Kelton Corcoran is a senior content marketing specialist at NaviPlan, the financial planning technology provider of choice for more than 140,000 financial professionals.
Football and finance. What could these two possibly have in common?
Turns out, the two have been closely linked as of late, thanks in large part to HBO. The network’s hit show Ballers, which began airing its fourth season in August, revolves around two financial advisors managing the wealth of NFL players and other high-net-worth individuals.
Additionally, the financial world began buzzing after HBO’s training camp documentary series Hard Knocks featured a segment with a Cleveland Browns defensive lineman educating his fellow teammates about the power of compounding interest and smart spending.
While these shows may not present the entire picture, they help shed light on a few important lessons for HNW advisors to know about how some clients think and make financial decisions.
Knowing the score
Athletes are used to knowing the score and situation on the field, but not necessarily with their finances. In fact, Sports Illustrated reported that 78% of NFL players are either bankrupt or under serious financial stress within just two years after retirement.
Surprisingly enough, this issue extends past athletes to reach high-net-worth clients as well. A report by the Williams Group Wealth Consultancy notes that 70 percent of wealthy families lose their wealth by the second generation and up to 90 percent by the third generation.
A defense against this loss of wealth is by creating a holistic relationship with your client through transparency and frequent communication. As a fiduciary, advisors should be transparent in their advice and how a client’s spending habits may influence their future situations. Communicating with clients frequently ensures they have a grasp on their current financial standing. A client-facing tool, such as NaviPlan’s client portal, allows clients to check current goal progress and their financial outlook without setting up a meeting.
A unique aspect of Ballers is that main character and financial advisor, Spencer Strasmore, was recruited to work at the firm primarily because of his career in the NFL. The goal was to put the firm in a better position to secure athlete clients by leveraging his background and personality.
High-net-worth clients, athlete or not, have this insider mentality. One of the most common questions HNW prospects have is whether or not you have advised similar clients in the past. Consider collecting anonymous surveys from current satisfied clients on their experience with your firm, and share the findings with prospects to build trust.
Managing the Unpredictable
Playing in the NFL can be highly unpredictable, where an unforeseen trade or injury can change a career in an instant. Similarly, clients can experience surprises that have a serious impact on their financial well-being. While these situations can’t be entirely predicted, advisors can model certain scenarios with clients to help prepare.
Using NaviPlan’s scenario manager, advisors are able to adjust a wide range of variables to see how changes in a client’s situation may impact progress on financial goals. Whether it be adjusting retirement age, moving homes, or planning a large expense, this tool allows clients a real-time view of the results.
To learn more about NaviPlan and how it can cater to a wide-range of high-net-worth client needs, click here.