Few clients bring as much fame and fortune to the table as do professional athletes. But advisors who wish to serve this wealthy clientele should take note: Sports figures face myriad complex and unique issues that require special expertise to unravel.

Advisors will find, in fact, very little that's "typical" about high-net-worth clients from the world of professional sports. These clients' career paths are at times uncertain and extremely unpredictable. Many of them are overnight millionaires, signing lucrative contracts right out of college or even high school. Their earning power, however, can vanish just as instantly if they sustain a serious injury or are unable to perform for other reasons.

Advisors will also find that professional athletes are anomalies when it comes to retirement planning and investment horizons. Whereas most advisors are looking at winding down their clients' careers after 30 or 40 years, athletes typically hang up their cleats after less than 10 years. A 2007 study, for example, concluded that the average career of a Major League Baseball player lasts 5.6 years. National Football League careers are even shorter, with an average length of 3.5 years. Advisors, therefore, will find that planning for an athlete's "retirement" will entail helping him plan for a second career.

For these and other reasons, advisors serving professional athletes need to have a high expertise in not only finance and investing, but also in the intricacies of professional sports. Advisors must understand salary structure, contract and bonus structures and what the athlete does and does not get reimbursed for by the team. They must also know the financial repercussions when an athlete is injured. They need to know, for example, how long the athlete is expected to be sidelined and if he will travel with his team during the recovery period-factors that must be considered when preparing tax returns.

Perhaps more important than knowing finances and sports, however, is the effort an advisor makes in knowing his professional athlete client. Sports figures live fast-paced lives and often are forced to adopt a nomadic lifestyle that requires them to move from team to team, tournament to tournament and city to city. Advisors can be a valuable source of stability in a professional athlete's hectic life, but only if they take the time to get to know their clients and are diligent in looking out for their interests. Knowing the client's general data-risk tolerance, net worth and cash flow-is just the tip of the iceberg.

Advisors need to know their clients' life goals, what their dreams and aspirations are after their playing days are over, and  have a solid relationship with their families.

That means lifestyle management should be an integral part of how advisors serve professional athletes. Our firm spends a lot of time traveling, attending sporting events and helping athletes and their families with matters such as purchasing cars and real estate, obtaining loans, reviewing business ventures, and setting up and shutting down temporary housing-in essence, acting as a personal CFO.

Meanwhile, we remain cognizant of the following issues that differentiate professional athletes from the traditional high-net-worth client.

Short Careers, Unpredictable Income
The short career of the average professional athlete doesn't leave much room for error. It often puts advisors in the unusual position of having to implement a retirement income plan for people who have not yet reached the age of 40. Retired athletes, however, need to understand they are similar to a 60-year-old in that they need to secure a sufficient income stream. The challenge for advisors is to drive home this message to a 23-year-old who is still basking in the glow of signing a multi-million-dollar contract right out of college. In many cases, depending on the sport, these overnight millionaires may even be younger.

Forecasts, spreadsheets and a mountain of numbers often overwhelm younger athletes. That means a strictly quantitative approach can be counterproductive when trying to drive home the benefits of saving and investing to the professional athlete. While it's important to use quantitative tools internally, advisors should strive to get their message across in a more friendly and relaxed conversation. We try to stress how important it is for our clients to understand our investment philosophy and the funds in which they are invested. Providing the younger athlete with case studies or real-life stories of what can happen if money isn't managed properly can be helpful. Explaining what can happen when athletes get caught up in "glamorous" and costly investments is sometimes all the ammunition an advisor needs to keep clients focused.  

Since the typical athlete's prime earning potential lasts just a few years, it means he has to get conservative in his investments early on. Just because an athlete signs a multi-million-dollar contract does not mean he can put off saving and dive into high-risk investments. Dollar-cost averaging needs to begin immediately to build up the nest egg that will soon become his primary source of income.

We typically set our athlete clients up with a budget account in which their paychecks get deposited, with a certain percentage flowing into their investment accounts each month. We focus on safe, low-cost investments such as mutual funds to give them a slow and steady return.  We offer nine models for our clients to invest in ranging from very conservative to somewhat aggressive. The models that fall on the lower side of the risk spectrum consist of cash, international and U.S. bonds such as the Prudent Global Income Fund and Hussman Strategic Income Fund, and hard assets such as U.S. World Precious Metals. On the other side of the risk spectrum, we use a larger percentage of growth stock funds, and hard assets since we see the long-term outlook for gold, energy and natural resources to be very favorable. We also have balanced portfolio models consisting of funds such as the Ivy International Balanced and Fidelity Balanced Funds, as well as Leuthold Core Investment.

Second Career Planning
Because athletes retire at such a young age, it is crucial for them to start thinking about their second careers during their playing career. We like to call it planning for their "Next Game." We stress to athletes that if they have not finished their education, they should use any resources provided to them by their employers to do so. Many athletes, for example, get a scholarship program included in their first professional contract.

Athletes have a unique opportunity to make great business contacts during their playing days-contacts that can be invaluable to them when those days are over. One of our clients, Baseball Hall of Fame member Cal Ripken Jr., parlayed his business contacts into the eventual ownership of minor league baseball teams and the building of Ripken Stadium in Aberdeen, Md.

We also try to make the transition easier by having the athlete focus on a passion or hobby that can develop into a second career.  Some of our clients have become successful coaches, broadcasters, real estate developers and small business owners. Many times we suggest that they seek the guidance of a business coach.