Creating a winning team of advisors

Key topic

A championship team, in sports, business, or personal finances requires the help of different experts in order to be fully functional and successful. Just like your team has coaches, assistants, scouts, video analysts, trainers, doctors and so on, a financial/business team of a professional athlete should consist of certain professionals who can guide and help the athlete succeed financially and businesswise as well.

Learning objectives

• Understand the different types of professionals that can help you succeed
• Develop a plan on what to look for in each professional on your winning team
• Discover how to approach the selection process
• Appreciate the degree of control you need to maintain over your team
• Learn to recognize red flags in behavior, proposals and recommendations

Selecting the most suitable advisors

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 trusted, reputable, and established professionals within any given field is important to your life 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 sports, but in life as well!  Regardless of what type of career you will follow in the future, surrounding yourself with the right professionals is of paramount importance to your future success.

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 are educated, but whom you like on a personal level.  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.

While it’s important to have a great team on your side, it’s also important to be cautious so that you protect yourself from investment fraud and mismanagement of your wealth. There are various things you should keep in mind at all times to safeguard your wealth, with the most important being that your advisors should be there to provide knowledge, guidance and support to you without taking over. You should be the one controlling and making all the final decisions.

Your financial team should ideally consist of an attorney who specializes in business, tax and estate matters, an accountant/tax advisor, a financial planner or money manager, and an insurance specialist.  If you go pro in sports, your team may also include a business manager who would work closely with you, your agent and the rest of the team; you need to always be on the same page with your agent and financial team and ensure that everyone’s input is taken into account when major decisions will have to be made.

Remember that as your career progresses, whether as a professional athlete or not, you will need the services of these people even more. It doesn’t mean that all these people should be working with you and for you from day one. You probably won’t need them all at once anyway, or you may not be able to afford them at the beginning of your career. But as your career grows and the achievements increase, as you grow and your needs grow, then the services of a winning team of advisors will definitely become a requirement. In the event that you do not follow a professional sport career, either by choice or by circumstance, you should remember that this information is equally important for your professional life and your personal success, in any other occupation and in all industries across the board.

Here are some suggestions on how to approach the selection process of a winning team of advisors:

1. You want to find professionals who will give you the best possible advice, therefore you need to look for people with the proper education and background.
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 also do your financial planning; you need a certified financial planner to do that.
3. You should not rely entirely on one financial advisor; you need to build a collaborating team comprising of different types of expertise.

4. Ensure that your financial experts, welcome input from the other professionals in your financial team.

The best advice 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. And remember, basic financial knowledge can really save the day when it comes to financial decisions with a life-long impact.

Now let’s watch a 4-minute video on what a financial advisor is and the different types of financial advisors

WHAT IS A FINANCIAL ADVISOR

Choosing your agent

One of the most important decisions a professional athlete will ever make is the choice of their agent; especially for young athletes making their first steps in the world of professional sports.  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 on average, every decision counts and thus any decision the athlete makes is critical and it should be made carefully and by evaluating every relevant detail.

Young athletes need to search for an agent who will help them maximize their value.  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 are accessible
• You matter to them

During the selection process it is important to 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 a young athlete should check when evaluating agent options.  The age of the agent’s athlete clients is another factor that should be examined; a balance of athlete-client ages is a good indicator that the agent has a steady flow of clientele which in turn indicates that the agent is a competent and trusted one.

Once athletes choose the agent they consider the best fit for them, an agreement has to be signed for a certain period of time where 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.

Agents have a number of responsibilities towards their athlete clients and these responsibilities include the following:

• The 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 promotion activities.

Besides handling the athlete’s career, a good agent usually acts as 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.

Action steps – Exercise 1 (5 Minutes)

• What qualities would you look for in an agent? List 2 and explain why they matter to you.

A business manager is fundamental to the success of professional athletes

Professional athletes usually have a heavy schedule between their training and playing commitments.  Therefore, there is practically no time to deal with anything else.  This is where an athletic business manager needs to step in and undertake all the things that an athlete does not have time to deal with.

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.  Each individual athletic career can be considered a business of its own and as such it needs a business manager to run it.

An athletic business manager is the person who deals with all of the athlete’s daily responsibilities, not just the financial ones, but anything that needs to be taken care of, including the athlete’s and their family’s travel arrangements, house maintenance issues, shopping and many more. A business manager is necessary for the optimal functioning of the athlete’s business operations so that the athlete can devote their mind, time and effort to their ‘athletic 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 the day-to-day business and financial matters, an athletic business manager is somewhat of a spokesperson for their client, charged with making sure all the athletes’ needs are met and that they are in the best possible position to succeed.

Obviously, the choice of a business manager is instrumental to the athlete’s overall success and athletes need to be very careful when selecting such a person.  First and foremost, since this person will be the buffer between the athlete and the rest of the world and the athlete will probably be spending a lot of time with this person, it is necessary that the athlete likes, trusts and is comfortable with their business manager.  Additional requirements may include exceptional communication skills, financial management capabilities and organizational and time management skills.

Ideally, their 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

From managing, minimizing and responding to risk that may affect you, to reviewing contracts and providing you with legal representation, your attorney will assist you in many different ways.

Contract Reviewing – your attorney will be present in negotiations and review your contracts, either sporting or commercial and check whether they are correct and to your best interest. Also, they will help you understand what is being agreed upon and what is expected to be done by all parties involved.

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.

Intellectual Property Protection – If you go professional, your image will be 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 Registrations.  In addition, an attorney may guard you and help you protect against any infringement and unauthorized use of your name, image and likeness.

Media Representation – If you go professional, as an athlete, you will attract the media attention and lights on you. Your public figure and perception are things that you should always be very careful with, since it can affect both your career and income potential. Especially 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 set 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 the professional athlete, and their friends and family. When a friend or family member comes to the athlete asking for a loan, or to invest in their ‘’great business opportunity’’, the attorney can play the role of the person who will say no, if whatever they are proposing is not to the athlete’s best interest.

Finding advisors with international expertise

As you are most probably aware, being a professional athlete is not the same as having a typical job like everyone. Clubs or agents from all over the world may express their interest towards having the athlete in their roster.  For athletes the odds of relocating are much higher compared to other professions. Therefore, athletes must be able to adapt and 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 a new country of residence.

Every country has different rules and regulations that athletes will need to comply with. Even though it is not an athlete’s task to worry about compliance matters, it is still their responsibility to make sure that they comply with local laws, because at the end of the day it is the athlete who bears the ultimate responsibility.  With complex taxation laws and double tax treaty provisions it is difficult for the athlete to cope by themselves.  They need to have a competent tax advisor in their new country of tax residence who will guide them through all these taxation minefields and protect them accordingly.

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.  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 as a result of lucrative sponsorship and endorsement deals, and a lot of scammers want a piece of the action.  Professional athletes have traditionally been targeted by fraudsters and a sizeable percentage of them end up as victims of fraud or financial scams.

The steps outlined below, which are simple and easy to follow, can help both professional athletes as well as people in more conventional careers, protect themselves from being victimized by financial mismanagement and investment fraud.

1. First and foremost, it is imperative that you do not hand over control of your finances to anyone!  And when we say anyone, we mean anyone and that includes parents, siblings, friends, agents, etc.  Financial advisors should not be relatives or close friends.  Personal relationships cloud money matters and may lead to feelings of entitlement to the money involved.
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 when the financial advisor comes from a reputable firm, you should still do some checking on the individual advisor.  A basic check on the financial advisor can be done by contacting the Regulatory Authority which granted the advisor the relevant financial services license to see if there are any grievances or complains against them.
5. You should always seek referrals for your prospective financial advisor, especially from people who have been working with them for a number of years.
6. Many financial planners, investment bankers and other financial professionals often work on commission. That means they only get paid if you invest in whatever they recommend, therefore you should always check the underlying value of whatever investment recommendations you are given.
7. 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 on how your money is invested, what is the expected return on the investment and what is the worst-case scenario if the particular investment goes sour.
8. 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 mismanagement or fraud to take place.

You should remember that 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”.

Now let’s watch a 2-minute video on a real case where a financial advisor pleads guilty in scheme to defraud professional athletes.

Man pleads guilty to defrauding athletes

Action steps – Exercise 2 (5 minutes)

• Have you heard of any cases where athletes have been defrauded by their advisors? Discuss the cases with the class

Action steps – Exercise 2 (5 minutes)

• Have you heard of any cases where athletes have been defrauded by financial advisors? Discuss the cases with the class

Lesson wrap-up

Today we focused on a very important topic that will help you whether you go professional or not.  Assembling the right team around you to help you handle your financial affairs, legal affairs, marketing, contract negotiations, endorsement and sponsorship deals, will be one of the crucial things you will have to attend to. If you go professional, your team will ideally consist of an attorney, an accountant/tax advisor, a financial planner or money manager, and an insurance specialist; in the case you turn pro, you will most probably need a business manager as well.   The key is to trust, like and get along with every member of your team individually but also collectively.

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 lesson and we would love to hear how the concepts we discussed today relate to you and your life!