Driven by the desire to secure income beyond their playing years — and tales of their contemporaries making millions on the next big thing — athlete investors are a rapidly growing segment in the world of wealth management.
But tending to the investment portfolio of a client expected to have a short career and a long retirement comes with a unique set of challenges. A new TV series highlights the roadblocks and opportunities that professional athletes face as they fight to turn the money they made on the field or court into investments that will enable them to live well once they’ve left sports. The show also illustrates the problems advisors must help solve if they want to work with these one-of-a-kind clients.
Authenticity, for instance, is just as vital as knowing what risks to take, former athletes say.
“Number one, have a real relationship. It can't be a transactional relationship that’s just about numbers and revenue ... These athletes need real advocates,” said Wale Ogunleye, a former NFL Pro Bowl defensive end and head of UBS Global Wealth Management’s sports and entertainment division.
Ogunleye, who joined UBS in 2019 after earning an MBA at George Washington University, moved from the gridiron to finance in an effort to help the next generation of players avoid his early investment mistakes.
Before the 2008 housing market collapse, Ogunleye was talked into buying five Miami apartments without fully understanding the risks. He was also one of several players caught up in an alleged Ponzi scheme run by a financial advisor who had been registered with the National Football League Players Association.
“This is the place where a lot of shady characters dwell. There are a lot of individuals who have come up in communities where they see these athletes as the only way out,” Ogunleye said. “They need advisors who want to hold their hand and teach them how to fish, teach them how to make sure the decisions they’re making are the right decisions — decisions that are going to create a legacy.
“Because the hardest thing for a creative individual, especially an athlete, is to really see the end of their career.”
Viewers will get an inside look at the perspective and decision making of athlete investors when “Front Office” makes its Nov. 14 debut on PlayersTV.
“Front Office,” presented by UBS, is a new original series that blends the premise of “Shark Tank” with the playmakers of “SportsCenter.” During each episode, entrepreneurs looking to secure early-stage funding will pitch superstar athletes like Chris Paul, Vernon Davis, Allyson Felix, Travis Kelce and Michelle Wie-West.
Ogunleye, who played in the NFL for 11 years, will serve as a coach and motivator to the 10 contestants making their pitches. He said that UBS has been working on the show's concept for quite some time.
“Athletes want to be seen as more than just being able to dribble a basketball or run the football. They want to be seen as entrepreneurs, innovators and creators when it comes to generating wealth outside of sports,” he said. “UBS was positioned to help change the narrative on the way the world looks at athletes. We're hoping that with this show, we show a great template for athletes on how they should look at their finances and the people that should be surrounding them.”
Ogunleye stresses trust as the most crucial element of any advisor-athlete relationship. Because there are a finite number of years that an athlete is able to earn at the highest level, each financial decision they make carries more weight.
Any real or perceived betrayal of that trust can damage a relationship beyond repair.
“Trust has to be there because there's not another way to generate millions of dollars outside of beating up their bodies,” Ogunleye said.
He added that more than ever, players are entering the league with a mind to invest, crediting social media for the uptick in athlete entrepreneurs.
Years ago, there was a barrier between athletes and the information needed to make smart investments. Now players can see their peers do it in real time and share their successes with the push of a button.
“I know when I was coming up, all we could talk about were people like Magic Johnson or Michael Jordan, but we never really knew how it was done. How did they transition and who is helping them transition?” Ogunleye said, citing the two basketball greats known for their investments in real estate and tech startups. “But now, there is a growing segment of entertainers and athletes who realize (they) have a great opportunity to make more money off the field and off the stage than I did when I was playing or performing.”
Advisors working with athletes should also prepare for the long haul. When considering what is best for your client’s future, don’t just think of them as the player making millions in their prime.
Think of them as the former player who may be battling a career’s worth of injuries.
“I don't care if you’re Tom Brady and you play for 20 years. It's still a small amount of time and he's going to have to find something to do with all this time when he does retire,” he said. “So our advisors and any advisors thinking of getting into the space should think about a long-term relationship that should stand the test of time. That's what this industry needs. More real relationships and less transactional relationships.”
