Car dealerships, restaurants, investment schemes, nightclubs. There is no end of things professional athletes can find to spend their quickly earned millions on.

But financial advisors to these hard-driven, high-profile individuals are the ones who have to screen the deals and tell clients which are real opportunities and which are expensive lemons.

And if the advisor is wrong, he or she may end up as a defendant in a lawsuit.

However, there are ways to help professional athletes avoid the kind of financial meltdowns that grab headlines, say advisors who work with athletes.

“An advisor has to recognize that athletes are trained to ignore risk,” says Michael Delgas, managing director of Sontag Advisory in New York City. “There may be a 90 percent risk they will get injured during their career, but they have to ignore that and get out on the field anyway. Think of any halftime speech by a coach and then put that speech in the mouth of someone pitching an investment idea to them.”

It may be hard for the athlete to say no, especially if it is a relative or friend pitching the “once-in-a-lifetime” deal to them, says Ron L. Brown, partner at Athlete Essentials Group, a financial services firm specializing in advising professional athletes based in Lexington, Ken. 

A financial advisor has to convince the athlete clients to take a very different approach to their portfolios than they do to their professional lives, but the advisor has to realize that risk-taking is part of the athlete's mentality, Delgas says.

“You don’t want to be the bad guy and shoot every idea down just because it involves something an advisor might not usually deal with,” Brown says, “and you want to treat the client with respect. The best thing to do is to lead the client to decide that the investment proposal is a bad idea.”

Brown says one of his NFL clients wanted to invest in a doughnut company in Canada that his friend in the Canadian Football League pitched to him.

“He told me they were the best doughnuts he had ever eaten and that the customer lines were out the door,” Brown recounts. “I asked him if the company made any money and we discussed it from there.

“Now the former NFL player is still a client and the friend from Canada is also a client,” he says.

Brown has had other clients who avoided bad investments pitched by their close friends. One wanted to invest in real estate that promised 20 percent returns, but Brown found the deal was premised on unrealistic occupancy rates. The athlete client decided not to invest, but remained close to the friend who pitched the idea.

But in some instances, if the client insists on making bad investments, the advisor may have to terminate the relationship, Brown says.

“Sometimes advisors lose sight of the fact that we have the ability to choose who we work with,” he concludes. “Athletes have so many predators and leeches around them that they don’t trust many people. That means we, as advisors, end up dealing with things that are not really in our wheelhouse.”

To do that successfully, the advisor can refer the athlete to someone with expertise in the area of the proposed investment, says Jason M. Katz at Katz Wealth Management in New York City, part of UBS Financial Services Inc.

“We can tell them they should be talking to their agent or business manager, but we cannot recommend anything that has not been vetted by UBS,” Katz says. “We can also tell them if they are in a financial position to be able to consider one-off investments. We understand their goals and can see how much wiggle room they have to keep their future from imploding.”

For athletes, the advisor needs to make several plans. Plan A is the best scenario where the athlete has a successful career in broadcasting or coaching after retiring from the field or court, Katz explains. But then the advisor also has to make Plan B and Plan C in case that does not happen.

A financial advisor also has to think about protecting himself from being sued by a client who ends up in a bad deal against the advisor’s counsel, says Delgas.

“You have to make it clear it was not your idea and that you recommended against it,” Delgas says. “Document everything in writing and make sure you are not charging for advice you are not qualified to give.”