New York — JPMorgan Chase said Wednesday it will begin building wealth advisory services that help athletes who make money as a result of their talents make that money work for them for the long term.
The initiative does not only target wealthy, legendary athletes. The initiative targets athletes of all sports, ages and income levels, from college athletes who are earning royalties from their name, image and likeness for the first time, to well-known athletes who earned large sums but are now looking to retire in their mid-30s and need to make those sums last for decades.
JPMorgan hopes to reach these athletes early, perhaps as early as high school but certainly on college campuses, in hopes of teaching them good financial habits from the beginning.
“They’re getting a lot of money, and they don’t know what to do with it,” said Megan Rapinoe, a professional soccer player and Olympic gold medalist.
JPMorgan is not doing this for charity. Those few who become professional athletes can end up millionaires many times over, and the biggest stars can end up billionaires. Managing that money through JPMorgan’s wealth management arm could generate millions of dollars in fees for the bank, and the recognition of athletes’ names could bring future clients to the bank.
There have been many stories of athletes who faced financial difficulties despite amassing huge fortunes during their careers. Academic research has shown that one in six NFL players will end up filing for bankruptcy within 12 years of retirement. Mike Tyson is said to have made half a billion dollars in his boxing career but was forced to file for bankruptcy, and there are similar stories for legends such as boxer Evander Holyfield and basketball player Antoine Walker.
The stories are often the same: Athletes get huge fortunes but don’t get the education needed to make them last as long as they need to.
Allie Love, a Peloton instructor, said she often felt embarrassed or afraid to seek financial advice, even after she had success with Peloton. She recalled one of her first meetings with a bank where her interactions with financial advisors left her with more questions than answers.
“I was like, ‘Who’s Roy?’ “I thought Roy was spelled with a Y,” Love said in an interview with The Associated Press. Only later did Love learn that “Roy” was not a person, but an abbreviation for “return on investment,” or ROI.
Love is one of nine athletes who will sit on JPMorgan’s new Athletes Council. The board also includes Dwyane Wade, a two-time NBA Hall of Famer from the Miami Heat, Sue Bird, a WNBA champion, and legendary NFL quarterback Tom Brady. Other athletes and personalities include Jalen Brunson of the New York Knicks, World Cup champion Alex Morgan, Kayvon Thibodeau of the New York Giants, and four-time NBA Most Valuable Player winner A’ja Wilson.
Love spoke of how she often felt like bankers were talking down to her, and that she felt intimidated.
“I sat there for many years and said ‘okay’ and ‘sure’, and nodded a lot, but I wasn’t really told, I wasn’t really educated, and I was too nervous and too afraid to ask for help.”
The Financial Wellness for Athletes Initiative was the brainchild of Christine Lemkau, CEO of JPMorgan Wealth Management. Lemkau invited Love to be part of the program after they saw each other in a tennis match at the US Open, and they talked to Love about how all the banks want to go after the biggest names in the business, while ignoring those who probably need the most help.
“There is an underserved segment of athletes, whether they are youth, college, professional or retired,” Lemkau said. “They’re all different. And most financial services companies are after Ally Loves, Tom Bradys, Dwyane Wades, and 99.99% of athletes don’t fit into that field.”
Lemkau and Love joked that athletes, like anyone who suddenly reaches wealth, will want to be able to spend their money on luxuries. But beyond buying handbags, jewelry and cars, it’s also important that these athletes can live off what they’ve earned for decades to come.
Love said: “Enjoy the fruit, but also let the fruit last.”