From NIL deals to retirement at 35: JPMorgan aims to help athletes avoid bad money habits
NEW YORK– JPMorgan Chase announced Wednesday that it will begin creating wealth advisory services that will help athletes who make money through their talents make that money work for them for a long time.
The initiative is not only aimed at legendary ultra-rich athletes. The initiative is aimed at athletes in all sports, of all ages and income levels, from college athletes who are earning royalties on their name, image and likeness for the first time, to established athletes who have earned substantial sums but now plan to retire in their mid-30s and must make those sums last for decades.
JPMorgan hopes to reach these athletes early, perhaps as early as high school, but certainly on college campuses, hoping to teach them good financial habits from the start.
“They make a lot of money and they don’t know what to do with it,” said Megan Rapinoe, a professional soccer player and Olympic gold medalist.
JPMorgan is not doing this out of charity. The rare professional athletes who become millionaires can become millionaires many times over, and the biggest stars can become billionaires. Managing those funds through JPMorgan’s wealth management arm could result in multimillion-dollar fees for the bank, and the athletes’ notoriety could attract future clients to the bank.
There have been many stories of athletes facing financial difficulties despite having immense wealth during their careers. Academic research has shown that one in six NFL players will eventually declare bankruptcy within 12 years of retirement. Mike Tyson reportedly made half a billion during his boxing career but had to file for bankruptcy, and there are similar stories for legends like boxer Evander Holyfield and basketball player Antoine Walker.
The stories are often the same: athletes acquire immense wealth but don’t receive the education necessary to make it last as long as it takes.
Peloton instructor Ally Love said she often felt embarrassed or afraid to ask for financial advice, even after finding success with Peloton. She remembers one of her first encounters with a bank where her interactions with financial advisors left her with more questions than answers.
“I was like, ‘Who is Roy?’ I thought Roy was spelled with a Y,” Love said in an interview with The Associated Press. Only later did Love learn that “Roy” was not a person, but an abbreviation for return on investment, or ROI.
Love is one of nine athletes who will serve on JPMorgan’s new Athlete Council. The board also includes two-time NBA Hall of Famer Dwayne Wade of the Miami Heat, WNBA champion Sue Bird and legendary NFL quarterback Tom Brady. Other athletes and personalities include Jalen Brunson of the New York Knicks, World Cup champion Alex Morgan, Kayvon Thibodeaux of the New York Giants and four-time WNBA MVP winner A’Ja Wilson.
Love said she often felt like bankers were talking down to her and she felt intimidated.
“I sat there for many years and said ‘okay’ and ‘sure’, and I nodded my head a lot, but I wasn’t really informed, I wasn’t really educated and I was too nervous and too scared to ask for help.”
The Athlete Financial Health Initiative is the brainchild of Kristin Lemkau, CEO of JP Morgan Wealth Management. Lemkau invited Love to be part of the program after seeing each other at a US Open tennis match, and explained to Love that the banks were all about going after the biggest names in the business, but ignoring those who probably needed the help the most.
“There is an underserved segment of athletes, whether they are young and collegiate, professional or retired,” Lemkau said. “They’re all different. And most financial services companies go after the Ally Loves and the Tom Bradys and the Dwyane Wades, and 99.99 percent of athletes don’t fit into that space.”
Lemkau and Love joked that athletes, like anyone who suddenly becomes rich, will want to be able to spend their money on luxury goods. But once the handbags, jewelry and cars are purchased, it’s just as important for these athletes to be able to live off what they’ve earned for decades.
“Enjoy the fruit, but also let it last,” Love said.
