Sports Stars Turned Advisors Help Guide Next-Gen Athletes

You’re probably used to seeing sports stars of yesteryear, sometimes even last year, hawking products in TV commercials (for a hefty fee), providing live commentary on games or coaching the players who succeed them.

Those are well established career choices for pro athletes once they retire from active competition. Some, however, choose a less traditional job: wealth management, NBA center Chris Dudley, Olympic sprinter and bobsledder Lauryn Williams and NHL winger Brian Bellows among them.

After witnessing the financial troubles of even highly paid athletes, some of whom go bankrupt or live in grinding poverty after years of multimillion-dollar contracts, these former pros feel a duty to guide the next generation.

“I’m sure most of us got into the business for the same reason,” said Marc Wilkins, Excela Wealth Consulting advisor and former Pittsburgh Pirates pitcher. “It’s almost a shame how much athletes can waste. I know a lot of advisors don’t even bother with athletes because they are spenders.”

Show Me (How to Manage) the Money

Athletes aren’t typical clients. They’re young, often single, and suddenly wealthy, but their careers can end quickly. Advisors must build plans that last 60–70 years. “You’re talking about a retirement span twice as long as the average worker,” said Walter Stith, advisor and head of global sports and entertainment for RM Compass Group at Morgan Stanley

And though they earn enormous sums, many lack financial literacy. “They might be the first in their family making $200,000,” Stith said. “There’s a great emphasis that needs to be placed on education. You don’t want to harp on mistakes and say, ‘I told you so.’”

His team closely tracks client transactions, showing them when they could run out of money if they overspend. “Most people don’t have an idea on how much they spend each month,” Stith said.

The NCAA’s 2021 ruling allowing college athletes to profit from name, image and likeness deals has given players earlier exposure to financial realities, which may prove beneficial in the long run. “College has become the training ground, not only for becoming a pro athlete, but for managing your money,” Stith said.

Going Pro

The odds of making it as a professional athlete are slim: Less than 2% of NCAA competitors reach the big leagues. Many train their entire youth for the chance; others just fall into it.

Stith didn’t start playing football until his senior year of high school. From there, he played college ball at Western Michigan University, where he studied finance and commercial law, before playing as an offensive tackle for the Buffalo Bills in the NFL and the BC Lions in the Canadian Football League in the mid- to late-2000s. “I never thought about going to the NFL,” Stith told Advisor Upside. “It was never a dream of mine, and it kind of just happened.” 

After his rookie year, he took an internship with Citigroup, learning cold calling and client management. “It gave me clarity for what life could look like after football,” he said. While Stith suffered his fair share of bumps and bruises as a football player, he said building a book of business and managing clients’ emotions might be even more difficult. Stith is also Black, which places him among just 6% of financial advisors in the US, according to Bureau of Labor Statistics data. “I didn’t already have family in the business,” he said. “It wasn’t a book that my dad or uncle built for me.” Even his former teammates weren’t necessarily a lock: “I figured any athlete would want to work with me since I have the experience of being one, but that wasn’t the case,” he said.

Pinch Hitter. Wilkins, the former pitcher, entered Major League Baseball in 1996, when the minimum salary was $109,000. It was more money than he had ever seen, but to stay in shape and help support an athlete’s lifestyle, a lot of players worked in the off season, he said. “I spent the off season carrying drywall at my hometown’s lumberyard,” Wilkins said. “All my pitching coaches did similar things.” 

He left pro baseball six seasons later, and having to find a new job was “a real slap in the face,” Wilkins said, especially when he was used to “spending money like it was never going to end.” Fortunately, Wilkins had been more frugal than most. His father had encouraged him to invest in mutual funds at 18, and he realized quickly, based on his teammates’ spending habits, that there was a significant need for financial advisory services that he could help meet. “Guys would roll into spring training with their mag wheels and bass speakers,” he said. “We all had that phase of buying bling and depreciating assets.”

Put in the Work. Even with education, advisors still see reckless spending. Wilkins recalled firing a client who kept raiding her IRA and racking up penalties. “She was spending herself into oblivion,” he said, adding that he butts heads often with clients, but always reminds them that he’s been in their shoes and is looking out for their best interests.

While overspending may never fully disappear, Wilkins believes athletes-turned-advisors can make a difference. “If you’re so disciplined about your workout routine, why can’t you be as disciplined about your finances?” he said. “No matter what money an athlete is making, when somebody comes and says, ‘I want to open a fusion restaurant, can you be a silent investor?’ the answer should be, ‘No, my financial plan doesn’t allow it right now.’”