Financial advisors and other wealth management professionals aiming to work with athlete and entertainer clients or deepen their expertise with the niche can now study for a new certification.
The Sports and Entertainment Accredited Wealth Management Advisor, or “
While the more than
That quick path into riches sets them apart from other types of high net worth clients, along with the inevitable end of their sports or entertainment careers, which is “challenging financially as well as emotionally,” said Dan Johnson, the lead professor for the new designation. He’s a former NCAA Division I lacrosse player and coach.
“Typically these individuals become millionaires overnight. It’s a windfall, whereas a lot of high net worth individuals typically build their wealth over time or they might inherit and they're used to living in luxury,” Johnson said. “These are public figures, and they're often the targets of lots of different parties. State governments love to tax athletes and entertainers when they come to do their profession or their job in the state. So that's a big topic we talk about.”
Advisors to athlete and entertainer clients spend a lot of their time “preaching patience” and “managing the uneven income flow” of those careers, said Adam Hess, a vice president with St. Petersburg, Florida-based Cyndeo Wealth Partners. The RIA, which uses the Dynasty Financial Partners platform, works with about 50 entertainment and athletes in the NBA, NFL and professional tennis, according to Hess, who also played pro basketball in Europe.
“They earn money very quickly,” Hess said. “They also do a lot of things in life quicker.”
Investment portfolios and planning may get overlooked when people find themselves instantly famous and successful in that manner, according to Sharon Klein, Wilmington Trust’s president of family wealth.
“Finding the right type of financial guidance is key because young athletes commonly do not have the financial background to enable them to project their needs into the future, create budgets and a comprehensive financial plan,” she said in a statement. “Family members and friends, although well-intentioned, also may be ill-equipped to provide the type of complex tax, legal and investment guidance that will enable these athletes to build and preserve their wealth while protecting it from creditors, such as an ex-spouse in the event of divorce. Locker room advice can put a player’s assets and legacy at risk.”
Klein and Hess praised the idea of the certification program, though she pointed out that real-life experience may be the best teacher and he said that the knowledge gained from the course will likely prove more helpful to advisors than the formal title and designation. Advisors, aspiring planners or other professionals such as agents, lawyers or tax specialists can take the course while working toward the 17-year-old AWMA certification or on a standalone basis. Enrollees must score at least 70% on the three-hour, 85-question exam to get the SE-AWMA.
The course, which can also count as an elective toward a master’s degree, will focus on many technical aspects of helping clients navigate their paths into wealth. NCAA rules enabling athletes to earn money on their “name, image and likeness” created an additional area where young people can benefit from
“Now that whole family is depending on this person for their financial means, and that can be a lot of pressure,” Johnson said, noting that he has even seen cases of extortion by complete strangers. “It’s not to say that those things don't happen to other high net worth clients, it's just that it tends to happen to athletes and entertainers more.”
