Throughout the month of October, I had the opportunity to spend time at two prominent baseball events – the Arizona Fall League for MLB’s top farm system prospects, and the Perfect Game WWBA tournament in Jupiter, Florida.
Having a presence at these events is priceless for our team. At Winpoint, we pride ourselves on being ingrained in baseball. We focus on the baseball player, and we strive to understand the needs of this specific player both on and off the field, at every stage of their career.
On this trip I spent time with two very different groups of young athletes: top minor league prospects on the brink of being called up to the majors, and high school players and parents just beginning their journey. Building these relationships gives me an inside perspective on the lives of professional baseball players that just cannot be replicated by the average financial advisor at a bank.
In Arizona, I talked with top prospects that have been through the draft, received an initial signing bonus and are now living off a steady income. It surprised me that a fair amount of these players do not have a financial advisor. They are still very much focused on the game and doing everything they can to get called up to the majors. Our fear is that they are not setting themselves up for success off the field, especially at this pivotal time in their career. In talking with these guys, I felt it was important to help them understand that in a matter of months their financial situation will change drastically, and with that comes a lot more responsibility, and a lot more risk.
Much like athletes have the consistency of a coach for on the field, and a trusted agent at their side, a financial advisor should be secured early and should maintain a consistent presence off the field. To have a trusted team handling all aspects of an athlete’s finances alleviates the pressure and allows the athlete to focus on their job. I should note that we prefer to work in conjunction with an athlete’s agent. The system works best as a partnership because the more trustworthy people an athlete can have at the table, the better.
In Florida, my conversations were much different as I spent my time talking with parents of amateur players, mainly high school seniors. The pressure to perform, however, remained the same. Every major league team had scouts present and these kids and parents were zoned in on success on the field. Despite that, I found it very easy to talk with parents about finances. Their level of interest and awareness in planning for their son’s financial well-being was very high. In fact, the majority of parents exhibited a fair level of concern for getting their financial house in line early as they look to deal with either the pressure of college or singing bonuses.
It was comforting to know that parents want to take an active role in their player’s financial future. At Winpoint, we believe that financial responsibility initially lies with the parents, and that it’s unfair to ask a 17-year-old to concentrate on his financial outlook. We also believe that the family of a player who aspires to play professionally should begin seeking the advice of a financial firm before college or the draft.
In our experience, there are many financial risks when it comes to a young athlete’s entry into this industry that we aim to mitigate from the beginning:
- The desire to spend the signing bonus quickly with the purchase of an expensive car or other items.
- The risk of not understanding the time it takes to make a major league player salary. While a signing bonus might be high, an initial salary of a prospect is low and it’s unlikely that an athlete will make decent money for a few years.
- The risk of destroying your credit early on by making poor decisions.
- Outside influences such as family and friends asking for financial support.
The takeaway for me after this trip is simple. It’s never too early for an athlete and his family to start thinking about financial security, and that a baseball player should trust in advisors that know the game they play.
Colin Moran was the 6th overall pick in the 2013 draft and he signed on with Winpoint right after being drafted. We immediately started handling his budget, taxes, and bills, and have set him up for financial security as he makes his way through the minors. Winpoint made his transition from amateur to professional baseball seamless, and on a personal level, we are so happy to share in his professional success.
As I talked with players and families this past month, I was energized by seeing the next generation of professional baseball players hard at work. I can only hope that Winpoint has the opportunity to help them continue on their path to success both on and off the field.
– Nick Durastanti