Professional athletes have traditionally been targeted by fraudsters and a sizeable percentage of them end up as victims of investment fraud or financial scams. The global sports business and professional players’ salaries are increasing in value each year and so do financial fraudsters. The revenues of professional athletes nowadays are growing fast due to huge sponsorship/endorsement deals, and a lot of financial predators out there want a piece of the action.
The choice of a good financial advisor is paramount in the success of your financial plan. You need to exercise great care when choosing your financial advisor since this is the person who will be guiding you on how to achieve the financial results you need to attain financial freedom.
Finding a trusted financial advisor can help you achieve your financial objectives and attain financial freedom. Therefore, when evaluating prospective financial advisors you need to exercise great care and you should make sure that you follow the below guidelines:
- First and foremost, it is imperative that you do not hand over control of your finances to anyone! And when we say anyone, we mean anyone and that includes parents, siblings, friends, agents, etc. Financial advisors should not be relatives or close friends. Personal relationships cloud money matters and may lead to feelings of entitlement to the money involved.
- You should devote some time and do your homework on the recommended investments. You should be in a position to evaluate the basics of an investment opportunity starting with whether such an investment and its expected return make sense.
- Create a team of experts. You should be aware that certain financial professionals are experts in a particular service, but not in An accountant for example cannot also do your financial planning; you need a certified financial planner to do that. You should not rely entirely on one financial advisor; you need to build a collaborating team comprising of different types of expertise. Ensure that your financial experts welcome input from the other professionals in your financial team.
- You should invest in teams of advisors who are backed up by well-established firms, since these types of firms impose and enforce strict and continuing compliance standards and ethics training upon their employee advisors.
- Even when the financial advisor comes from a reputable firm, you should still do some checking on the individual advisor. A basic check on the financial advisor can be done by contacting the Regulatory Authority which granted the advisor the relevant financial services license to see if there are any grievances or complains against him/her.
- You should always seek referrals for your prospective financial advisor, especially from people who have been working with him/her for a number of years because it may take a few years for the consequences of financial mismanagement and/or fraud to surface.
- Many financial planners, investment bankers and other financial professionals often work on commission. That means they only get paid if you invest in what they recommend, and they may not always give the best advice or have your best interest in mind.
- The financial advisor should be willing to spend the necessary time to educate you on the basics of whatever investment he/she proposes and answer questions on how the money is invested, what is the expected return on the investment and what is the worst-case scenario if the particular investment goes sour.
- You can build a protection firewall by requesting frequent and regular updates on your financial position and the status of your investments. If, for example, you require bimonthly meetings with your team of advisors where the financial advisor presents to the whole team the current financial position vis-à-vis the previous one and reports on the happenings between the current and the previous period, it leaves very little room, if any, for financial fraud to take place.
You should remember that your advisors just serve the purpose of informing you about all your available options but the financial decisions are ultimately your own. Therefore, it is of utmost importance that you choose the right people to advise you and guide you in your journey to financial freedom.
