I saw disturbing news recently regarding Clinton Portis, who played nine years in the National Football League and earned approximately $43.1 million during that time.
However, Portis has none of those millions left. He discovered too late that the money he thought was being managed and set aside for his future was pilfered by his financial management team on risky investments and schemes. He sought revenge, but fortunately didn’t go through with his plan.
It’s not a new story. Other athletes have found themselves broke after successful careers – left with nothing but a number on a jersey.
How does this happen?
Many times, African-American athletes have little or no knowledge, experience or exposure to financial planning or management before entering the pros.
At the start of their careers, they are swarmed by “financial experts.” Sometimes they are introduced to them through their signing organization or management team. So perhaps out of fear or pressure, they go along with the package provided, never knowing how to vet these “experts” or realizing they have the ultimate control of their finances.
In Portis’ case and some others, he was allowed just enough money to keep him distracted, buying all his “wants” – cars, houses, clothes, jewelry, etc. – while the unscrupulous financial managers were draining money into frivolous and failing ventures without his knowledge.
Often, athletes are also discouraged from investing in their own communities – the ones that supported and nurtured their early talent – by these firms.
What can be done?
First, our student-athletes and parents must know and understand what to look for in an investment or wealth manager well before they sign a pro contract. They must interview several professionals and understand their investment philosophies.
Second, the management organizations should take some responsibility and expand the diversity of the firms in their presentations. Some pro organizations offer no opportunities for African-American investment firms to provide presentations or information to young athletes.
As a registered investment advisor, protecting my client’s interests is first and foremost. I can’t imagine how someone who fashions themselves as a wealth or financial manager would allow their client to travel the road to financial ruin.
The reckless disregard for these athletes’ futures is deplorable. It’s economic oppression on a very specific and targeted segment of people. And it continues to happen.
Sharon Mallory is CEO of SDM Investments LLC, a registered investment advisory firm in Chicago, and the author of “Drama, Dollars, and Dreams: A Diva’s Guide to Financial Management.”