(July 26, 2005) Players in the National Hockey League did not gain much from the 310-day lockout, but it did wake them up to what life is like without hockey —and a steady paycheque. That might not be such a bad thing for the advice industry, as play is set to begin again, and several players will be turning to professionals like advisor Gil Scott for help.
Scott is head sports consultant at Toronto-based RBC Financial Group. It’s an unusual title for someone at Canada’s largest bank, but then again so are the clients: nomadic millionaire pro athletes with complicated financial needs. They have to deal with competing tax regimes, exposure to currency risk and frequent moves, all while competing on the road. There is also the constant looming prospect of players sustaining a career-ending injury with the next big hit.
“You don’t know if you are going to be done tomorrow or five or ten years from now with injuries,” says Scott, “So the advisor has to plan for every situation.”
Scott is well versed on the needs of pro athletes since he is a former sports agent who represented coaches in the NHL, as well as general managers and several players in the National Football League.
He helped set up a program involving brokerage firms, mortgage advisors and personal bankers in the late 1990s for RBC after the bank decided it wanted to have a stronger presence in this field.
Professional athletes need a service that gives them a high-degree of security, says Scott. More than that, these players need a single point of contact, someone who can do everything for them —whether they are seeking help with a mortgage, tax advice or transferring money —at any hour of the day.
With the NHL lockout finally over, Scott expects his program will be a lot busier over the next month. “You are going to see a number of players changing teams in the next few weeks,” he says, adding that RBC will play a vital role helping those players get settled in their new city. Furthermore, the bank is well suited for the task since it has offices on both sides of the border.
Ask any player, past or present, and they will tell you more of their colleagues could use a chance to talk with an advisor. “I’ve seen guys up to three years ago spending up to $60,000 a month on their VISA bill,” says Garry Valk, a former winger for the Toronto Maple Leafs. “I never had $100,000 every time I went to the bank machine,” he notes, adding it’s no surprise a number of players have nothing left when they retire.
Gary Fournier, senior vice-president at UBS in Los Angeles says there are many challenges in dealing with professional athletes, especially in today’s market with some players coming straight out of high school. “You have to treat 19-year-olds like 69-year-olds and that’s difficult to convey,” he says. Fournier, who represents about 40 active pro athletes, says the common mistake his clients make is thinking the money will last; they forget the money has to last them a lifetime.
Take Derek Sanderson, or “the Turk” as he was known in his prime, with the Boston Bruins. In 1972, he was the highest-paid professional athlete in the world, earning US$2.65 million a season. But by the end of the 1970s, a string of bad investments and a battle with alcoholism forced him out onto the street.
It is rumoured that his plight was so desperate he once waited for a homeless person to pass out on a bench so he could swipe his booze. With a lot of help from the likes of Bobby Orr, Sanderson got back on his feet. He is now an investment specialist with Boston’s State Street Research Co., but neither the NHL nor the players want to see anyone end up in such dire straights.
Scott notes RBC has a reputation now, especially in Canada, for dealing with border issues, and that currently the bank represents 750 pro athletes ranging from first-round draft picks to team captains. “There was a game between two Canadian [NHL] teams two years ago and between the 40 guys on the ice, I think about 30 were clients of ours,” says Scott.
And getting advice isn’t the problem; knowing who to trust is. “You get people in our dressing rooms every day, especially in places like Toronto, who were just leeches,” says Valk, noting there was always someone selling a mining play or an oil investment or a diamond story.
Scott explains building this trust is key to forming a strong relationship and though RBC advisors go right into the dressing rooms to get to know the players, they aren’t selling high-risk investments.
“The people who work for us are unique individuals in their own right,” says Scott. “Our people know the high demands of athletes so they make themselves available 24 hours a day, seven days a week.”
Filed by Mark Brown Advisor.ca, firstname.lastname@example.org