Athlete CEO: Sports Agents & Financial Advisors | Zach Miller, Sam Acho, Jeff Locke, Riccardo Stewart | NFL Players’ Podcast #23
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NFL players have the unique opportunity to become more than players but Athlete CEO. Sitting at the top of their family business they make important decisions about generating and stewarding their talent and wealth. Assembling a team of qualified individuals can be difficult for athletes.
In this podcast, the NFL AWM team discusses the differences between two important parts of your team, Agents and 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 have the privilege of being your host and I'm joined by Sam Acho, Jeff Locke and Zach Miller, my coworkers and my friends. And so we are starting a new podcast. And one of the things we like to talk about, excuse me, a new series in our podcast.
One of the things we like to talk about is the athlete as the CEO. And it's sometimes difficult because these athletes are young when they get drafted to the NFL, they're 20, 21, 23, 25, whatever, but trying to get them to think of like their own family business. And so if it's Acho, it is the Acho family business where he sits at the top as the CEO. And if when you're the CEO, you got to think about how do I build the team? And so we're going to talk about what's the team that you need to be able to build a successful business.
And today, primarily talking about the difference between choosing an agent and choosing an advisor, because sometimes those things get lumped in together. So just a funny story. So I have a friend who I went to college with, I lived with, we played with in college, and his name's RJ. And RJ has two sons who are the same age as my two sons. And he's also African -American, looks a lot like me, just not nearly as handsome. But we find this a lot over the last pride decade. is people will come to me and be having a conversation and then realizing, like, I realize they think I'm RJ. And I'm like, it bothers us to no end, because I'm like, one, I don't really think we look alike.
And you know what? We're just two different human beings. And it's hilarious. And I say that because that happens with all of us. All of us have been in meetings where we're talking to someone who's entering the NFL draft. And it's usually the younger guys who are entering the NFL draft. And maybe 10 minutes into the conversation, maybe even 20, you begin to realize they think we're sports agents and not financial advisors. And you've got to be able to separate the two. And so it's always a funny deal. And so like, Sam, you've chosen an agent. You've had a couple of agents in your playing career and even your sports broadcasting career. You've had advisors. What would you say are the similarities?
Sam Acho (02:23): The similarities between agents and advisors. And I've hired my fair share of agents and fired my fair share of agents, hired my fair share of advisors, fired my fair share of advisors. I think the similarity is that they should be on your side or on your team, if you will. I think about the fact that, okay, if you're my agent, let's say for football or even for speaking that I have, or maybe for books, right? You are my representative.
So you should have my best interests in mind. So I have a broadcast agent, you should have my best interest in mind, my football agent, best interest in mind. If it's not the best for me, I don't want any part of it. The same thing should hold true for an advisor. Hey, if you're my advisor, you should have my best interest in mind. Now we've come to learn that that's not always the case, but that's what should be similar when it comes to agents and advisors, this idea of you represent me and you have to have my best interest in mind.
Riccardo Stewart (03:15): Okay, so I'm gonna come to you now, Zach. So it's hard, right? These kids, these players, they're coming out of college and they're choosing an agent and an advisor. How do most guys go about choosing their advisor realistically? And then now on the other side of it, how would you give advice to them?
Zach Miller (03:35): Yeah, I mean, I just look at my own situation. I was 21 when I was trying to hire both. So that's tapping happening even earlier now with NIL guys are getting recruited. I mean, when they're in high school or right when they get to college and so they're having to pick an agent, they're having to pick a financial advisor and it's very tough if you don't, I mean, if you don't come from a business world or, or even know what kind of the right questions to be asking. So, I mean, a lot of times young players, they rely on either who they know really well or parents to kind of come in and help. I know I did. And so you kind of do the best you can. You know, knowing what I know now, it really comes down to doing your research. It's with everything like do your research on who they represent. What contracts have they done? Like, are they really bringing in the marketing deals they say?
A lot of at least NFL agents really make all their money from the contract part of it, not necessarily the marketing part. So a lot of times you'll see NFL guys hire a separate marketing guy versus a contract attorney. So there's a lot to know in the world. And then it's the same with a, with an advisor. There's so many different types of advisors and we've covered some of the questions and in other podcasts on which questions you should be asking. But I wish I had that kind of list of questions to ask when I was picking my advisor.
Riccardo Stewart (04:56): Yeah, yeah. So Jeff, as a high net worth professional athlete, and it comes to choosing an advisor, choosing an agent to build their team, one, just to differentiate between the two, the agent and the advisor. Can you give us like brief job descriptions or descriptions of the two?
Jeff Locke (05:20): Yeah, I'll start with the agent. So when you think about the agent, the agent's job is to negotiate your contract either off the field or also off the field endorsement income. Some agencies also do what we call kind of extra stuff. That's pretty cool. They'll help with draft training. They might offer other types of services. In our language that we use, they really help you maximize your physical capital while you're playing. So we think about agents. Advisors then should be taking over to help with everything else once the contract is signed and the money starts touching your account and they should be doing everything that your money touches, helping with anything your money touches.
We're talking setting up accounts, your investments, your taxes, your insurance, credit cards, LLC, trusts, all the things that might impact you and all the planning around that. So they work as a team sometimes, but they do very different jobs.
Sam Acho (06:18): And if I could say one quick thing, Ricardo, I don't know why, but I was thinking about this the other day, maybe yesterday or the day before. I didn't know we were gonna talk about this on this podcast, but feel free to correct me if y 'all want to. But one way I would say is that a really good agent will help you make more money, but a really good advisor will help you keep it. So that's one way to think about it. Agents, if they're good, they can help you make money, but advisors will teach you how to keep that money. And so that's one distinguishing factor I would say.
Riccardo Stewart (06:41): Come on, come on, preach it, Sam.
Sam Acho (06:44): Yeah, man, I don't know, man. It's real though, because there's some amazing agents that we work with that even I know personally that I've worked with, had conversations and they're good ones. They'll help you make more money than you would have expected, right? The early is a rookie. It's a rookie contract. It's kind of locked in. It's all your physical capital. But second contract, boom, good agent.
But a good agent may not be able to. Usually they're not thinking of how do I help him keep the money that he has? That's where a good advisor comes in. They may not necessarily help you make it on the field per se. But they'll help you learn how to keep it. We talked about trust, talked about 401Ks, you talk about different ways to manage money. Good advisors help you keep the money that you make.
Riccardo Stewart (07:21): Yeah, I mean, that is 100%. Yeah, I'm glad you jumped in and said that, man. Appreciate you. All right, well, speaking of the agent and the advisor, because again, if you think about the picture here, it is the athlete who sits on the top. He or she is the CEO. We as advisors and agents, we work to serve you. And we got to keep that picture there. So underneath the athlete, Zach, what is the relationship, if any, between the agent
Jeff Locke (07:23): Yeah, I said it better than I did, Sam. I appreciate that. I appreciate that follow-up. That was great.
Zach Miller (07:45): I mean, it should be, it should be close that the agent and the advisor are both working to try to achieve a great outcome for the player and kind of different roles, but the coordination and just the kind of information I can relate to whether it's how to spread out the tax bill from a big contract or residency or signing bonus. A dollar today is worth more than a dollar tomorrow. All of those things getting more money upfront in a contract can help the player get more money in their pocket at the end of the day.
And so that relationship should be close. Communication, especially on any of the marketing, endorsement income, those type of things, you can do a lot of stuff with that as far as saving taxes. So it helps to know all that. And then it comes down to just making it easy on the player, that convenience. You're a top player. You deserve that convenience of having that coordination. If you're not getting it, you're just doing a bunch of extra work yourself.
Riccardo Stewart (08:53): Yeah. Okay. So Jeff, like just a sidebar on that one is what is the expectation of the relationship between the client and his or her agent and the relationship between the client and his or her advisor and primarily talking about like, what should they expect?
Jeff Locke (09:15): That's a great question. I'm going to go legal first, so stick with me for a second. And really, agents have what we call a fiduciary duty to a client. Fiduciary is just some fancy word, right, in legal terms. All it means is they must act in your best interest over other interests, including their own. So they're going to do what's best for you at all times as an agent. Financial advisors, some financial advisors are fiduciaries have that same responsibility as agents, but not all financial advisors have to abide by that high standard that agents do.
So an example could be if an advisor is not a fiduciary, they could actually recommend you buy a specific investment that pays them a higher commission or higher payout than some other investment that might not actually be in your best interest. And they wouldn't necessarily get in trouble for doing that if they're not a fiduciary, or if you are a fiduciary, you're going to run into some legal trouble making that same recommendation to a client.
Riccardo Stewart (10:18): So just to make sure we're clear here, because I heard you legally on the agent side, fiduciary, boom, all agents. But then you said from an advisor standpoint, some are fiduciaries, which is just that fancy word, what they got to do in your legally, they got to do what's in your best interest. Just from a percentage standpoint, not to quote you directly on it, but like in the realm of financial advisors, what percentage do you think are fiduciaries?
Jeff Locke (10:44): In the realm of all financial advisors, say just in the US, I'd say maybe 20 % max are actually fiduciary. Zach, would you say a different number or is that a ballpark? Yep.
Zach Miller (10:54): Oh, that sounds right. I mean, most work for the big Wall Street firms and that's what they think financial advice is. Just doing an investment portfolio, whereas your independent fiduciary advisors are going to be just a much smaller and less well -known part of the industry.
Riccardo Stewart (11:11): So basically you need to ask to your advisor, are you a fiduciary? And then we'll have a podcast on this. This is going to be another podcast to talk through about that. We talked about the compensation. So the relationship between the client and their advisor or agent. And then lastly, how are they compensated Sam? Like how is an agent make his money and how does an advisor make his or her money?
Sam Acho (11:33): Yeah, so agents make their money based off of a percentage of the money that the players made on the field and also off the field income. Maybe a different percentage. I know this because not only to had a couple agents, but also for four years as vice president NFL Player Association for 10 years was a part of the NFL PA as was Zach for several years, nearly a decade. And so we actually helped make some of these rules in the past. You could say it was 3%. Well, it's changed that you can negotiate that percentage.
The point is that agents get paid a percentage of the money that you make that contract that you signed, man, I signed 20 million or 50 million or 5 million agent gets a percentage of that then off the field income as well. Our man in appearance or marketing agent may get a different percentage. Maybe it's 15. Maybe it's 20 advisors on the other hand, get a percentage of the money that they manage usually write a fee, not a percentage, excuse me, a fee based off of the money that they manage or money that's invested. And so - that's kind of what you think about advisors versus agents. Agent, okay, man, the money that I make, my gross income, right, even before taxes. Whereas advisors, okay, it'll be a fee or a percentage based off of what the advisor actually manages. That's the difference.
Riccardo Stewart (12:45): Good. Guys, anything else that I'm missing in terms of the athlete CEO, agent, advisor, keeping those two separate. They're not the same, but once you hire them on your team, like they both should be serving you. And they should be serving in that fancy word that Jeff introduced us, fiduciary, in a way that actually puts your interest above all things. Anything else I'm missing, guys?
Zach Miller (13:12): I think the only thing I'll say is it does take that ownership mentality. It's very easy to say like, oh, you know, my guy has it, my guy has it, or like, I want to offload that responsibility. But the end of the day, if you want your money to last, you have to take that ownership on yourself. And it's so important that once you make those decisions, I mean, then you get to own it. Like for good or bad, you made that decision and not blame it on someone else.
Sam Acho (13:37): And one quick thing on that ownership mentality, you're paying these people, whether it's an agent or an advisor. And so they need to be accountable for whatever you're paying them for. I have a speaking agent, I have a broadcast agent, I have marketing agents, and I'm paying them a certain amount of money. And if I'm paying them this money, hey, I need you to actually be held to account on if you're doing your job or if you're not. And so that's the... that you can have as a player. We call it an athlete CEO saying OK, you're on my team or I'm paying you. Let's make sure you're doing your job and we're not just sitting here saying well, I think they're doing their job. No man, I pay you X amount. Let's let's have a meeting once a year twice a year three times. Whatever it is, let me see what you're doing that's providing all the value.
Riccardo Stewart (14:20): So whether you're a person that's entering the NFL draft, you're an NIL student athlete, you're a 14, 15, 10 -year vet in the NFL, these are questions that you should have. There should be questions you have for your agent, and there should be questions you should have for your advisor. We'd love to be able to share some of those questions with you, or if you have any questions that you've heard, or maybe even some thoughts that you have, we would love to hear from you. You can text us at 602-989-5022. Again, that's 602-989-5022.