A Wealth Management Playbook For Elite Athletes

Experts From Realta, Perigon And Sanctuary Explain Unique Issues Facing Professional Athletes And How Advisors Can Support Them  
Michael Madden, Contributing Editor & Research Analyst, Wealth Solutions Report
Michael Madden, Contributing Editor & Research Analyst, Wealth Solutions Report

Professional athletes who spend their lives laser-focused on the pursuit of excellence in their chosen sport often don’t consider life post-competition, though the average career is extremely short. A review of various data on player longevity across the NFL, NBA, NHL and MLB shows that a 10-year career is exceedingly rare, with an average tenure between 3.5 years and six years, depending on the sport and the data source.

The transition away from being an active player can be challenging personally, professionally and financially. The typical elite athlete first sees a huge influx of money between the ages of 18 and 22. And with amateur athletes now earning NIL money from the use of their “name, image and likeness,” there’s more money in play at younger ages than ever before.

When it comes to financial matters, these athletes – so accustomed to excelling – are often out of their league.

For many, it’s the first time they’ve had substantial levels of discretionary income at their disposal. Being unprepared to handle such newfound riches is dangerous enough. The brief period in which they’ll be earning such income contributes to the urgency of sound wealth and legacy planning from the moment they attain wealth. While most individuals plan on a retirement that could last for 30 years, athletes often retire from their sport before the age of 30.

That’s why athletes must include an experienced wealth manager/financial planner among their inner circle of trusted advisors. It’s a niche market, and the tools required to support the unique needs of these young and wealthy individuals must be sophisticated, customizable and broad, encompassing budgeting, income planning, wealth management, business planning, banking solutions, family governance, philanthropy and more.

How do financial advisors and their firms meet the unique challenges of supporting this small but lucrative client base? We sought the insights of three industry executives with experience in this area to help us delve deeper into meeting the needs of this niche market:

We asked this question: Meeting the wealth management needs of professional athletes presents unique challenges. What solutions (technology/training) does your firm use to support this niche market and the advisors serving it?

Their answers follow.

Kevin Keefe, CEO, Realta Wealth

Kevin M. Keefe, CEO, Realta Wealth
Kevin M. Keefe, CEO, Realta Wealth

Realta Wealth understands the unique wealth management challenges of professional athletes. Many of them hit peak income in their 20s and early 30s, which is why their families need to have a proper financial foundation. Realta offers its affiliated advisors a comprehensive set of capabilities to help professional athletes and other ultra-high and high net worth clients.

We provide industry-leading capabilities to address complex tax, investment management, estate planning, philanthropic and even personal/information security challenges through a robust suite of services, including CFO solutions, trust coordination, family governance planning, a wide range of alternative investments, accounting and personal concierge services.

Realta Wealth is committed to providing our affiliated advisors with differentiated and bespoke solutions to enable them to best serve and support this important and growing demographic. We understand that for many athletes, throughout their playing days as well as when they transition to a post-professional career, diligent financial planning and governance solutions are critical to preserve their wealth and legacy.

Marc Specht, Partner And Head Of Sports & Entertainment, Perigon Wealth Management

Marc Specht, Partner and Head of Sports & Entertainment, Perigon Wealth Management
Marc Specht, Partner and Head of Sports & Entertainment, Perigon Wealth Management

Professional athletes have unique wealth management needs because they have two distinct financial planning cycles. The first is marked by high earning potential at a young age, and the second requires focusing on wealth preservation and legacy.

As we continue to work with this group, our team has come to understand their needs and has developed a specialized financial planning approach to help athletes build on their current success and ensure a stable future. Key to this long-term process is recognizing the impact of their cash flow, investment decisions and future healthcare needs today. We want our athlete clients to live their lives during and after their playing careers in a way that addresses their needs, desires and charitable endeavors.

This takes a particular set of solutions, and we’ve found it is better achieved through a clearly communicated, collaborative approach that incorporates other professionals in our clients’ circle (i.e., agent, accountant, attorney, etc.) This goes beyond technologies or solutions and comes back to a dedication to personalized service, which is at the core of our practice.

James Corrigan, Managing Partner, Burnham Harbor Private Wealth, A Sanctuary Wealth Partner Firm

James Corrigan, Managing Partner, Burnham Harbor Private Wealth, a Sanctuary Wealth partner firm
James Corrigan, Managing Partner, Burnham Harbor Private Wealth, a Sanctuary Wealth partner firm

Serving professional athletes’ wealth management needs requires tailored financial planning, given their typically short career spans. This planning includes managing fluctuating income streams, optimizing tax strategies and creating investment portfolios that balance risk and reward. Athletes need robust risk management, including disability insurance and asset protection, to safeguard their wealth.

Financial literacy and education are crucial in helping athletes and their families make informed decisions. Effective team coordination is essential, involving seamless collaboration between financial advisors, agents, lawyers and tax professionals to provide comprehensive services.

Over the past decade, the approach to serving athletes has evolved significantly. Specialized wealth management firms now offer holistic services, focusing on post-career planning and sustainable investments. Regulatory changes have brought stricter oversight and greater transparency, protecting athletes from fraud and mismanagement. Social media and cultural shifts have also opened new revenue streams while requiring careful brand management. These developments ensure that athletes are better prepared for financial stability during and after their sports careers.

Michael Madden, Contributing Editor and Research Analyst at Wealth Solutions Report, can be reached at mmadden@wealthsolutionsreport.com.

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