Q. What are some organizations that you speak at or work closely with?
There are a number of different organizations that we work closely with, including but not limited to:
Baseball Chapel www.baseballchapel.org
Q. At what point in their careers do professional athletes need a wealth management advisor?
There are several cycles in a professional athlete’s career, all of which require thoughtful advice, but generally we like to begin working with athletes from the beginning. For example, a very talented athlete might receive significant wealth at a young age without much life experience. A 19-year-old can’t be expected to know and understand that even in the first couple of years, he may make some of the most important decisions of his life that can have lasting consequences, sometimes detrimental financial consequences. And because of the typical length of the athlete’s peak earning years, it can be hard to recover from a financial misstep.
As an athlete moves through the various cycles of a professional career, the challenges, demands, and needs become more complex. During the first few years, a large part of the focus is on budgeting, cash flow management, and educating the athlete on how to make sound financial decisions and navigate new business relationships. After the first few years, contract sizes or earnings can increase significantly, bringing the need for more sophisticated investment management and tax planning. When an athlete marries and has a family, more asset protection and a more involved estate plan are needed. At some point, significant wealth requires a detailed wealth transfer plan and also can lead an athlete to want a more strategic charitable giving plan, which in turn increases demands on the player’s time and commitment level. And then there’s a career’s end and the need to create a plan of action for retraining and moving on to the next stage in their life, as well as pension and retirement plan management. At every point in the career cycle, we want to make sure we’re that trusted advisor, helping our athlete clients toward the goal: long-term financial independence.
Q. What are some of the unexpected challenges athletes face?
Athletes get bombarded from every direction with “can’t miss” investment opportunities, appeals from charities, requests for speaking engagements, offers for limited-involvement ventures – “Just let us put your name on our restaurant . . . Oh and, by the way, we need a big check from you for this special opportunity” – pitches from life insurance agents and, often most troubling to them, requests for financial help from friends and family. Many are simply overwhelmed by the requests and opportunities coming at them. We know that sudden wealth can bring new complexities to family dynamics, and to relationships with friends and early supporters, but the newly successful young athlete, in particular, may not be prepared for that.
While we understand their desire to help, we can take a lot of pressure off them by playing gatekeeper. It allows them to have an out by just saying, “You need to talk to my Ronald Blue Trust advisor.” Most athletes are relieved at not having to always say no and feeling like they’re letting people down, or that they’re saying yes to the wrong things. The same scenario often applies to an athlete’s spouse, putting him or her in an equally uncomfortable position, perhaps more so as the spouse’s interest is in protecting and supporting the athlete and the family. We want to take that pressure off both of them.
Q. What are some of the common misconceptions about the role you play?
First, it’s important to point out that we do not try to take on the role of an athlete’s agent – that’s a special role requiring special expertise, just like ours is. We certainly rely on the agent to negotiate contracts, bonuses, and endorsements and we work closely with the agent so that we can anticipate, prepare for, and manage the financial implications that come from those developments.
Second, we don’t control an athlete’s money, dictate how it’s spent, or prevent them from living as they wish. We do manage the entire wealth planning process, help them sort through financial questions, evaluate alternatives for them, illustrate through reports the potential impact of decisions, and support and help implement financial decisions. We also hold our clients accountable to the goals they’ve set for themselves. Because of the environment in which they operate – let’s call it the environment of locker room talk – one of the most important roles we can play is as a sounding board and an expectations manager. It’s very easy for athletes without a lot of life experience to get caught up in what teammates are doing, or what their always-widening circle of “friends” is recommending.
Q. What are some of the specialized services that you offer?
The reason we call it specialized services is because the service that we provide can vary depending on the client’s unique needs and circumstances. We essentially step in and help with whatever is needed like getting permission from a state regulatory agency to dig a water line under a train track, helping find a builder that is properly vetted and licensed and negotiating a fair price (not settling for the “athlete price”), assisting with making phone calls when credit cards are lost or stolen, and so much more. Foundation management is another one of those specialized services. It’s one thing to set up a foundation for charitable giving and quite another to help manage it. We can be a sounding board and provide advisement to the foundation as well as ensure that all the paperwork and tax filings are in compliance. When we first started, we didn’t think that one day we’d be arranging a big-name musical act for an athlete’s foundation event for 9,000 guests. The point is that we become part of the athlete’s extended family in many cases. We’ve gone on mission trips with some of our clients, we help them celebrate the big events in their lives, and we get their first call on so many things. Our main goal is to make sure our clients don’t get any financial surprises that may take their focus off being able to operate at peak performance.