Advisors that make you a winner

Key topic

In this module, we stress the importance of creating a team of advisors who will support and guide the athlete both in their sport and financial lives.  There are important lessons to be learned from a number of athletes who have financially failed.  A common denominator often, is the trust athletes have placed in the wrong professionals. In addition, we stress that the chosen advisors need to understand female sports and their surrounding landscape, so that they can properly guide their female athlete clients.

Learning objectives

• Creating the right team of trusted, reputable and established professionals is important to the athlete’s success.
• Your advisors just serve the purpose of informing you about your available options, but the financial decisions are ultimately your own. So, treat them as such!
• The right agent will do their best to create the right opportunities for their athlete client, so choosing a good agent is critical to the success of your sports career.
• Each athletic career is a small business, and a good manager runs the business efficiently and sees that everything off the field goes smoothly.
• Attorneys come with different types of expertise, and they can protect athletes in a number of ways.
• Successful athletes around the world have had mentors who helped them spread their wings and unleash their potential.
• Athletes move around a lot, both nationally and internationally, therefore they need to have advisors with international expertise.
• Athletes need to know how to protect themselves from being victimized by financial mismanagement and investment fraud.

Introduction

During different stages of your life, you will have to interact with many professionals who will help you with your athletic, financial and business endeavors.  Creating the right team of trustworthy, reputable, and established professionals within any given field is important to your success.  Once you have the proper team in place, your advisors will support your efforts in ways you can’t accomplish alone.

We consider it important to raise your awareness as to the type and caliber of advisors you need in your support team. We want you to be aware that being surrounded by the right people will take you places and will make you a winner, not just in your sport, but in life as well! Today’s lesson will be a much more interactive one because it literally has to do with you making the right choices.

Let’s start today’s lesson with a video on how Peggy Fulford, who claimed to be a financial advisor, defrauded her athlete clients.

When hiring a financial advisor goes wrong

The complementary relationship between financial literacy and the athlete’s advisors

Athletes, particularly the most successful and famous ones, have an army of advisors behind them, regulating their every move and advising them on various aspects of their lives ranging from investments to public conduct. Nonetheless, a certain degree of financial literacy is still vital, irrespective of how many advisors an athlete has, or who those advisors are. At the end of the day, nobody cares as much about your future as you so, and you should never delegate the handling of your interests entirely to your advisors. Hence, the relationship between financial literacy and your team of advisors should always be seen as complementary and not as substitutive or mutually exclusive.

The accessibility to proper and all-encompassing advice of course depends on the athlete’s financial and public stature. Put simply, a WNBA player will have access to prestigious advisors as opposed to a basketball player of a European country’s second division due to their financial resources and geographical location.  However, no matter the caliber of your advisors or how many of them you have, basic financial knowledge is vital.

There are several reasons as to why.  We reiterate that nobody cares about your financial well-being and future more than yourself. Financial advisors may harm your wealth either on purpose or by accident. We have heard of several cases where financial advisors really cost their clients hundreds of thousands and even millions by investing recklessly; a lot of advisors work on commission and so may profit by the investment itself rather than the return to you. According to a 2021 report by Ernst & Young (EY), from 2004 through 2019, professional athletes alleged almost $600 million in fraud-related losses—a figure which is worrisome.

Moreover, due to the lucrativeness of the sports industry, a lot of incompetent individuals have, and are trying to penetrate the market which can cause real financial damage to anyone who trusts them in the short run. The reasons are endless, but the conclusion is that to avoid all these, the athlete must be able to audit and question the advisor’s proposals and recommendations instead of just blindly following them. Given sufficient effort, the athlete may also be able to offer their input and even their own recommendations in financial affairs.

On the other hand, we should not overlook the beneficial effects of professional advisors provided that the athlete is financially educated. Even if the athlete manages to become a financial and legal expert, which is highly unlikely, given that these skills orbit around financial and legal expertise along with experience which takes years to attain, advisors can provide other benefits as well.

You can think of financial literacy as a system of checks and balances which aims at limiting your advisor’s authority over you. When you make sure that you authorize but not delegate entirely and when you do not allow advisors to exercise a monopoly over your information then they can be your greatest ally in your pursuit for financial security both in the short-run and in the long-run. In other words, it will go a long way in ensuring your financial future when you view the relationship between your financial knowledge and your advisors as complementary.

Advisors you can trust

Selecting the most suitable advisors is not an easy task.  It is very important to interview advisors before choosing to work with them and it is also very important to choose people who not only have the relevant experience, but whom you like on a personal level.  You may spend long hours with this advisor at meetings, events, or during travel, so it’s essential to work with someone you trust and enjoy collaborating with. These relationships will be long-term, so you want to work with people you enjoy being around.  If your financial planner, realtor, lawyer, or tax professional is a trusted advisor, and you know they have been successfully managing and investing money for years, that person may be an excellent resource.  You should not rely solely on family members or friends to guide your financial decisions; you can involve family and friends in the process but mainly as a second set of eyes and ears.

In recent years, the demand for specialized legal and financial advisory services in the sports industry has grown significantly, attracting many professionals looking to penetrate this niche market. While some may succeed in securing clients in the short term, many quickly realize how complex, specialized, and multifaceted the world of sports finance and management truly is. Increased regulation, stricter licensing requirements, and the rise of athlete-focused advisory firms have made it more difficult for unqualified advisors to establish long-term credibility. As a result, athletes are encouraged to seek out professionals with proven expertise, industry-specific certifications, and a track record of success to safeguard their financial well-being. For example, an experienced and knowledgeable adviser knows better than to call their athlete-client after losing a tournament final; also seasoned advisors are aware that when it comes to athletes who travel, compete and train all the time, they will have to be persistent about finding a window in the athlete’s busy schedule to discuss important issues and expedite financial and other processes.  Athletes are not available all the time and the athlete’s advisors need to be able to work around that while getting done what must get done.

While it’s important to have a strong financial team, be aware that some professionals work on commission. This means their recommendations may not always align with your best interests. Instead, consider working with fee-only professionals or those who operate under a fiduciary duty, ensuring they are legally required to act in your best interest.  You must always try to understand what motivates someone, which goes back to our previous point, vis-à-vis surrounding yourself with people you like and trust. You should be careful with financial professionals who promise huge returns on the investments they recommend.  The promise of extremely high returns may be a warning that you should stay away from such people.

When your finances allow it, your financial team should ideally consist of:

• A business manager – Oversees daily financial operations.
• An attorney specializing in business, tax, and estate matters – Manages legal obligations.
• An accountant/tax advisor – Ensures compliance with tax laws.
• A certified financial planner or investment advisor – Creates investment strategies tailored to the unique income structure of athletes.
• An insurance specialist – Protects your assets, career, and future earnings.
• A digital security consultant – Protects against identity theft, online fraud, and cyber risks, which are increasing for high-profile athletes.
• A brand and marketing consultant – Guides sponsorships, endorsements, and personal branding to maximize your market value both during and after your career.

Your financial team should work closely with you and your agent to always be on the same page and to ensure that everyone’s input is considered when major decisions will have to be made.

So how are you going to choose your financial freedom dream team?  Here are a few tips.

1. You want to find professionals who will give you the best possible advice – not the ones just looking after their own interests, so make sure that they do not work on commission, or if they do, they should disclose it to  you and let you know that they are bound under a fiduciary duty to act in your best interest. It might be a good idea to tie their “fate” to yours. Assuming that people are naturally inclined to look after their personal interests, then trying to align their interest with yours might be the best guarantee that they will always work for you.
2. You should be aware that certain financial professionals are experts in a particular service, but not in others.  An accountant for example may not be the best person to do your financial planning; you need a certified financial planner to do that. Just because someone has a certificate, or a degree in a finance-related subject does not automatically imply that they are experts on all matters regarding your finances.
3. You should not rely entirely on one financial advisor; you need to build a collaborating team comprising of different types of expertise. This will lead to disagreements and debates which is certainly a healthy thing and good for you. If you involve multiple unrelated parties in your decision-making process then the chances that someone might deceive you, trick you, or provide you with ill-advice, become slimmer.
4. Ensure that your financial experts welcome input from the other professionals in your financial team. In other words, that there is synergy and collaboration in the broader team. While healthy disagreements and debates are welcome, you must make sure that the members of your team can also work with each other.

The best advice that we can give you though, is to educate yourself on basic financial and investment concepts so that you are able to evaluate the advice given to you and make financially sound decisions.  Creating your dream-team of advisors should not be considered a substitute to financial literacy. You need to remember that basic financial knowledge can really save the day when it comes to financial decisions with a life-long impact

Action Steps – Exercise 1 (10 minutes):

We have provided a list of professionals that we think you should include in your team (a business manager, an attorney who specializes in business, tax and estate matters, an accountant/tax advisor, a financial planner or money manager, an insurance specialist, a digital security consultant and a brand and marketing consultant). Try to think what the function of each might be and why they will be of use to you.

Selecting your agent

One of the most important decisions an athlete can ever make is the choice of their agent.  Choosing the right agent, the person who will guide, mentor and maximize the value of the athlete is an important decision.  In a short career that lasts no more than a few years usually, every decision counts and thus any decision the athlete makes is critical and it should be made cautiously and through careful evaluation of every relevant detail and factor.

Having a network of fellow athletes, coaches and other sports professionals will give you the opportunity to meet with many agents.  When evaluating agents, you should make sure that at the very least they have the following qualities/characteristics:

• They are trustworthy
• They are honest
• They have a good reputation
• They have a good knowledge of female sports
• They are accessible and available
• You matter to them, if not personally, at least professionally

During the selection process you should also look into the agents’ client lists.  The size and composition of an agent’s client list is usually indicative of how successful the agent is.  The success of the agent’s clientele is one of the things that an athlete should check when evaluating her options.  The age of the agent’s athlete clients is another factor that should be examined; a balance of client ages is a good indicator that the agent has a steady flow of clientele which in turn indicates that the agent is competent and trustworthy. Put simply, make sure that they are neither washed-up nor a complete upstart.

Once athletes choose the agent they consider the best fit for them, an agreement has to be signed for a certain period of time when the athlete will be considered their agent’s ‘asset’.  The agreement between the athlete and the agent will be on a revenue sharing basis where the agent usually gets a percentage of the athlete’s contract, and in some occasions may get part of the athlete’s transfer fees, when applicable.

So, what are the responsibilities of sports agents towards their athlete clients? Among other things:

• They represent and promote athletes in dealings with current and prospective employers.
• They develop strategies for their clients’ athletic careers so as to ensure their clients’ success.
• They are responsible for finding employment for their athletes, for handling their sports contract negotiations and for dealing with all athletic issues that may arise.
• They handle sponsorship and endorsement contracts for their athletes and coordinate the athlete’s promotional activities.

Some of the elements that should characterize the dynamics of your relationship with your agent are excellent and regular communication, transparency, trust and understanding. Besides handling the athlete’s career, a good agent usually acts as some sort of a mentor to athletes.  When the athlete is faced with difficulties and cannot handle pressure, the agent usually intervenes and makes sure that the athlete handles things properly. In a way, they complement the coach in guiding the athlete, albeit, in different things.

Your business manager is fundamental to your professional success

Athletic business managers handle the athlete’s day-to-day affairs, and they make sure that both the financial and business aspects of an athlete’s sports career run smoothly.  They can be either on a part-time or full-time basis, depending on the athlete’s needs. Each individual career athlete can be considered a business of its own and as such it needs a business manager to run it efficiently. Today, managing an athlete’s career also often includes overseeing their social media presence and coordinating online brand strategy. A business manager may help ensure that your digital image aligns with your broader personal brand and professional goals, collaborating with marketing experts when necessary. Maintaining a consistent, positive, and strategic online presence is increasingly critical to maximizing both athletic and commercial opportunities.

A business manager is the person who deals with all of your daily responsibilities, not just the financial ones, but anything that needs to be taken care of including yours and your family’s travel arrangements, house maintenance issues, shopping and beyond!  A business manager is necessary for the optimal functioning of your business operations so that you can devote your mind, time and effort to your ‘athletic operations’. They should be your shadow, your guardian angel, your right-hand (wo)man who assists you in your day-to-day operations.

Business managers have numerous responsibilities that revolve around making it easier for their clients to focus on winning without worrying about the business or organization side of sports. In addition to handling day-to-day business and financial matters, an athletic business manager is somewhat of a spokesperson for their client, charged with making sure all their needs are met and that they are in the best possible position to succeed.

Obviously, your choice of a business manager is instrumental to your overall success, and you need to be very careful when selecting such a person.  First and foremost, since this person will be the buffer between you and the rest of the world and you will probably be spending a lot of time together, you need to like, trust and be comfortable with them.  Additional requirements may include exceptional communication skills, financial management capabilities and organizational and time management skills.

Ideally, your business manager should be an honest, trustworthy person who combines a business/financial background with a love and knowledge of sports.  It is also important for such a person to have a good business sense, the ability to communicate clearly and to be taken seriously by others, especially in discussions about big issues.

A good attorney can protect you in a number of ways

A skilled attorney is a critical member of your advisory team, protecting you from financial, legal, and reputational risks. From negotiating contracts to defending your interests in legal disputes, their expertise ensures that your career and wealth remain safeguarded.

Contract Reviewing – your attorney will be present in negotiations and review your contracts, either sporting or commercial/sponsorship and check whether they are correct and to your best interest. Also, your attorney will help you understand what is being agreed upon and what is expected to be done by all parties involved.  In addition to contract review, a good attorney will help negotiate better terms, ensuring you don’t unknowingly sign contracts with exploitative clauses, hidden fees, or excessive obligations. Many athletes have suffered financial setbacks due to poorly structured deals—your attorney ensures that every agreement aligns with your best interests and future goals. Therefore, they need to be experienced in such affairs in the context of sports so as to know all the tricks and pitfalls or alternatively be sharp enough to identify them.

Asset Protection – You always need to protect your wealth and assets against any claim that may arise from creditors or lawsuits. By setting up trusts, wills and other legal tools, your attorney can assist you to create your asset protection strategy and will provide you with the required protection against any action that may harm your wealth and assets. There are various mechanisms and cautionary steps that you and your attorney can take to maximize the security of your property.

Intellectual Property Protection – Your image is one of the main assets that you may take advantage of and monetize on. Your attorney will handle for you all required Trademark, Copyright and NIL Rights Registrations.  In addition, an attorney may guard you and help you protect against any infringement and unauthorized use of your name, image and likeness.  In today’s digital age, social media and NIL (Name, Image, and Likeness) rights have become crucial sources of income for athletes. Your attorney ensures that brands and sponsors respect your agreements and that your image isn’t exploited without proper compensation. They can also assist in enforcing contracts with endorsement partners and digital platforms.

Media Representation – Being an athlete means that you will attract the spotlight. Your attorney, in collaboration with public relations professionals, helps manage your public image, defends against false accusations, and ensures that media narratives do not damage your career. In crisis situations, they work swiftly to control damage and protect your reputation. Your public figure and perception are something that you should always be very careful with, since it can affect both your career and income potential.  In the event that you gain publicity due to a lawsuit against you or a controversy, your attorney can act as your media representative and provide you with positive media representation.

Charity – When deciding to engage in charitable gifting either by donating or setting up a charitable or non – profit organization you may have your attorney handle all the legal matters for its setup and subsequent management.

Barrier against friends’ and family’s requests – Your attorney can also become the buffer between you, and your friends and family. When a friend or family member come to you asking for a loan, or to invest in their “great business opportunity”, your attorney can play the role of the person who will say no, if whatever they are proposing is not to your best interest. This can take a huge burden off of you.

Mentoring is key to your growth

Mentoring has been around since the time of Ancient Greece. It comes in the form of an informal relationship at work, school and within the family. Mentoring is the provision of guidance and counsel to an individual by a more experienced, wiser and usually older person.

Successful people around the world, be they athletes, entrepreneurs or artists, have had mentors who helped them unleash their potential. At any point of your career, mentors can prove vital. They can guide you towards taking the right direction in your career, assist you to have a head start in the right direction, and help you discover the proper way to enjoy this journey.

Mentoring is not a one-size-fits all endeavor. Having a mentor is not only about the advice you receive or the lessons you learn from them, but it is also about what you are willing to share with your tutor. Honesty is an important parameter in creating a healthy mentor-athlete relationship if you really want to grow and improve yourself. Remember that it’s a win-win situation. A good mentor will help you by listening and sharing their knowledge and experience. At the same time, you will build the backbone of your success while realizing that you can achieve your wildest dreams, and perhaps financial victory as well. Long-term positive mentoring relationships develop through demonstrating positive relationship behavior such as authenticity, empathy, collaboration and companionship.

It’s not that easy to choose a mentor who can meaningfully contribute towards taking your career to the next level. Let’s find out how an athlete can wisely choose a mentor, so that the mentorship is meaningful and allows the athlete to maximize what she has gained through it.

Making the Right Decision Requires the Right Reasons

As an athlete, you might believe that having a professional athlete as your mentor may be a really good option. This is not always the case, unless you are planning to play sports for the rest of your life. If you really want to focus on succeeding financially in your life, you must pick a mentor who will be able to offer you the advice you really need. Mentors are caring individuals who, along with family and friends, provide you with support, counsel, friendship, reinforcement and a constructive example.

Are you dreaming of starting your own business? If yes, then find an entrepreneur who has successfully managed to build a business from scratch. There are hundreds of people out there who can share their successful life stories with you and help you achieve your dreams. Just make sure your mentor’s professional experience is somehow related to what you expect to achieve businesswise. Below, we list 11 characteristics that we believe every successful mentor should have.

Characteristics of a Good Mentor

1. HAS EXPERIENCE – Your mentor should have the relevant experience so that she can act wisely towards your benefit.
2. HAS VISION & VALUES – Find a mentor whose values align with your values and who shares the same vision of achievement as you.
3. SUPPORTS YOU – Your mentor should celebrate with your successes and pick you up in your failures.
4. CHALLENGES YOU – Choose a mentor who challenges you and always pushes you to become better.
5. PROVIDES FEEDBACK – Pick a mentor who will help you understand exactly why something went wrong by providing useful feedback.
6. RESPECTS YOU – The right mentor sees you as their equal and does not underestimate neither you nor your capabilities.
7. IS A GOOD LISTENER – You want a mentor who is not only willing to follow their own beliefs but mostly listen to yours.
8. IS TRUSTWORTHΥ – If you cannot trust and rely on your mentor, then you will not be able to learn from them.
9. IS ALWAYS AVAILABLE – Find a mentor who is always available to provide you with the advice and assistance you need. Your mentor should maintain a steady presence in your life.
10. FOCUSES ON YOU – Your mentor focuses on your needs and tries to improve your prospects.
11. ACCOMODATES YOU – You want a mentor who does not impose their opinion and beliefs on you and does not try to transform you into something you are not.

The motivational speaker, consultant, author and lecturer, Bob Proctor, who has transformed millions of people’s lives with his work, claims that: “A mentor is someone who sees more talent and ability within you, than you see in yourself, and helps bring it out of you.”

Always remember that having a mentor is not far from looking at yourself in a mirror. Make sure that you look for a person who reflects your professional style, your personal goals, and your overall vision.

Mentors and Gender

As we have already mentioned and as we will keep mentioning throughout the course of this program, this world can be hostile to women from time to time and although things are changing, we are still a long way from an acceptable degree of equality. Having said that, it might be worth considering the impact of gender on mentoring. Undoubtedly, women are in a better position to appreciate and truly comprehend your anxieties, feelings, struggles and emotions than men.

That means they can be more effective in guiding you because mentoring someone is a mixture of possessing the necessary skills, expertise and experience in a given subject, but also connecting with the person you are supposed to guide. Women are better suited for understanding women and spotting their strengths and weaknesses, and subsequently channeling them towards the right direction. Having someone by your side who understands the difficulties, challenges and struggles that women have to cope with on a daily basis throughout their lives, can definitely be a plus when it comes to your mentor.

Moreover, you would be contributing a small part in alleviating existing inequalities. That the world of sports is a male-dominated industry is a well-documented fact but to a lesser degree in the case with mentoring. With the business landscape changing there is no reason that the sport industry should not change with it. Therefore, the positive effect of choosing a woman as your mentor, is two-fold. One, you get someone who is better situated to mentor and guide you and two, you help change the world that keeps women away from having the same opportunities and make the same money from doing the exact same job as men.

We are not arguing that you cannot find men you can do an equally good job, but a female mentor can give you that extra touch which will make the difference. With more women succeeding in all fields, finding someone who combines all the characteristics that we have talked about is more realistic than ever.

Real-Life Example (5-minute discussion) Allyson Felix and Athing Mu – A Powerful Mentorship in Track and Field Allyson Felix, one of the most decorated American track and field athletes, has been an incredible mentor to Athing Mu, a rising star in the sport. Mu, who made headlines by winning gold in the 800m at the Tokyo 2020 Olympics, has expressed how much Felix’s guidance has shaped her career and mindset. Felix, who is retiring after a distinguished career, began mentoring Mu several years before the Tokyo Games. Mu, being a young and relatively new competitor at the professional level, found Felix’s experience and calm demeanor invaluable. Felix’s advice to Athing centered around how to stay grounded despite the pressures that come with being a top-tier athlete. Felix, who faced her own struggles with managing life outside of athletics, including her battle for maternal health rights and her advocacy for better pay and treatment of women in track and field, encouraged Mu to balance ambition with self-care. Felix’s mentorship was instrumental in helping Mu handle the high expectations placed on her ahead of the Tokyo Olympics. Mu credits Felix with helping her navigate the emotional and mental aspects of competing on the world stage, including maintaining confidence and resilience in high-pressure moments.

Seek advisors with an understanding of female sports

There are many differences between male and female sports: salaries, investment levels, endorsement, sponsorships and so on. Female sports do not get the same coverage as male sports and subsequently the fame, adoration and money that accompany it. Having that in mind, the landscape of female sports is different to that of their male counterparts which obviously has implications on the job of advisers and agents.

Investors only care about profit and/or the prospect of profit. Now, the three main avenues of revenue for the sports industry are TV rights, attendance and sponsorships with the first being the major one. Male sports dominate in all three, although, by all indications there is a huge potential for female sports in these three areas which means that investment in female sports is likely to be a good idea. Moreover, media coverage between the two genders is not at par and therefore women have to be more inventive in this area. Right now, the general mood of the public or the consumer of sports is looking more favorably towards female sports as it is manifested in the growing number of people taking an interest in women soccer, tennis etc. In addition, sponsorships have started reflecting this shifting mood, as the influence of female athletes on consumers is on the rise. All these put the industry on a turning point with all that it entails for current athletes and upstarts.

That means that the people that you employ to help you—advisers and agents—should have a good grasp of the bigger picture and the changing landscape but also have the imagination and the ability to think outside of the box in order to maximize the benefits and perks for you. The differences between male and female sports dictate that a “one-size-fits-all” approach will not cut it. Advisers need to consider the different financial and non-financial realities of female sports in the first place and then construct a strategy based on those realities.

Certainly, advisers can borrow certain tactics from the male camp but for the most part should try to come up with fresh ideas and alternative routes for promoting female athletes. For example, one of the causes of the disparities between male and female sports are institutional barriers such as media coverage. Therefore, your agent will have to push the athlete to alternative outlets for promotion. A lot of successful women athletes have pinned their PR hopes—quite successfully—on social media and through reaching out to their fanbase directly.

Furthermore, given that there is an ongoing debate where women are struggling for greater equality, a strategy that focuses on other aspects of the athlete aside from physique and talent, is likely to have positive effects for the athlete. For instance, interesting background stories where an athlete has overcome the odds to succeed, usually give them a unique twist. Several athletes have risen above roadblocks, unconventional childhoods and poverty such as Ronda Rousey, Megan Rapinoe etc. Such background stories sit well with current fights for greater equality and inclusion and increase exposure for athletes and their attractiveness for sponsorships and endorsements.

Real Life Example: The Collective (5-minute discussion) In 2019, Wasserman one of the most massive agencies in the world launched The Collective; a new division focusing exclusively on promoting the visibility of women in entertainment and sports. The aim is to link female athletes to fans, consumers and the world’s biggest companies. Wasserman was already a leader in the promotion of female sports as it represents numerous female athletes including half the US Women soccer team. In late 2020, The Collective announced the formation of a Think Tank for the purpose of researching and offering insights into issues of gender equality. In 2023, The Collective released a study titled “The New Economy of Sports,” developed in partnership with the Royal Bank of Canada (RBC). This research quantified the pay gap between male and female athletes and highlighted the significant influence women athletes have over their fan bases. In 2024, The Collective expanded its efforts by launching “The New Economy of Sports – Part II,” focusing on investment opportunities in North American women’s sports teams. This research, also in partnership with RBC, projected that the value of National Women’s Soccer League (NWSL) and Women’s National Basketball Association (WNBA) teams would increase by at least $1.6 billion over the next three years. The study introduced a new blueprint for women’s team valuations, considering 40 key variables and investors’ motivations across different ownership structures. What does this Real-Life Examples teach us?

Action Steps- Exercise 2 (10 minutes)

Athletes should always have their guard on when they meet people that they are considering of hiring as advisers. Please list a few things that you would view as “red flags” in someone you meet and are considering of hiring as your advisor.

Protecting the sports professional from financial advisor improprieties and fraud

It is fair to say that money draws criminals like honey draws flies!  In professional sports, there is a lot of money flowing around, which makes it extremely attractive and lucrative for potential financial fraudsters.  Professional athletes have traditionally been targeted by fraudsters and a sizeable percentage of them end up as victims of investment fraud or financial scams.  The global sports business and professional players’ salaries are increasing in value each year and so do financial fraudsters.  The revenues of professional athletes nowadays are growing fast due to large sponsorship/endorsement deals, and a lot of financial predators out there want a piece of the action.

The steps outlined below, which are simple and easy to follow, can help professional athletes protect themselves from being victimized by financial mismanagement and investment fraud.

1. First and foremost, it is imperative that professional athletes do not hand over control of their finances to anyone! Your financial independence is non-negotiable. Do not hand over complete control to anyone—including family, friends, or agents. While trusted advisors can provide guidance, final decisions should always be yours. Many athletes have gone bankrupt because they allowed others unrestricted access to their wealth.
2. You should devote some time and do your homework on the recommended investments. You should be in a position to evaluate the basics of an investment opportunity starting with whether such an investment and its expected return make sense.
3. You should invest in teams of advisors who are backed up by well-established firms, since these types of firms impose and enforce strict and continuing compliance standards and ethics training upon their employee advisors.
4. . . Even if your advisor is part of a reputable firm, do your own research. Check their licensing, regulatory history, and any past complaints. In the U.S., resources like FINRA’s BrokerCheck and the SEC’s Investment Adviser Public Disclosure (IAPD) can help you verify an advisor’s track record.
5. You should always seek referrals for their prospective financial advisor, especially from people who have been working with them for a number of years because it may take a few years for the consequences of financial mismanagement and/or fraud to surface.
6. Many financial planners, investment bankers and other financial professionals often work on commission. That means they only get paid if the athlete invests in what they recommend, therefore you need to have full disclosure from potential advisors, if this is the case. and they may not always give the best advice or have the athlete’s best interest in mind.
7. Beware of Fake Agents and NIL Scams: With the rapid growth of NIL opportunities, athletes have also become prime targets for scams involving fake agents, fake brand representatives, and fraudulent endorsement offers. These scams often promise quick money or guaranteed contracts but can result in major financial losses or reputation damage. Always verify the credentials of anyone offering to represent you or broker endorsement deals and never sign anything without consulting a trusted attorney or advisor.
8. The financial advisor should be willing to spend the necessary time to educate you on the basics of whatever investment they propose and answer questions about your investments, what is the expected return on the investment and what is the worst case scenario if the particular investment goes sour.
9. You can build a protection firewall by requesting frequent and regular updates on your financial position and the status of your investments. If, for example, you require bimonthly meetings with your team of advisors where the financial advisor presents to the whole team your current financial position vis-à-vis the previous one and reports on the happenings between the current and the previous period, it leaves very little room, if any, for financial fraud to take place.
10. And finally, you should have your guard on with retired sports players who have been recruited by investment advisors to act as liaisons in getting other athletes to participate in investment schemes initiated or favored by the investment advisor they work with. The perpetrators of financial scams tend to employ and use retired athletes as bait to lure active athletes into investing in such schemes.

You should always remember that your advisors just serve the purpose of informing you about all your available options, but the financial decisions are ultimately your own.  You need to be aware that promises of huge investment returns may be a warning sign of a financial scam. There is no such thing as a “free lunch”, and this is something to always remember!

Action Steps- Exercise 2 (10 minutes)

Athletes should always have their guard on when they meet people that they are considering of hiring as advisers. Please list a few things that you would view as “red flags” in someone you meet and are considering of hiring as your financial advisor

Seeking advisors with international expertise for your international sports career

Being a professional athlete is not the same as having a typical job like everyone else. Clubs or agents from all over the world may express their interest towards having you in their roster.  Athletes face a higher likelihood of relocating compared to other professionals. Adjusting to a new country means adapting to its culture, lifestyle, and legal system. Advisors with strong international networks can ease this transition, helping you settle in smoothly and focus on performance. Therefore, athletes must be able to cope with new ways of life and new cultures.  Advisors with a great international network and exposure will be able to help athletes settle in new environments, while facilitating their adjustment in their new countries of residence.

International scouting networks and global player transfers are more common than ever. Athletes must be prepared for the possibility of playing in a new, unfamiliar country at any stage of their career.  When the right opportunity arises and you find yourself in a new country, there are many things that you need to deal with and take care of in order to keep your mind focused on the field and have nothing else to worry about.  Your agent and other advisors in your home country should be able to reach out to local experts through their international networks so that you have at least legal and tax guidance when you first relocate. In addition to legal and tax guidance, you should also consider engaging local brand and marketing advisors to capitalize on growing international sponsorship and endorsement opportunities.

Every country has different rules and regulations that you need to comply with. Even though it is not an athlete’s task to worry about compliance matters, you need to make sure that you comply with local laws, because at the end of the day it is you who bears the ultimate responsibility.  With complex taxation laws and double tax treaty provisions, it is difficult to cope by yourself.  You need to have a competent tax advisor in your new country of tax residence who will guide you through all these taxation minefields and protect you accordingly.  Moreover, the tax advisor needs to understand the tax laws in your home country and coordinate with your home country CPA to make sure that you are tax compliant in both countries.  With most countries taxing their residents on their worldwide income these days, and the US being one of them, you may have to file tax returns and pay tax in both countries simultaneously.

In addition, the laws of each country are different, and they are usually in line with the culture of the country.  You need to have a basic understanding of what is both socially and legally acceptable so that you are legally compliant at all times; a good local attorney will be able to offer you support in this area and help you avoid unpleasant situations.

Action Steps – Exercise 3 (15 minutes):

Let’s now check what you took away from this class before we conclude. Please take the following mini quiz. Be prepared to explain and discuss your answers:

1. Whose advice would you follow?
2. Advisor A states that he found a very lucrative investment opportunity for a recycling factory where you will invest $200,000 and within two years it will yield a return of $800,000. You would be one of the first investors which explains the high yield.
3. Advisor B states that there is a great opportunity to invest in a financial technology company which will soon hit the market. She suggests you invest between $50,000-$100,000 and gives you the relevant business plan to study before you make an investment decision. The investment is expected to make a considerable profit but probably it will take more than a couple of years.

Answer: Definitely not A: Noble cause BUT unrealistic promises (200k to 800k). Also, the fact that you will be among the first investors is not necessarily a good sign. On the other hand, B sounds reasonable, and it is backed up by a business plan, so you have enough information to make a sound decision.

2. You are at the first stages of your career, and you are trying to find an agent. Two people approach you. Choose one of the following:
3. Joanna is young and ambitious and not much older than you and she concluded her volleyball career a few years ago. She hasn’t had many clients but the few she had, she has guided through their first steps and made sure that they got very good contracts.
4. George is a hot-shot sport agent who represents some very big names. He wants to sign you up and says that once you sign, he will do everything for you, and you will not have to worry about a thing. “I will only bother you for signatures” he concludes.

Answer: I would lean more towards Joanna (a). She’s someone who knows the difficulties of a sports career, and closer to your age, which means that you may hit it off, and she has successfully guided people at your level. Although George is much more experienced and successful, the fact that he has more high-profile clients means less attention to you and also you want to be included in the decision-making, you don’t need someone who will “only bother you for signatures”.

3. Two people approach you and ask you to invest in their business ventures. Choose:
4. Person A is your cousin! He wants $50,000 for his online clothing delivery platform. You ask for a business plan, but he does not have one.
5. Person B was introduced to you by one of your advisers who wants $50,000 for his food delivery platform. He does not have a business plan; he just gave you a two-page general power point presentation.

Answer: This is a tricky question, and the answer is none of the two! You don’t have enough information. Sure, one is a family member but that’s a lot of money they are asking. You shouldn’t just give it to them because they are family. Person B was introduced by your adviser, thus probably much more trustworthy. But again, there is insufficient information to decide at this point. You should first look at business plans and numbers yourself before deciding where and if to invest in either of the two.

4. Choose your lawyer:
5. Sports Lawyer X is one of the best litigators out there. She has represented her clients in courts and has never lost a case be that game suspensions or tax-evasion cases.
6. Sports Lawyer Y’s litigation skills are not her best suit. However, she has good PR skills and is pretty good when it comes to negotiating commercial agreements, especially sports contracts and sponsorship agreements.

Answer: Go with Y (b). The first one is the best litigator but since you are an athlete you need much more than that from your lawyer. Remember: contract reviewing, asset protection, NIL protection, media representation. The fact that lawyer Y has good PR skills and is good at negotiating commercial contracts are both good points for choosing her over X. You should prefer a well-rounded lawyer over someone who excels in just one of the things you need. Alternatively, you will need more than one which is an option, although probably unnecessary.

5. Choose your business mentor:
6. Charlene was a professional tennis player who was considered one of the best in the country. During her career she started 2 businesses but they both failed in the end. After retiring she decided to become a business mentor. You have met her recently and you instantly hit it off, so you are considering her to become your business mentor.
7. Joanne was an amateur cricket player and has been working as a business consultant for over 15 years. She has successfully worked with several athletes in the past but she has mostly worked with non-sport persons. You have met her recently and she has offered to become your business mentor

Go with (b).  We talked about preferring people you feel comfortable and friendly with, but we also need someone who knows what they are doing.  Charlene, although a former athlete, she has failed in both of her business ventures. Joanne on the other hand, seems to know what she’s doing and the fact that she has worked with both athletes and non-athletes successfully makes her a better candidate.

Lesson wrap – up

In this lesson, we explored the critical role of building a winning team of advisors and how each advisor contributes to the success, financial stability, and long-term career growth of a professional athlete.

We emphasized that an athlete’s career is not just about performance in the field, but also about making strategic business and financial decisions that impact their future. Choosing the right advisors ensures that athletes maximize opportunities, avoid costly mistakes, and protect their wealth throughout their career and beyond.

We discussed the importance of having a trusted financial team, including a mentor, a business manager, a legal expert, and an agent, and how each plays a distinct role in protecting and managing different aspects of an athlete’s life and career. We also covered the challenges of playing internationally and why seeking advisors with global expertise is essential for compliance with legal, tax, and financial regulations in different countries.

One of the key takeaways from this lesson is that athletes must remain actively involved in their financial and career decisions. While advisors provide guidance and expertise, the final responsibility lies with the athlete. Staying informed, asking the right questions, and working with experienced and trustworthy professionals are the best ways to secure long-term success.

At this point, we will wrap-up today’s lesson.  First, we will go over the learning objectives of this lesson and we want your feedback as to whether they have been achieved, and then we will address any questions you may have.  Please feel free to ask anything you’d like in relation to today’s lecture, and we would love to hear how the concepts we discussed today relate to you and your greater life plan.