When Is Enough, Enough?
Is there a point at which we won’t hear so much about athletes being the victims of financial fraud?
For years, it seems the spotlight has been inexorably drawn to athletes (as opposed to Joe Blow consumer) that have been prey to bad financial advice. We’ve all read the stories of grand fraud perpetrated under the guise of “financial advice”. I wonder just how de-sensitized have we become to this phenomenon. Just recently, 60 Minutes aired yet another example of fraudulent behavior that cost athletes $43 million (of which in all likelihood, there will be little to no recovery). Couldn’t the major sports organizations create higher barriers of entry to current and “would-be” financial advisors wanting access to their players? I think having not done so at this point sends a certain message. (I’ll leave that message up to your own imagination.) It has been estimated that just since the NFLPA’s financial advisor program launched in 2002, athletes receiving advice from advisors approved by the program have lost $150 million. Obviously, there are a lot of ways to attack this problem and it may indeed start with better athlete education. If so, maybe it is incumbent on organizations like the NCAA to get more involved since the large majority of athletes have to spend some time in an undergraduate classroom before their pro career. How about making a personal budgeting and financial literacy class mandatory in order to continue NCAA eligibility? Oh, I’m sure it would get a lot of pushback, but after all, we are asking them to look beyond the next 10 years to their “future” self. Sports leagues with formal programs like the NFLPA’s Financial Advisor program could radically help efforts by just requiring (or even engaging in) an annual audit of participating advisors (something similar to what FINRA or the SEC would conduct). We all know that the “Top Four” professional sports leagues have deep enough pockets to fund something like that.
Ultimately, it may have to begin with the athletes willing to speak up to allow change to occur. Considering the relatively short career of the average athlete, that time may need to come sooner than later. But then again, maybe no one really cares…