Nice suits and grey hair are not the prerequisite for a qualified expert.
Contrary to conventional wisdom, the biggest risk that you face isn’t the volatility of the stock market, it’s bad financial advice from unqualified advisors.
One of the most common mistakes professional athletes make when they build out their team of advisors is to assume that any financial advisor is qualified to work with them.
Ideally, you want an advisor who has extensive experience working with people just like you. Never be a surgeon’s first patient. And never let a podiatrist operate on your elbow.
2 Biggest Myths
Age equals expertise: This is the easiest trap to fall victim to. As a society we are taught that as we grow older we theoretically should become wiser. However, there is no evidence that suggests that being older results in expertise. Logically, we know this to be true. Theo Epstein became the GM of the Boston Red Sox at age 28, Mark Zuckerberg founded Facebook at age 21, and the best athletes in the world are all under the age of 40. In addition, for many advisors this is their second or third career and they do not have the years of experience their age would suggest.
All advisors are the same: One size does not fit all. Take a look at who is the “traditional” client in the financial industry.
- 63 average client age
- $425,944 average account size
- Retirement planning is primary service
- 221 clients per financial advisor
Does this resemble you?
Most financial advisors may be able to construct an investment portfolio, but not many of them specialize in working with 18 to 35-year old individuals with sudden wealth, uneven cash flow, uncertain job security, lack of financial expertise, and who are targets of lawsuits, investment scams, and the other complexities that come along with being a professional athlete.
Working with professional athletes requires a holistic approach – looking at their entire financial picture, not just investments.
As a professional athlete you have unique needs that the traditional financial advisor is not qualified to meet.
Certified Financial Planner™ – The MLB of Financial Advisors
Only 17% of all financial advisors are Certified Financial Planner™ (CFP®) professionals, which is the most recognized personal financial planning designation in the world.
Working with a CFP® professional is assurance that he or she is a credentialed expert and performs to high ethical and professional standards. The designation comes with extensive training in financial planning, estate planning, insurance, investments, taxes, employee benefits, and retirement planning, as well as in CFP Board’s Standards of Professional Conduct, which are rigorously enforced. Most importantly, the CFP Board’s Standards of Professional Conduct require CFP® professionals to maintain a Fiduciary Standard, which means they are required to look out for your interests above their own.
CFP® professionals have completed university-level financial planning coursework and passed a 10-hour exam covering nearly 90 topics, from advanced tax planning to derivatives.
If your advisors do not hold any designations, in addition to investment licenses, understand that they have not demonstrated completion of any advanced education or expertise. You are settling for less than the best.