They say in the blogging game, three data points make a trend worth writing about. Then again, that may be too conservative since two points are sufficient to draw a line. Speaking of trends, there have been (at least) three stories that talk about former professional athletes who are now managing money for other athletes.
These stories include the news that former NBA great Tony Parker is joining NorthRock Partners LLC to head up its sports, artists and entertainment practice. It includes this Indianapolis Star story about former NBA player Troy Murphy setting up shop as Sweven Wealth Advisors to serve the suddenly wealthy while donating his fees for financial literacy education. The third story in the New York Times about money manager Joe McLean’s unique practice serving athletes, including many current NBA players.
Net-net, I would argue this trend is a good thing. There are far too many stories of professional athletes getting taken advantage by those people who were supposed to be looking out for their best interests. Here’s hoping these practices do a much better job of helping these athletes as they navigate their high stress, high reward lives.
The wealth management business is a highly personal one. To do a good job for you, your financial advisor needs to know pretty much everything about your financial life. By extension, that includes a lot about your personal life as well. The type of things we typically don’t talk about with other people.
So you can see why a professional athlete would feel comfortable working with someone who has already walked in their shoes. They already know the milieu in which an athlete operates and the mindset they need to succeed professionally. In this light, financial advisors are at their best when they bring their whole essence to the job.
You can probably think of any number of life experiences where having lived through them or dealt with them, it could be an asset for a financial advisor working with clients in the same boat. This may include someone who has experienced a divorce. This may include someone who knows the challenges of caring for a family member with special needs. That may simply mean by being a woman they have experienced discrimination.
This is why the wealth management industry needs to embrace diversity in all its forms.* More women, more people of color, more former professional athletes, more people who have simply lived a life. We need financial advisors who have already reckoned with some of the big money issues in their own lives.
We are more than the sum total of our life experiences or characteristics. Clients are all unique. Clients of financial advisors need their unique natures to be recognized and taken into account. Clients are not simply the numbers that appear on a spreadsheet, balance sheet or account statement. As my colleague Tony Isola writes:
The optimum portfolio mix is one that creates maximum life fulfillment. The real purpose of the decade’s long quest for wealth accumulation…Making a financial plan is so much more than numbers on a spreadsheet.
This can only occur by an advisor asking a client open-ended questions and allowing the client to answer them fully and honestly. This is where having similar life experiences really comes into play. A former NBA player can’t simply by osmosis understand another pro athlete, but they can ask the right questions. Questions that another person may not have thought to ask in the first place.
There are ways for advisors to better understand specific life experiences. There are no shortage of courses and designations that can help accelerate this process. There are programs for divorce financial planning and special needs planning. A good advisor over time builds up a certain muscle memory and pattern recognition as they work with different types of clients and their unique needs.
The vast majority of wealth management clients won’t have played in the NBA or NFL. In theory, a well-trained financial advisor should be able to work with any type of client. That is, of course, naive. There are however any number of reasons why any particular client and advisor may not be a match. It is naive to think that every potential pairing would work out.
Finding productive matches between clients and advisors is an important goal. Which is one reason why steps to broaden the talent pool of financial advisors is a positive development for everyone involved. The best, most productive relationships between a client and an advisor represent an ongoing dialogue. It starts with open-ended questions, informed by experience and tempered with empathy. The types of things you cannot learn solely from a book.