Becoming a professional athlete is an exciting journey – but it can also be an uncertain one. From contracts to agents to handling personal finance, turning pro involves many more financial complexities than most athletes expect.
For some first-time pros, signing their contract may be their first true windfall. Maybe they don’t have time to manage their own money, or maybe they’re not sure which investment strategy to pursue – either way, consulting a trusted, experienced Financial Advisor is a great first step. However, without prior experience in advising, many athletes make the mistake of hiring the only Financial Advisor they’ve ever met.
Whether it’s a relationship formed through their agent or an independent search, it’s smart for athletes to consider the opinion of a second advisor. Unfortunately, many pro athletes have lost their hard-earned money to bad advising – and many more are likely missing out on great investment opportunities without a second set of eyes. The sports world is constantly shifting – for example, the recent MLB lockout – and with finances in flux, it’s always smart to have another opinion.
Here are four reasons why pro athletes should consult a second Financial Advisor:
- Expand your referral sources: It’s great to have a trusted agent – and even let that agent introduce you to your first Financial Advisor – but soliciting a second opinion helps you avoid an inevitable conflict of interest. With your agent in charge of your money and how it gets invested, you run the risk of relying on only one person’s financial savvy. And interviewing your own Financial Advisors – with questions tailored to your personal life – means getting exactly what you want and need out of an advisor.
- Build accountability and safety: There’s nothing worse than wasting your hard-earned money by falling victim to a bad Financial Advisor. Most Financial Advisors have good intentions and great training – but some see athletes as a financial opportunity, not as a client who deserves individually tailored advice. Consulting a second set of eyes means creating accountability for both your Financial Advisors – and getting double the opinions in times of urgency, like the recent MLB lockout.
- Keep your FA at the top of their game: Playing the toughest competition in the league brings out your team’s best side – and the same goes for Financial Advisors. A little bit of advisory competition can keep both your Financial Advisors on the top of their game – giving you the best service you can get. You can even consult with a second Financial Advisor on a “trial run”, and later decide which advisor you feel most comfortable with – or, if you’d rather stick with both.
- Diversify your investments: You’ve probably heard about the benefits of diversifying your investments with stocks, bonds, and ETFs. But the same holds true for diversifying your financial opinions. Advising isn’t an exact science; most Financial Advisors will take different approaches to investing your money and helping you reach your goals. Experiencing two (or more!) investment strategies can help you decide which aligns most closely with your vision for the future.