With his firm’s two-year anniversary coming up in July, Bruce K. Lee, head advisor and founder of Keebeck Wealth Management in Chicago, is celebrating the addition of a Columbus, Ohio branch and two new advisors focused on professional athletes.
Dynasty Wealth Management, which helped Lee go independent in 2018, said Tuesday that Steve Vujevich and Matthew P. Anderson, who managed $400 million, left Merrill Lynch to join Keebeck’s firm as managing directors.
The move seems to be part of a trend for advisors focused on the unique needs of pro athletes; Last week, Dynasty helped a sports-and-entertainment-focused advisor, Matt Kilgroe, who managed $1.2 billion at UBS, launch an RIA named Cyndeo Wealth Partners.
Shirl Penney, president and CEO of Dynasty Financial Partners, said in an email that the RIA aggregator has five firms so far with a heavy focus on athletes.
“Advisors realize, in the RIA channel versus other channels in the industry, they can deliver with more flexibility and services the family office-type service model that many athletes and entertainers want and need given their hectic schedules,” Penney said.
Advisors have been trending towards independence for years now. The number of wirehouse advisors leaving the channel is growing, and net gains in the channel are low.
What inspires advisors to go independent, of course, are the needs of their high-net-worth and ultra-high-net-worth clients – and the needs of pro athletes are changing; while many were once content to build sustainable, long-term portfolios based on a relatively short period of high-income, more athletes are diversifying revenue streams and fielding opportunities to invest in other businesses.
Kilgroe said one of the reason he left UBS was that his clients needed real advice around topics that weren’t under his mandate at UBS, and he didn’t want to leave that business on the table.
His athlete clients ask him to review endorsement offerings and business proposals which come to athletes because of their name recognition and popularity. Some can be more opportunistic than realistic on the part of the those making the offer; not all are financially sound.
Those requests can put wirehouse advisors in a tricky spot. “Do they let the client figure it out on his [or her] own and potentially make a bad decision, or color outside the lines and loosely advise on that business, running the risk of violating compliance rules?” says Louis Diamond, executive vice president and senior consultant of advisor recruiting firm Diamond Consulting.
These types of clients are more inclined to want family-office services, as well. From tax, financial and estate planning to accounting and investment oversight. Many want to accommodate family and friends in their financial plans.
Beyond the actual services that this client segment requires, they also like a sense of exclusivity. RIAs, with their ability to detach themselves from a larger firm’s name and choose their own clients, can give them that.
“it’s a combination of marketing the freedom, marketing the independence, marketing the ability to say ‘I’m a boutique firm’ or ‘I’m an independent firm that resonates with the mentality of athletes and entertainers,” said Noel LaMontagne, director for Verdence Capital Advisor’s pro-athlete and entertainment division, Verdence/PRO, who is also a former NFL player.
“It makes them feel like they are being catered to, more like the focal point. And that makes the relationship development process that much easier,” he said.