NIL Series: Choosing a Financial Advisor | Zach Miller, Sam Acho, Jeff Locke, Riccardo Stewart | NFL Players’ Podcast #15
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It is not a secret that NIL has made it possible for college athletes to make money before they get to the NFL. College collectives are paying hundreds of thousands of dollars up to millions of dollars to 18 to 22-year-olds.
However, how prepared are these players to receive this money and make the best decisions? For the first time, student-athletes are Paying taxes, opening bank accounts, establishing credit, making significant purchases etc.
This episode discusses the importance of choosing the right financial advisors.
For questions, you can reach out to Riccardo Stewart at +1 (602) 989-5022.
+ Read the Transcript
Riccardo Stewart (00:11): Hey, I want to welcome you guys back to another episode of the AWM NFL podcast. My name is Riccardo Stewart. I'm your host and I'm joined with my friends. I'm going to just do this, you know, because, you know, we're starting a little new series. And so just remind our listeners of who we are. I go by the name “Coach” because that's what I did. I've been coaching sports from youth football all the way up to division one, FPS, college football.
And then you see Jeff Locke here. He's a professor. And if you haven't heard from us yet, You wouldn't know this, but if you have, you would. Why he's a professor? Because he gives us answers. Speaking of answers, you always got to have the truth. And that's Zach Miller, because he was the truth on the field and he will definitely give you the truth off the field as it relates to your financial advice. And last, but definitely not least, you got the man himself, smile himself, the personality himself. He's the mayor and he's the mayor for obvious reasons. When a man walks around, everybody flocks. They want to shake his hand because he gets everybody's vote.
And so... Guys, we're gonna start something. We are now, you know, draft is over. We're in that kind of low where OTAs are starting, NFL starting to kick back up. But you also have spring football just ended and for college football. And you have a lot of guys who are getting particular draft grades going into this next year. ⁓ And with that comes all sorts of college athletes who were thinking about that next jump for next year's draft. And the midst of all of that, it has been the initials NIL.
And that's something we've talked about. People have talked about, people have talked about it in ways of changing the game and so forth. But I want to talk about it over the next couple of episodes as it relates to the athlete, the college athlete who is, who is thinking about going pro, who has received some money because of his or her name and image and likeness. And so what does that look like? And when it comes to needing people like us, like financial advisors. And so just kind of want to have a conversation about like - just financial advisors in general. But before we jump in, one, I wanna just kinda check in, kind of a, I used to call it a red dot moment, like when you're at Disneyland and you look at a map and it says you are here and there's a dot, like where are you at and kinda what's going on in your season of life, either as a family or as an advisor.
So Zach, I'm gonna start with you.
Zach Miller (02:25): I mean, personally, the kids are almost done with school. So looking forward to no sports during the summer. And then just, just with our rookies getting all our clients that are rookies, getting them to their new teams, contracts, tax implications, just all those things, having those discussions right now, planning for that upcoming season.
Riccardo Stewart (02:44): Good. Jeff, what's going down in LA?
Jeff Locke (02:47): Yeah, no kids to shuffle around right now, but just prepping for summer, looking forward to it a lot. ⁓ And on the client side, Zach's been doing a lot of that, what he just said. I've been helping a lot of our guys figure out where they're going to live, right? Either guys that are playing right now, thinking about their lease coming up being the new place for the year or our rookies figuring out for the first time, hey, what do I do in this brand new city?
Riccardo Stewart (03:11): Yeah, I mean, just to piggyback on that, I'm literally recording in a realtor office here in Salt Lake City. I'm here to meet with one of our clients and kind of help him along his ways. And so oddly enough, left Phoenix where it was about, well, what's the temperature right there now, Zach?
Zach Miller (03:28): It's about 85 degrees, I think.
Riccardo Stewart (03:31): 85 degrees and it's about 40 degrees with snow on the mountains here in Salt Lake City, which is insane What about you Sam? It seems like you're at home. You're not in Bristol or somewhere else. So I mean like what's what's going on in the actual life?
Sam Acho (03:45): Yeah, so I'm in Dallas, Texas right now. This is my ESPN home studio, my background, which is awesome, but was on, was doing some shows yesterday from home. And then before that was in Illinois, speaking to some athletic directors, talking about kind of the future of sport. So it was awesome. And so, yeah, that's where I'm at right now. I'm at home. I'm training with some guys who are current college players who this would relate to a lot. And also some guys who are current NFL players. So I've been out here in Dallas training with some of these guys, having great conversations, learning more about. ⁓ the struggles and issues that players are facing now and ways we can solve them.
Riccardo Stewart (04:18): Good. I mean, normally our audience is definitely NFL athletes. ⁓ And today it's the college athlete, coach, parent, everybody that's involved in the life of that student athlete who is, ⁓ you know, God willingly gonna make that jump. And when it comes to the ideal of advisors, ⁓ oftentimes we get thrown in with agents or even marketers and it's like, okay, that's a completely separate category. And so let me start first with all the three of you guys. I mean, all of us here have had financial advisors before. I'm gonna start first with you, ⁓ Sam. ⁓ When you were coming out of the University of Texas, how did you choose an advisor?
Sam Acho (4:49.334) Well, I didn't really know, I didn't think I needed an advisor. It's kind of the first start, because I'm thinking, okay, ⁓ I've taken a couple classes. I feel like I'm pretty good with money. I didn't know the benefit that an advisor would give me. Now, the way I ended up choosing one was that our starting quarterback, he was just, went to the NFL and he had an advisor. And so he's a guy who I knew, this quarterback is a guy who I trusted. I said, hey man, who's your advisor? And he told me this guy's name. This guy was at a company called UBS. And I said, okay, well, sounds good. I'm not sure how he's helping me, but okay. And so for the next two years -
I was quote unquote with this advisor, but I didn't invest any of my money because I just, I didn't see the need and the connect wasn't there. Finally, after my 30 year, a great friend of mine, still one of my best friends to this day introduced me to an actual advisor who really had this idea of, Hey, this is actually what it looks like to try to build wealth for the longterm. ⁓ Now, structurally didn't have the family office structure, but at least it was a good first step for me when I didn't really know a lot. And so - I started off by just asking a teammate. I went with his guy, though I didn't really know that guy or trust that guy. Then finally I found someone who was more of an expert in their field.
Riccardo Stewart (06:06): Good. And then so that was the how. Zach, why did you choose one? I mean, Sam said, I didn't think I needed one. Why did you choose one?
Zach Miller (06:13): I was a second round pick, so my dad said I needed to hire a financial advisor. ⁓ And so he took me down to the local Merrill Lynch, ⁓ talked to an older guy who talked about stocks and bonds and all that. And that was kind of how I picked my advisor. I relied a lot on my dad's advice, who, you know, in hindsight, like he didn't have any money. So like, I don't know ⁓ why I trusted his advice so much, but he was just trying to do the best he could to find someone to invest my money. Yeah. I mean -
(06:43): But like, you know, like me, I was 21 years old. I didn't know what I didn't know then. It was just a really complicated, like you want your money to grow. I understood savings generally, but I mean, the whole world of advisors was just so, it still is complex. And I didn't ⁓ know any better. I didn't know who I should hire. I didn't know who I should be looking for. I didn't know what questions I should be asking.
Riccardo Stewart (07:04): Yeah, well, Jeff, I mean, ⁓ like when? So like when did you choose an advisor? Is that something you waited later in your FRO career, early?
Jeff Locke (07:14): And when was, I think the second I saw more than 100 ,000 plus sitting in my checking account after I got drafted, signing bonus came in. I'm like, ⁓ I thought I knew what I was going to do with this, but I have no idea what I'm going to do with this. So I did the easiest thing, similar to Zach's story. I just used my parents' financial advisor for the first two years until I got a little bit more educated, did some internships, met some people. I'm like, ⁓ every advisor is actually not built the same.
And this one actually doesn't make sense for me being an NFL player and what I need. So then I changed and then I changed again later as I kept educating myself.
Riccardo Stewart (07:53): I grew up, one of my best friends, his dad was a financial advisor. ⁓ And I mean, I never really knew what he did, but I just knew like he was helping with retirement plans, which just seems so distant to me. And he was like, hey, one day you can come work for me. And I'm like, I don't know if I'm thinking about retirement plans. He would say that when I was 17, no idea. And you know what? Most of the guys we talked to, they have no idea. ⁓ Even when we talked to parents, they're like, I don't even know if this is enough money. Should they have an advisor?
And there's this whole world out there of advisors. Jeff, just like in general, like how many advisors are there?
Jeff Locke (08:33): It depends who you ask. The number we typically see is about 300 ,000 advisors in the US, but if you count it in a different way, it's up to 700 ,000 advisors in the US. ⁓ So yeah, it's a lot, a lot of people that work in our industry and can legally call themselves a financial advisor, which is actually unfortunately a very low bar for what you actually have to do to call yourself a financial advisor.
Riccardo Stewart (08:59): Okay, and so if I'm a college student, I mean, here's what we get, and it comes, okay, is there any difference? Like, what's the difference between the guy down the street, the lady over here, the people over here, the ones that I see on commercials, or when I fly into certain cities, I see these particular major companies to the guy down, I mean, like, Zach, are there any difference?
Zach Miller (09:21): The biggest thing is what are you trusting them to do? ⁓ And real financial advice is not just investment advice. It's everything money touches. And so literally wrote a blog on this. We'll include it in the show notes, ⁓ but everyone, you know, thinks a financial advisor can be lumped into just a single bucket, but the biggest thing that they can do for you, especially, and this is, this does not apply to everyone. ⁓ It's integrating the tax planning and tax. minimization into your financial plan, into your investment strategy saves, can save millions of dollars for NFL players. And it's, you know, it's why we've talked about it before. I've paid 2 million more than I should have just because a real financial advisor advises on things that are more than just investments.
Think down the line of state planning, think looking at your insurance, making sure disability, life insurance, all those things. There's so much more to just. financial planning and then just the investment side. The investment side, you want that that has to be on its game and you want it to be really good, but you want essentially advice on everything money touches so that you have the best chance of success with your money.
Sam Acho (10:30): And I love that point. If I cannot hop in coach, well, because you talked about it, you said NFL players specifically like, okay, tax taxes matter because you're in the highest tax bracket. Like not everyone's in the highest tax bracket. I think 80 % of people are paying 15 % or lower in taxes. So if you're in that highest tax bracket, that could be between 40 and 50 % in taxes. And so all of a sudden taxes matter way more than the general public. And so that's why it's so important to have.
(10:50): your taxes integrated with your financial advice, not just investment advice, but how do we mitigate that number one destroyer of wealth?
Riccardo Stewart (11:08): I mean, just realistically, the guys who we work with that are current ⁓ student athletes in college, many of them already are in the highest tax bracket. We have guys who are getting NIL deals where they're bringing in 100, 150 a year, all the way up to seven figure deals. And it matters. And it matters earlier than what you guys were talking about. Well, coming out of college, I saw $100 ,000. No, in college, I'm seeing $100 ,000. Now, we all know that that was happening before, but not at Arizona State.
not at UCLA, ⁓ maybe at Texas, but I mean, like now that it's legal, you know? So Zach, I do gotta go back to you and then I'm gonna hit up the professor. And that is, you said, okay, investments, they're important. And we use the language of going, like, it's massively important when it comes to your financial structure, but it's like the engine to a car. If you have the engine there, that's great, but if you don't have all the necessary things, that car doesn't go anywhere. So Zach, if I'm only choosing an advisor and I'm focusing just only on investments,
Zach Miller (12:09): Yeah, you'll just end up paying more in taxes. You'll get exposed to higher liability and then you, you're going to get worse returns, especially when you pick like a place like I did where you're in a cookie cutter portfolio. And when I say cookie cutter investments, they basically say like, if you ever heard 60, 40, 70, 30, 80, 20, and then they're, they're not foodie Sherry's and all that is, is are they required by law to do what's in your best interest? No matter what –
Meaning they can't put their own profits or their own interest of the advisor, which happens all the time and on wall street, the wall street firms are notorious for this. They get sued all the time by clients. And it's just something that people don't pay attention to because it's very, I mean, it's only people like us know about it.
Riccardo Stewart (12:55): All right, you said 60-40, you said fiduciary. I'm gonna pause on that because we're gonna come back, but I gotta ask Jeff this, like what sort of expectation should I even have for my advisor? Let's just be realistic. Like I'm a kid, I'm at the university, no, I'm at Arizona State University. I got $200 ,000 ⁓ a year coming my way and I wanna hire an advisor because I think I should. What should my expectation be of him or her or them?
Jeff Locke (13:21): Zach and Sam really touched on this and I'll go back in time a little bit to answer this is that our industry started by essentially ⁓ You give me money. I put it in an account and then I just trade stocks, right? And that's what it was. That's just investment management that's pretty much how you define it and Most of our industry is still built on only doing that which is just you give me money. I manage it I return you more money in the end your advisor these days needs to be doing everything for you that has to do with your money. Anything it touches, right? Talking about insurance, you're talking about paying certain types of bills, you're talking about working with certain types of agents.
Like literally anything you can think of, they should be who you pick up the phone and call and they should be able to give you advice. And you're going to know you don't have the right advisor when they come back at you and say, hey, I actually can't talk to you about that sort of thing because X, Y, and Z. That's like red flag number one that, hey, maybe I don't have the type of person - that I'm supposed to have as an advisor.
Riccardo Stewart (14:21): Yeah, so Zach, let's go back to it. And you know what, Jeff, Sam, you guys can jump in as well. ⁓ You use the term 60 -40. Those are just a cookie cutter thing, like 60 % in stocks or 40 % in bonds.
But the word I really wanted to get into was the word fiduciary, because that's not a word that you walk around a college campus like, yo, is he a fiduciary? Nah, I don't think he a fiduciary, my dude. Like that's not common language. And so ⁓ there's fiduciary and then there's suitability. ⁓ Zach, explain the differences. when it comes to choosing advisor and why it's important.
Zach Miller (14:53): Yeah, I mean, I think the biggest thing, if you look at an attorney relationship, if you sign a contract with an attorney to represent you or your agent, they have a fiduciary duty to you, meaning they have to do what's in your best interest. For some reason, financial advisors at certain places have a suitability standard, which just means any investment they put in your portfolio just has to be suitable for your age. ⁓ investment horizon, that type of thing. So it's a, it's a much lesser standard. So I mean, if you're demanding the best from your team, why would you ever accept a suitability standard versus the better higher standard of a foodie Shiri?
Riccardo Stewart (15:31): Good. Jeff, Sam, would you guys have anything you guys would add to that?
Sam Acho (15:32): The only thing I would add to that is ⁓ sometimes I know we've worked with a lot of NFL players, but also sometimes we talk to college players as well. Like this podcast, this episode is geared more toward college. Sometimes we don't realize our value. I mean, you're saying, okay, well I only have a hundred thousand dollars or it's only 200 or only 400 ,000 or some people may have a million, but I'm going to go get 20 or 30 in the NFL. Like the fact that you're 19 years old ⁓ and you have a hundred thousand or 200 or 250 or whatever. I mean, that money can grow and grow and grow. A lot of people, most people may not get that number until they're 35 and 40. Now, all of a sudden, you've got 20 years of not only sound investment advice, but also you have early stages of tax savings, early stages of finding ways to have the right money and the right accounts or even the right tax savings where it can grow even more.
And so to the people out there, sometimes parents out there that are like, man, well, when he really makes it big, then I'll get an advisor. That's when it'll be necessary. I would just... I would just temper that mindset and say, well, it's actually necessary now based off of your age and your opportunity and the horizon that's ahead of you. And so finding the right team, not just who everyone else goes with, right? That's, I know a bunch of guys, well, this guy went with him, so I'll go with him. That's not always the best mentality. Sometimes that term is called hurting, just following the herd. And I think the best in class don't always follow the herd. You find what works for you and also what works best.
Riccardo Stewart (16:59): Jeff?
Jeff Locke (17:01): We summed it up pretty good. ⁓ I'm gonna let Sam end that episode right there.
Riccardo Stewart (17:05): That's good. Well, I encourage the parents listening to this, ⁓ join in with your, with your, your, your child or your children that are part of this and ask questions and, and make sure that whoever it is that you're meeting with, ⁓ that they have certain things like designations. Those are usually the letters that, that come after the names, ⁓ make sure that they're licensed and also, you know, ask questions about fiduciary and make sure there are people that are going to educate you, but even more importantly, educate your child. And so,
We got another episode and we're gonna talk about what do we do once we get this money as a college student? Like what's wise? What kind of bank do I choose? Do I need insurance? Like what just happened to my world? And so as always, if you guys have a question, you guys want the resources that Zach talked about that we'll give you, the blog that he wrote, please feel free to shoot me a text. It's 602-989-5022. Again, that's 602-989-5022.