Skyrocketing salaries for top athletes and lucrative deals for college players have touched off a new gold rush among wealth management firms.
Juan Soto’s $765 million contract with Major League Baseball’s 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’s sports on the rise, the population and wealth of pro athletes has made sports a key driver of growth in wealth management.
“The numbers have gone through the roof,” said Molly Cloud, financial advisor and director of sports and entertainment at Morgan Stanley. “There is so much money that wasn’t around 10 years ago. It makes our job more complicated and exciting to be part of that growth.”
From longtime leaders in the space such as Morgan Stanley, Bernstein, UBS and Goldman Sachs, 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.
James Beale, a former hockey player, is now development director for Rockefeller Capital Management’s Rockefeller Global Family Office and oversees the Sports and Entertainment group. Beale said that while athletes aren’t all that different from other high net worth clients, having experience as a former athlete helps.
“I’ve seen a lot of friends in [sports] who maybe didn’t 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,” Beale said.
Beale said athletes, similar to other high net worth clients, often spend most of their time on their business or career and don’t have much bandwidth for investing.
“They put 99% of their time into taking care of their body, managing their health and training,” Beale said. “It’s very similar to an entrepreneur who’s 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.”
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.
“They are earning more at a younger age than they ever will during the rest of their life,” said Stacie Jacobsen, national director for client engagement and co-lead of the sports, media and entertainment group for Bernstein Private Wealth Management. “Their relationship with money is almost unique to almost anyone else we work with.”