60 Minutes this past weekend aired yet another example of professional athletes being taken advantage of by slick-talking financial advisors. This is very similar to a piece that I wrote about back in July when three high-profile athletes Mark Sanchez, Jake Peavy, and Roy Oswalt were ripped off for ~$30M.
The key piece in both examples but maybe more so in the 60 Minutes piece is the share lack of due diligence on behalf of the players. One player, Vernon Davis who plays for the Washington Redskins, said he shoulders much of the blame for his losses.
The 60 Minute piece also highlights some responsibility on behalf of the NFL’s Players Association who put out an approved list of registered financial advisors with whom players can work. Advisors are required to pay a fee to be part of the NFLPA’s program but how they are vetted is unclear.
I strongly believe that there is a stereotype that continues to plague the financial advisory industry because of incidents such as the two I have highlighted in this post. Taking the first step to work with an advisor is sometimes a very scary and daunting task, to begin with, but made worse with negative headlines of bad people.
One of the underlying principles of why I got into this business and started my firm as an independent was to give back to people. My beliefs in this principle are highlighted in the book, The Go-Giver by Bob Burg and John David Mann. This is in stark contrast to those advisors who put their own interests first rather than their clients.
I have talked about how to properly vet and find a financial advisor here, here and here. I wish I had a way to get this into the hands of the NFLPA’s leadership as it might help their constituents down the road and not be taken advantage of.