Skyrocketing salaries for top athletes and lucrative deals for college players have touched off a new gold rush among wealth management firms.<\/p>\n\n\n\n
Juan Soto\u2019s $765 million contract<\/a> with Major League Baseball\u2019s New York Mets highlights the unprecedented wealth being created by pro athletes, and the opportunities for wealth management firms that are handling their investments. With college players now earning six and seven figures for their name, image and likeness as well as women\u2019s sports on the rise, the population and wealth of pro athletes has made sports a key driver of growth in wealth management.<\/p>\n\n\n\n \u201cThe numbers have gone through the roof,\u201d said Molly Cloud, financial advisor and director of sports and entertainment at Morgan Stanley. \u201cThere is so much money that wasn\u2019t around 10 years ago. It makes our job more complicated and exciting to be part of that growth.\u201d<\/p>\n\n\n\n From longtime leaders in the space such as Morgan Stanley<\/a>, Bernstein, UBS<\/a> and Goldman Sachs<\/a>, to multifamily offices including Rockefeller Capital Management and even private equity firms, wealth managers are expanding their sports and entertainment segments and hiring former athletes to recruit more clients.<\/p>\n\n\n\n James Beale, a former hockey player, is now development director for Rockefeller Capital Management\u2019s Rockefeller Global Family Office and oversees the Sports and Entertainment group. Beale said that while athletes aren\u2019t all that different from other high net worth clients, having experience as a former athlete helps.<\/p>\n\n\n\n \u201cI\u2019ve seen a lot of friends in [sports] who maybe didn\u2019t spend enough time being intentional around their wealth. That put them in a tough spot. So understanding that and trying to help people avoid those hiccups at earlier stages in their career has positioned me well in overall athlete network,\u201d Beale said. <\/p>\n\n\n\n Beale said athletes, similar to other high net worth clients, often spend most of their time on their business or career and don\u2019t have much bandwidth for investing.<\/p>\n\n\n\n \u201cThey put 99% of their time into taking care of their body, managing their health and training,\u201d Beale said. \u201cIt\u2019s very similar to an entrepreneur who\u2019s focusing all their time on their business here. We come in as a trusted partner to help them manage their finances and give them back the time to focus on their craft.\u201d<\/p>\n\n\n\n Other advisors to wealthy athletes, however, say they have unique challenges. Unlike most wealth creators, who create their wealth as they get older, athletes make their biggest windfalls at a young age. Handling millions as a 20-something year old or, increasingly, even a teenager, carries special risks.<\/p>\n\n\n\n \u201cThey are earning more at a younger age than they ever will during the rest of their life,\u201d said Stacie Jacobsen, national director for client engagement and co-lead of the sports, media and entertainment group for Bernstein Private Wealth Management. \u201cTheir relationship with money is almost unique to almost anyone else we work with.\u201d<\/p>\n\n\n\n Given their relative youth, education is key to advising pro athletes. Jacobsen said athletes are used to exuding confidence, so they\u2019re often uncomfortable asking questions about investing.<\/p>\n\n\n\n \u201cThere\u2019s this sense that, \u2018Yeah, I got this,\u2019\u201d she said. \u201cBehind the scenes, they really don\u2019t. So I have to be open and will say, \u2018Do you have any other questions on these areas?\u2019 or \u2018Is that something you want to dive deeper into?\u2019\u201d<\/p>\n\n\n\n