Late nights, last minute dinners, weekend meetings, events. That’s the life of financial advisers who work with professional athletes.
They know odd hours and flexibility are part of the job and are particularly important when managing million-dollar accounts for jocks who likely have less than a decade to capitalize on their earning power.
“That makes it challenging but fun at the same time,” said Andrew Kopjak, of Reckinger Loynes & Kopjak Group, a Laguna Hills advisory that’s part of Bank of America Corp.’s Merrill Lynch Wealth Management Group.
Financial advisers here represent professional surfers and players from the Los Angeles Angels of Anaheim and Anaheim Ducks, among others. But don’t ask for names—advisers say they’re bound by confidentiality agreements not to disclose their clients.
“You have to know the client inside and out,” said Luzanna Malec, a Newport Beach adviser who represents baseball players for Wells Fargo Advisors, the wealth management arm of San Francisco-based Wells Fargo & Co. “There has to be open communication.”
Malec, 55, said her clients think of her as a mother, rather than a financial adviser. She emphasizes the harsh truths of making bad investments and steers clients away from business pitches they hear on the street or on a flight.
“It’s the connection you have to make with their money,” said Malec, a 16-year industry veteran. “They’re young and really not used to having money. Then they get it all at once. My goal is to educate and empower them.”
It helps that her son, Chris Malec, was a former minor league player with the New York Yankees farm system. It was during his playing days that she switched careers from the health and exercise field to finance.
Malec befriended agents and players as she cut her teeth at Morgan Stanley, Dean Witter Reynolds Inc. and then Prudential Financial Inc., which later became part of Wachovia Corp.
Wells purchased Wachovia in late 2008 for about $15 billion as Wachovia struggled to survive under the weight of bad loans tied to real estate.
Malec used her contacts in the sports world to build a business at Wells, where she manages investments for clients with more than $1 million in net worth. She represents some of her son’s friends in the major leagues.
She now has her eye on representing National Football League players. She is on the NFL advisory players list, a small fraternity comprised of experts in various fields that help football players with issues on and off the field.
Merrill Lynch’s Kopjak, a former surfer and videographer, knows both sides of the relationship as well. He grew up surfing with some of the sport’s most successful names and parlayed his relationships in the industry into a growing financial advisory specialization.
Kopjak has known professional big wave surfer Mark Healey for years, even producing some of his videos and highlight reels.
Hawaii native Healey said he’s seen plenty of his colleagues squander their wealth and go bankrupt.
“That’s probably more the rule than the exception,” said Healey who started his pro career at 17.
The recession has hit the surfing industry hard, wiping out half the pros in the field. Sponsorships have vanished and events around the world continue to be eliminated.
That’s why Healey spends a lot of his time here at events, signing autographs and doing photo shoots.
He’s competed for seven months this year and been on seven magazine covers. But that’s not enough to provide a stable living for most in his sport.
“If you don’t follow up and come to OC and show face, it almost goes to waste,” said Healey, during a break from meetings last week with Quiksilver Inc. executives at the clothing maker’s Huntington Beach headquarters.
Quiksilver has been Healey’s main sponsor for the past seven years.
Healey lives on the edge.
He free dives in his spare time, hunts for giant swells and spearfishes for dinner—not exactly conducive to crafting a wealth management plan for 30 years down the road.
“It was really hard for me to get my head around it,” Healey said.
But at 28, his career already has outlasted the industry average of eight years. Like an NFL running back, age 30 is viewed critically in surfing.
“The pro surfing thing doesn’t last forever,” he said.
It’s a simple message that’s often overlooked by young athletes with time on their side.
“Some clients don’t want to hear that,” said Russel Upton, senior vice president and private client adviser for City National Bank’s private client services group in Southern California.
“Those don’t always end well,” he said.
Upton and Rob Pitois, senior vice president and private client adviser, represent hockey, baseball, golf and volleyball players for City National.
The National Hockey League has the best system in place for educating their players on financial issues, they said.
For the past four years, top prospects with the Anaheim Ducks have attended a pre-draft program organized by the NHL and its players association that focuses on financial planning and wealth management.
The finance session provides general advice, while emphasizing the importance of planning, prioritizing and participating, association spokesman Andrew Wolfe said.
Association officials will visit the Ducks clubhouse in the first few months of the year to highlight the importance of financial management, keeping close tabs on investments and avoiding the wrong kind of company.
“If something sounds too good to be true, it is,” said Jesse Mearl-Jones, a U.S. surfing champion who spent years living in Costa Mesa and surfing OC’s best breaks before moving back to his native Hawaii. “I’ve learned a lot, and lost a lot of money I invested trying to get rich quick.”
He had no experience handling money and knew nothing about personal finances.
Dana Messenbrink, who manages professional surfers and golfers at Newport Beach-based McClellan Nichols Sports Syndicate LLC, said too many athletes think they’ve made it after signing a big contract, not realizing it’s the start of their career, not the end.
“In the action sports business, careers can be cut short due to injuries, poor performance, becoming too comfortable with their lifestyle and not working hard enough to remain competitive,” he said.
He tells his clients to be frugal because an injury can end a career instantly.
Action sports companies endorse athletes who can perform today, and any contract they sign is ladled with injury clauses.
“The money is not always guaranteed,” Messenbrink said. “We do our best to protect the athletes. But some contractual issues are not up for negotiation.”
Bob Reckinger, of Reckinger Loynes & Kopjak Group, advises his motorcross, surfing and snowboarding clients to put the proceeds from contracts and signing bonuses into fixed-income markets, so the investments will take them through retirement.
“They don’t really need to create more wealth. It’s more of maintaining and preserving that wealth,” he said.
Mearle-Jones said he was unprepared for the business side of surfing and managing his money. But he’s learned from his mistakes and said he likely won’t repeat them.
After some mishaps, he made a pact to save his prize money and reinvest it for retirement.
“Sometimes that money you lose teaches you a lifelong lesson worth much more than the money,” he said. n
