Down! Set! Advise!
I am not, nor have I ever been a professional athlete. I am not sure how or what I would have done had I been handed a multi-million dollar bonus check for making a decision to leave college early. I have no idea of the unique concerns, demands, or needs these individuals have – professionally, personally or financially. What I do love is the idea of helping people achieve their goals – whether I watch them on Sundays, see them round out their season in late October or just go to Church with them on Sundays. It makes me particularly frustrated when I hear about anyone having a poor outcome due to improper dealings. It is hard enough to achieve financial goals without the additional headwind of being concerned about the dealings of your advisor.
Then I came across an article that gives me a glimmer of hope. The article was on CNBC.com about the NFL’s 49ers and a robo-advisor firm, Wealthfront, striking a deal to help the team’s employees gain access to advice. The 49ers are paying the advisory fees on the first $100k of assets per individual, plus the team players, employees and alumni will also gain access to Wealthfront’s seminars. This is the kind of stuff that makes me proud to help and serve in an industry that literally helps people achieve their personal lifestyle goals.
We watch the players every weekend during the season. Many of these players will arrive in some form of a professional league as 16-24-year-old rookies depending on the sport and minor league options. Very few will get the huge immediate windfall type contracts that the top overall picks receive. Even fewer will have the type of long, productive and lucrative careers that they all dream about. Many athletes will go straight from high school, some will skip high school. Some will sign a low-end deal and never even touch the grass on the field on which they had hoped to excel on. On average an NFL player will have a career of just 3.3 years. For the NBA it is about 4.8 years, and the MLB is 5.6 years. Just a guess, but I would assume that very few players think about this when they enter the professional ranks.
I think this 49er-Wealthfront agreement is a wonderful “first down” but it should be viewed solely as that – a good first down gain. It increases the opportunity for education, it hopefully helps to set an appropriate asset allocation model, and possibly set a plan or goals to track progress towards. My concern is this: how does this advice model continue to evolve? Most individuals I know will not be involved in professional sports. So I am particularly interested in how the advice model might also evolve for doctors, lawyers, business owners and a slew of other societal professionals we interact with every day. All these groups have very unique needs that I am not sure the robo-advisor algorithms are prepared to deal with.
Finding the education and support that this deal is providing is essential and I applaud the 49ers for making a bold step to help their employees in this regard. I hope that when asset allocation and basic education aren’t enough that either the robo-advisor field evolves or it helps to provide professionals direction to find advisors that help with their specific professional path.
The clock is running, onto second down.
Patrick Flaherty, CIPM, is the Product Owner for CORE Performance and Integrations as well as the GM of Fee Manager. In addition to shaping the strategic direction and development of both products, Patrick is responsible for overseeing the operations of the Fee Manager business unit including developing and maintaining client and partner relationships. In 2011, he completed the requisite study and exams for the certificate in investment performance measurement (CIPM).