By Daniel Scott Johnson, Financial Advisor
Did you just sign with a sports team for more money than you ever dreamed possible? Congratulations! It means you truly are the best of the best. Unfortunately, all that success can lead you wide open to fraud.
Professional athletes are prime targets for unscrupulous financial managers. It’s all too common for professional baseball players, football players, basketball stars, and other pro athletes to earn millions, only to discover their fortunes have been hijacked by supposedly “trusted” financial advisors who, as it turns out, did not have their best interests in mind.
Why do athletes make such juicy targets?
First of all, professional athletes tend to be young. Most of the men—and we’re talking principally about men—who go pro do so either directly out of college or even sooner. If this is you, your peak earning years are usually in your mid-20s to early 30s. As a result, you tend to lack what the more senior generation calls “life experience.” Most troublingly, you may not have enough experience to recognize those “red flags” that so ominously signal when you’re being taken advantage of.
Second, your wealth tends to arrive very quickly, especially in comparison to other professions. In 2022, while the age of the average MLB player was just 28, the average MLB player salary was a hefty $4.41 million. Among professional basketball (NBA) players, the average age is 26 while the average annual salary is $9.6 million. And although the mean salary for NFL players with an average age of 27 is only $50,000 a year (for 17 games!), a star quarterback like Tom Brady (age 37) can make $30 million a year, including signing bonuses.
Of course, none of this remuneration includes income for endorsements and monies from other sources, which also really adds up. This begs a critical question: How many people in their 30s are making tens of millions of dollars a year, let alone men in their 20s?
Last, most athletes have little to no education in financial management. Someone who gets rich in investments, the stock market, real estate, or similar industries generally understands how money works. It’s how they got rich in the first place. But many an athlete’s fortune—much like that of an actor, singer, or other entertainer—is the result of superior physical performance. (Yes, significant mental and emotional conditioning is required to succeed in professional athletics, but financial management is not one of those disciplines.)
Here in Orange County, we’ve seen up close examples of professional athletes falling for an unscrupulous financial manager’s siren song. In late 2020, Irvine-based financial advisor Ash Narayan received a 37-month sentence and was ordered to pay $18.8 million in restitution, having been found guilty of stealing more than $30 million in savings from a roster of pro athlete clients, among them former major league pitchers Jake Peavy and Roy Oswalt, and ex-NFL quarterback Mark Sanchez.
Narayan had been an investment advisor at RGT Capital Management Ltd. According to the Los Angeles Times, “Prosecutors said that from December 2009 to early 2016, he advised his clients to invest in a money-losing online sports and entertainment ticket company in Illinois without telling them that he was on the board, or that it was a risky and unprofitable business.” He had also directed RFT employees to forge his clients’ signatures on authorizations to transfer funds, again according to the LA Times.
I created the financial firm Windfall Advisors to help people who, like professional athletes, come into sudden great sums of money. My clients want to protect and grow their wealth in a safe, secure manner. For two decades, I have made it my life’s mission to provide the most professional, productive, and compassionate wealth management and financial planning services possible, first as an assets management specialist with Wells Fargo Advisors, then a wealth management advisor for Merrill Lynch and Morgan Stanley, and founded Windfall Advisors in 2020. Windfall Advisors is a Fee-Only, Fiduciary, RIA Registered Investment Advisory Firm with a proven track record specializing in giving financial advice, financial planning and investment management.
Highly protective of your interests, I am also proud to carry a perfect regulatory record with zero client complaints. It’s my belief that you will see the value of my services based on this exploratory arrangement. Or, to put it simply, you don’t have to trust my words, but you can trust in the results.
If you’re an athlete who’s recently gone pro, or a long-time member of professional sports who wants to protect the nest egg you’ve worked so hard to grow, please contact me today. Together we can create a long-term wealthy program to safeguard you and your family no matter how the ball bounces.
