Financial Planning for Professional Athletes

Financial planning for professional athletes is a complex niche market that requires the right financial advisor.

Working with an athlete is one of the most sought after niche markets for financial professionals.  The prestige of working with some of the most revered people in the world often distracts advisors from the complexities that arise from working with a professional athlete.

Sports stars often have high earning potential, but this is challenged by limited career length, high end lifestyles, tax challenges, and a lack of financial education.  Making the right decisions when working with a professional athlete requires a unique skill set that only a few specialists possess.

The Numbers

Talented athletes are capable of earning high value contracts and accumulating wealth early in life.  However, many players fail to plan for the future.  Without the proper guidance from a financial professional many athletes are destined for serious financial problems.

According to Sports Illustrated, 78% of NFL players face bankruptcy or significant financial stress within two years of retiring.  Additionally, 60% of NBA players face similar problems within five years of retirement.  Some notable athletes who went broke include:

  • Johnny Unitas – NFL
  • Scottie Pippen – NBA
  • Diego Maradona – FIFA
  • Curt Schilling – MLB
  • Allen Iverson – NBA
  • Lawrence Taylor – NFL
  • Michael Vick – NFL
  • Mike Tyson – WBC, WBA, IBF

Very few athletes are prepared to understand the complexities involved with their financial planning.  Athletes are not trained to understand budgeting, taxation, and long term financial planning.  Organizations like the NFLPA have attempted to help players improve their financial literacy, but this is a poor substitute compared to hiring a competent financial advisor.


Professional athletes have trained their whole lives to master a sport.  However, few athletes have taken the time to master their finances.  Financial education is often a difficult concept to comprehend for athletes.

After signing a multi-million dollar contract it’s easy to overlook future financial problems.  Many athletes are unprepared for the sudden change in lifestyle that accompanies moving from playing at the college to the professional level.

Many athletes make the mistake of letting family and friends manage their money.  These individuals may be in a position of trust, but often lack the financial literacy that is required to manage an athlete’s finances.

Advisors must help educate athletes on how to manage their finances, and at the very least stick to a budget.  Working with an athlete during the off season is often the best bet, because athletes are less distracted.


Establishing a financial plan with a fixed budget is one of the most important services an advisor can provide.

Many athlete fall victim to peer pressure and societies standards for lifestyle expectations.  Athletes face daily pressure from their peers to live a luxurious lifestyle.  However, this lifestyle is often unsustainable without proper budgeting.

Advisors must draft a budget that allows for some luxury, but also invests money for the athlete’s future.  An athlete’s greatest enemy is himself or herself.  Advisors must protect their athlete clients from themselves by creating a strict budget and enforcing it.

Goal Setting

The right financial advisor will work with an athlete to set both short and long term goals.  Athletes strive to achieve various goals throughout their professional career.  Setting goals is an excellent way to keep athletes on track.

Establishing realistic and achievable goals can motivate an athlete and help them focus on the long term bigger picture.  The right advisor can develop and implement goals that athletes can relate to.


We live in a society where sports stars are stereotyped by living over-the-top lifestyles, complete with mansions, expensive cars, bottle service, limousines, and endless supplies of cash.  However, professional athlete tend to have short careers, and without the right financial planning that money will dry up faster than they think.

Many advisors are recommended to act as gatekeepers for their sports clients.  A gatekeepers is someone who acts as the person between two people.  When it comes to athletes, a gatekeeper is a financial advisor that protects athlete client from people trying to get a hold on the athlete’s money.

However, gatekeeping is extremely ineffective when it comes to advising athletes.  It is impossible to monitor athletes at all times, and they will inevitably ask to give their money to friends and family.

The right advisor doesn’t act as a gatekeeper they act as a coach.  Many athletes report that the biggest influencer in their life was a high school or college coach.  These individuals mentored them and provided them with structure and discipline.  When working with athletes, coaching is more important than gatekeeping.  The right financial advisor is an influencer in the lives of their clients.

Be Professional

Maintaining a sense of objectivity and professionalism as an advisor may prove to be difficult when working with a famous athlete.  It is easy to become star struck when working with one of your favorite athletes.  However, in order to act in your client’s best interests you must distance yourself as a fan.

When working with a professional athlete you must protect their finances not only from outside forces, but the athlete themselves.  Saying “no” to a client is never easy; especially when this person is a public figure, like an athlete.  Nevertheless, you must be willing to distance yourself and stand firm on your objective opinion when it comes to their financial planning.

Avoid Flash, Invest the Cash

Peer pressure and societal expectations can be detrimental to an athlete’s retirement plan.  Athletes are expected to live a luxurious and flashy lifestyle.  Paying for bottle service and buying jewelry may make you feel good in the short term, but this lifestyle can have negative long-term effects.

Athletes have a short career span to accumulate and maintain wealth.  It is essential for athletes to invest in their retirement at an early age.  Financial advisors must encourage their clients to avoid flash and invest their cash.  Financial planning software are great tools to show athletes the effects of investing early for their retirement.

After Retirement

Career Span

The career span of a professional athlete is extremely short.  Many people believe that athletes are capable of playing well into their thirties or forties such as:  Brett Favre, Ray Allen, Derek Jeter, and Jaromir Jágr.  However, these athletes are outliers who played their respective sports well beyond the average career span.  The average career length of the top professional sports in the United States are:

  • NFL: 5 years
  • NBA: 8 years
  • MLB: 6 years
  • NHL: 5 years

New Careers

Due to the chance of injuries and competitive nature of professional sports many athletes retire at a young age.  After retirement, athletes must decide if they can live off their accumulated wealth, or start a new career.

Life after sports can be challenging for athletes.  Skills learned on a football field or basketball court don’t always translate to other professions.

Some of the more talented and well-spoken athletes may choose to move into careers such as broadcasting, reporting, and acting.  Other athletes must attempt to utilize degrees that they earned in college, but have never used in the work force.  Advisors must help their sport star clients plan for the possibility of a new career after retiring from professional sports.

Working with Professional Athletes

Professional athletes require the right financial advisor to help them navigate through the financial complexities they will face.  Athletes need someone who they can trust to provide financial advice.  Financial planning aid is desperately needed by professional athletes, which presents an excellent opportunity to advisors with the right skills.


Right Financial Advisor’s Nick Bredow, contributed this report.


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