Advisors usually jump at the chance to sign individuals with mammoth windfalls and ultra-high incomes virtually assured by lucrative multi-year contracts.

Yet when these prospects are big-time professional athletes, some advisors may hesitate for the same reasons they’re sometime reluctant to serve celebrities in general: Such clients tend to possess less financial literacy than those who become wealthy from business, may be difficult to work with and may lack discipline, spending like there’s no tomorrow. And after going off the rails of their financial plans, these clients may expect you to clean up the train wreck and (futilely) attempt to prevent the next disaster.

Yet for advisors who learn to understand and manage them, serving this clientele can be highly rewarding, especially for advisors who pride themselves on building trust and crafting holistic solutions. Getting and serving athletes as clients may mean learning or improving client relations skills and new planning skills to meet the unusual challenges facing these suddenly wealthy young men.

Theirs is not the problem of having enough income, but one of having a tremendous amount during their youth that must be marshaled to last long after they can no longer play. Instead, unrestrained spending—on cars, helicopters and jets--could consign them to a fate that, sadly, is all too common. About 80 percent of retired NFL players go broke within three years of leaving the league, according to a Sports Illustrated survey. And many NBA players are in financial trouble even before they retire. 

Here are some pointers on how to help athletes avoid this fate:

• Take extra time to understand them and engender trust. Many newly minted sports icons are from impoverished backgrounds. They often come to their newfound wealth with an entourage and want to put these friends on a payroll of sorts. Most don’t know the difference between real investments and speculative business ventures, income and capital, salesmen and advisors.

  The best way to get referrals for athlete clients is to develop relationships with, and clients among, team physicians and dentists. Athletes tend to trust them so these referrals are golden. But even though this gives you the benefit of the doubt, you still have to earn their trust. If they’ve had a contract for a few years, they may have been burned by an unethical advisor—a wall of distrust you’ll have to climb by showing them difference between advice and sales, and what a fiduciary is all about (without using that eye-glazing term or getting into legalistic definitions). If they’ve been burned, keep in mind that they may be showing everything you give them to an attorney.

• Don’t approach them as you would a wealthy business person. Unlike a corporate CEO, most athletes won’t be impressed by your designations and academic degrees. Instead, they may be intimidated, which increases the distance between the two of you rather than narrowing it. Focus on letting them talk to bring them out about their situation, feelings and goals.

• A higher level of service is required than for most high-income clients. Signing athletes can expand your business significantly, but serving them effectively usually means more time, attention and general hand-holding—especially at first. A good way to think about this to take the amount of time and attention you spend on a typical high-maintenance HNW client and put this to the second power. After some high-performing rookies get their first contract, they’re looking at tens of millions per year with no existing financial structure, portfolio or financial plan to absorb it. That means advisors must start from scratch.

• If the timing of your first encounter permits, try to get them to take a deep breath, waiting a few months after signing a contract and doing any serious spending. This is a heady time for them; their lives are changing in a big way. They need to take time to think and work with an advisor to get their new financial lives together. During this period, you can impress upon them the need to set limits—that anyone can outspend their wealth. They need to learn that, as Schedule C employees, they must pay their own taxes directly every quarter, how this will consume a huge chunk of their income and how you, with the help of tax advisors, can devise strategies to soften this hit.

  Try to persuade them to bring you their impulses to spend on big-ticket items, such as yachts and mansions with 25 bathrooms, so you can discuss not only the purchase prices but also the costs of upkeep, insurance premiums and taxes. After signing, many athletes want to buy a house for their mother, who often helped them succeed. Within limits, this is often OK for big earners. But buying Ferraris for friends or doling out money to them on a regular basis is usually a slippery slope.

• Try to get them on a budget, if only a preliminary one, as soon as possible, while you sort everything out. Meanwhile, after the initial discovery meeting, I usually schedule three more. Meeting two is to set up a cash-flow plan and an investment plan, meeting three is for mutual commitments and meeting four (usually after 45 days) is about their statements and how to read them.

Serving athletes can be highly rewarding—and quite interesting for sports-fan advisors. Keeping these rules of thumb in mind can give you a head start on developing an advisory mindset suited to this singular clientele.

David Robinson, CFP, is founder/CEO of RTS Private Wealth Management, an SEC-registered firm in Phoenix that provides fiduciary services to help clients achieve their financial goals. His practice focuses on helping wealthy individuals—including NBA, NFL and MLB athletes—with custom plans, using a holistic approach to grow/protect wealth, manage taxes, identify insurance solutions, prepare for retirement and manage estate plans.