Athletes and Money

Football-MoneyBy Rick Krollman

Athletes and money is an interesting mix. Talented athletes can go from making nothing to potentially hundreds of millions overnight. The millionaire athlete presents unique challenges for financial advisors. And for the athlete, there are key points to consider when putting together a financial team in order to assure a financial plan that is both aggressive and protective.

According to a 2009 Sports Illustrated article, 60% of former NBA players are broke within 5 years of retirement and 78% of former NFL players are bankrupt 2 years after retirement[1]. As an advisor, these statistics are startling and point to a need for professional athletes to have access to clear advice and education and access to reputable advisors. Below are five questions that athletes should ask themselves when choosing an advisor or any respected partner to help manage their assets and financial lives:

1.  Does your financial advisor have the proper licenses?

  • All financial advisors have to register with the Securities and Exchange Commission (SEC) before they can work with clients. Their website ( enables you to search individual brokers, firms and investment advisors. If you do not see your advisor’s name in this database that is a “red flag”.

2.  Who is your custodian? A custodial bank is the bank that holds and safeguards your assets. It provides a layer of protection. In my opinion, you want a bank that you know. Always ask “Where are my assets custodied and how are they protected?”

3.  Is there a financial plan? A financial plan is a “roadmap” that tells you where you are today and where you need to go. It is never a straight line. But it gives you the information you need regarding how much to spend per month and more importantly how much to save.

4.  How are my assets invested and where are they invested?

  • An athlete client is a combination of asset accumulation and asset protection. Many athletes are young enough that this pile of money may need to last 40+ years! If you are a rookie athlete making the minimum salary and only play through your rookie contract, odds are you will need to grow your assets and eventually you may need another job after you stop playing. Then there is the super star athlete that signs the huge contract at 28 and needs estate planning, asset protection, and tax management.

5.  How involved will you be?

  • Will you be involved in your personal finances or will you delegate it to someone you trust (i.e. parent, agent, friend)? An athlete has to minimize his distractions during the season. Any planning, contracts, endorsements should be done in the off season. So, build a team that you can trust. That team should include a financial advisor, attorney, agent, and accountant. Work with that team in the off season and demand accountability that they do their jobs during your season so you can focus on being the best you can in your sport.

[1] Sports Illustrated article, March 23, 2009, “How (and Why) Athletes Go Broke”

KrollmanRick Krollman is a Financial Advisor with Morgan Stanley Wealth Management in Fairfield, CT. The information contained in this interview is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.  Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.

Rick Krollman

Morgan Stanley Wealth Management

1229 Post Road| Fairfield, CT 06824 Phone: +1 203 319-5147 Fax: 203-319-5160

[email protected]

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