How should advisors coach athlete clients through investment decisions?
“Compared to ordinary investors, athletes are often more likely to say ‘let’s ride it.’ And when the choices they make aren’t great, they want to double down,” Bighil says. “But they do not realize how long it may take for the cycle to turn to reap the benefits of the doubling down decision on their investments. There are times when it makes sense, but it may not be a normal response.”
To help his athlete clients, Bighil walks them through a core-and-explore model of investing. To meet his goals over a longer-term horizon — buying a home, for example — he encourages clients to establish a core portfolio that is diversified and stable, with no high exposure to market volatility. Ho. Based on the athlete’s current financial status, he recommends an exploratory investment portfolio that can be used for individual stock positions, or exposure to technology stocks, small-caps, alternative strategies and other bold sectors of the market. funds may be used.
“It helps them focus and remember some of the learning that I try to bring up. In a bucket, we have investments for the things we need to accomplish and protect,” Bighil says. “Yes, we can have some fun, but we’re limited to a certain percentage of that asset.” Have to put in what we are willing to do that work.”
When it comes to other counselors helping athlete clients, Bighil says it’s important to understand their high-risk psychology. He says that perhaps the best way to bring him back from that bias is to appeal to his goal-oriented mindset; Find out what specific goals they want to achieve, and build portfolios that speak to them.
And because athletes will receive more than their fair share of investment offerings, he says advisors should be prepared to take on the responsibility of assessing and getting on board with those ideas as their clients consider taking those types of opportunities. .
