Calling all advisors: NFL professional athletes need you—and the players association is holding “tryouts,” of a sort.
The National Football League Players Association (NFLPA) is the only professional sports union working to hook players up with financial planners, estate-planning lawyers, accountants and the like.
The union’s goal is to create a roster of advisors who can help the athletes manage and preserve their wealth.
The NFLPA first set up a “financial advisors program” in 2002. It now lists 425 advisors of all stripes. While the lineup is still heavy on financial advisors, increasingly estate-planning lawyers and accountants are joining—and being encouraged to do so.
Explains Dana Hammonds, NFLPA director of Financial Programs and Advisor Administration: “When the NFLPA talks to players about financial planning, we tell them to put together a team, including attorneys, accountants and financial advisors, to make sure their future wishes are carried out.”
The union screens advisors to ensure they have an advanced degree (M.B.A., J.D. etc.), at least five years of relevant work experience, appropriate licensing and a clean record with appropriate regulatory bodies, like the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
Certainly, NFLers’ need for wealth preservation advice is great. The pros earn a minimum of $300,000. Their median salary in 2007 was $770,000 and the average salary was $1.5 million.
That’s a lot for men in their 20s and 30s to suddenly be earning—always with the prospect that they won’t be making that kind of money for very long.
The average career in the NFL is 3.8 years, and the NFL does not have guaranteed contracts, notes Andrew Bondarowicz, president of the management firm Aregatta Inc. in Westfield, N.J.
Professional athletes’ planning problems are also unique because the men's sudden fame and publicly known earning potential makes them walking targets. Plus, they’ve generally spent most of their young lives learning how to play ball, not how to diversify portfolios, calculate tax advantages or consider the benefits of various types of trusts.
Indeed, pro athletes probably get taken for a ride more often than anyone knows, because they tend to keep quiet about such problems, says Michael Boone, of M.W. Boone and Associates, in Bellevue, Wash., who helped design the criteria for the NFLPA’s advisor program. “I had a player come to me who was completely cleaned out by a previous advisor. He had nothing left. But there was no lawsuit,” Boone notes. “These guys don’t want their dirty laundry out there, let alone letting people know the details of their financial problems.”
The private nature of personal finances also makes the success of the advisors’ program difficult to quantify. It’s “designed to be confidential,” NFLPA director Hammonds says.
Still, there are some indications that the NFLers are using the list of advisors, which they access on a gated portio of the NFLPA’s website. While the players union is restricted from asking the players who handles their finances, reports from the advisors lead the union to believe that about 50 percent of current NFL athletes are using the program, Hammond says.
That means there are a lot of potential clients out there with a significant amount of money. Each NFL team has 53 players on its roster. With 32 teams in 2008, that’s a total of 1,696 players.
And it’s not just the athletes themselves that may use the program or need advice.
If you plan on advising pro athletes, as Lawrence K. Bogar, a wealth preservation advisor at Oppenheimer & Co. Inc. in New York does, know that you are not just dealing with an individual, but also likely his entire and perhaps rather extended family. Pro athlete’s wives, in particular, warns Bogar, are “particularly involved in their husband’s estate planning.”
Advisors interested in being considered for the NFLPA’s roster, should go to flpa.com to see a complete listing of requirements.