, and set aside money for taxes. If they could live comfortably on their monthly draw and stay current with the IRS, then when they have a single or some big cuts, they can pay off debt and begin to invest wisely. I would also encourage them to set aside — in a liquid money market or savings account — at least one year of what we refer to as an “emergency fund.”  This would be an amount equal to what it would cost them to live for one year. It takes at least six months to one year for performance money to come in, and longer for mechanical, synch, print, digital, ringtone, etc., on cuts and singles. I would also recommend working with a CFP designated professional for investments, as they understand the entire financial planning process.