When it comes to hiring a professional team to support athletes, knowing who to hire for what job is key. Hiring the wrong team or choosing to forgo diversification can either make or break your career. The two key services in which athletes would do well to separate are their agents and financial advisors.
Athletes new to finding professional representation may think that a one-stop-shop makes the most sense. In other words, having your agent also handle your finances might seem like a logical decision, as you already trust them to handle your business decisions. However, this is a huge mistake.
Your agent and your financial team should always be separate. Far too often you hear of athletes going bankrupt early in their careers, and it is because many believe in the misleading ease of these all-in-one agencies, trying to handle everything from contract negotiations, to marketing, to legal advisement, to business and wealth management, etc. But, it is very rarely possible, nearly impossible, for a single representative to objectively provide their attention to all of these areas, as each is an incredibly complex field that requires specialized experience and skill.
More than a question of objectivity and experience, or perhaps a lack thereof, it is ill advised to employ a one-stop-shop simply because it is a question of there being a serious conflict of interest. You could never really be certain that those services being provided are because they are in your best interest as a professional athlete or in the company’s best interest. An all-in-one will ultimately be thinking about their bottom line and how to put more money in their own pockets, not yours.
By separating your brand, or business, from your finances, you can build a safety net of un-biased assets. Hire an agent, and hire a team of financial advisors. It’s that simple.
Your agent will handle your brand and business. They help athletes network, negotiate salary, secure contracts on and off the field, and so much more. A good agent will do everything in his or her power to ensure that you are fairly and appropriately compensated for your talent. As one might imagine, it takes a great deal of skill and expertise in their field to be a successful sports agent.
An agent’s specific skillset, however, is also why it is necessary to hire a separate team of financial advisors. Their interest is in negotiating and securing the gross bottom line. Once that is complete, their job and personal investment in you (at least for that particular acquisition) is done. The agent’s job is simply to secure opportunity. After that, it is out of their hands.
This is where hiring financial advisors comes in. Once opportunities and a gross amount have been acquired by the agent, an athlete’s interest is in the net amount; that which a CPA or CFP can secure for the athlete. From here, it is in the best interest of your financial advisors to ensure that you not only keep the money that you’ve earned, but help it securely grow as well.
It should be fairly evident, at this point, that it is in any professional athlete’s best interest to hire teams of independent experts. You want separate companies with separate responsibilities, each specializing in their specific fields. No one person, company or organization should have absolute control over any athlete and their decisions. Separating professional services is the only real way to ensure that you are receiving the best and most objective advice that only serves your interest, not someone else’s bottom line.
At Millennium Sports Management Group, we have a strong network of industry professionals, and we would be happy to refer you to the service provider that will offer superior support that you can trust. Contact us to learn more.