Two years into his career as a fullback with the Miami Dolphins, Rob Konrad was in the locker room after practice when a teammate, a fellow young player, started talking about some of his “investments.” Konrad, who had majored in finance at Syracuse University, called the player over and asked him what his big investment was. “I bought two Bentleys,” the player said. “Best investment I ever made.”

Konrad, part amused and part horrified, asked the player, tongue-in-cheek (he thought), which was a better investment, in his opinion: a car or a home? The player smiled broadly. “The car, of course!” he said. “You can always buy a new house, but you can drive the car from house to house.”

Konrad looks back at the story now and chuckles, but there's nothing funny about the moral: The vast majority of NFL players don't have a clue about taking care of their finances. And it's costing them: The National Football League Players' Association (NFLPA) estimates that at least 78 players have been defrauded of more than $42 million since 1999. The most high-profile recent case involved former agent William “Tank” Black, who was convicted and sentenced to six years in prison for defrauding seven players — including wide receivers Reidel Anthony and Germane Crowell — of more than $14 million.

Advising an NFL player on his finances is fraught with unusual peculiarities, not least of which is the odd task of having to fashion a retirement plan for a 21-year-old man in hyperperfect physical condition as if he were 60 years old. But it's necessary. The average NFL player's career lasts 3.5 years, according to the NFLPA, and the average annual salary is $1.25 million. That's good money, of course, but this fact complicates matters: NFL teams do not guarantee contracts, meaning that if a player is injured or does not perform up to expectations, he can be cut and the team is not required to pay his salary. (Note: NFL teams pay signing bonuses that function like guarantees, but these are usually extended only to the most elite players.)

Off the Field of Play

Given the frequency with which the average sports fan sees retired players like Steve Young and Deion Sanders doing commercials and/or color commentary for sports networks, many might assume that segueing into a second career is common and easy for the average player. Nothing could be further from the truth.

More often than not, when an NFL player's career ends, he finds himself at a loss for how to generate new income. For this reason, it's of paramount importance that players manage their money effectively before the cash spigot gets turned off.

This is not an easy sell for a financial advisor. When a fresh-faced 20-year old is handed more money than he's ever seen before, it's understandable that it would go to his head. Likewise, it is understandable that many of these strong, young men behave as though the good times will never end. Unfortunately, the good times can end all too quickly: An injury can cut a career short, or the athlete's “friends” can take advantage of their meal ticket's goodwill and euphoria.

“A lot of these guys come from backgrounds that don't have money, and they don't know what to do with it when they get it,” Konrad says. “They get taken advantage of, get charged exorbitant prices for things like bill paying. These are the guys who need the most help, but just don't get it.”

Konrad's answer to this conundrum: start a firm that specializes in helping young athletes avoid these pitfalls. In the locker room, Konrad has given his teammates informal advice for years and has became “weirdly popular” among those thirsting for financial help. (He is the Dolphins player representative for the NFLPA.) At the same time, he realized a couple of years ago that his expertise was limited. So, driven by a desire to “do the right thing for guys so they didn't get taken to the cleaners anymore,” he became a licensed financial advisor, earning his Series 7 and Series 24 designations with off-season studying.

Then, in 2002, Konrad teamed up with Tim Allen, an old friend and advisor who had a firm affiliated with Raymond James Financial Advisors (and had several clients in the NHL and PGA Tour). Initially Konrad helped the firm in planning and promotional capacities. (The firm's advertisements often run on Miami Dolphins postgame shows.) Then, in the summer of 2004, the firm officially broke off from RJFS and went independent, under the name Allen Konrad Asset Management, based in Boca Raton, Fla. (Konrad says the firm went indie because they wanted to sell their own proprietary products, and that the firm is actively looking for syndicates.) The firm doesn't disclose its assets under management, but Konrad says it has close to 300 clients.

During the season, Konrad says he's not as involved in the day-to-day running of the firm, though he checks in with Allen and other partners on a daily basis. During the off-season, though, he gets in a morning workout and then showers up and heads into the office.

One Out of Five Clients Surveyed…

Of the firm's clients, nearly a fifth are professional athletes, including several of Konrad's former and current teammates. He says the majority of his planning for the athletes involves wealth preservation rather than wealth accumulation. The firm makes frequent use of annuities and insurance products.

He points out that a high-round draft pick with a substantial signing bonus “doesn't need to hit home runs in the market,” he can let his money grow slowly. By contrast, a “grunt” who won't play in the league long has to prepare himself for a working life after his career has ended.

Mostly, it's a matter of pointing the athletes in the right directions.

“There's a lot of hand-holding involved,” Konrad says. “You have to make sure these guys realize that they have to hang on to their money before it's too late. Their careers are over before they know it.”

Konrad, 28, knows this firsthand. His contract with the Dolphins expired at the end of a disappointing 4-12 season, and new coach Nick Saban is expected to clean house. Konrad does not know if he will return to the team — the South Florida Sun-Sentinal speculates that he will return only if he agrees to “restructure his contract,” i.e., take a pay cut — and, theoretically, the firm could suffer if its star attraction no longer plays for the hometown team.

But Konrad isn't concerned about that, because, from an NFL player's perspective, this 28-year-old's career is already almost over. “I'm going into my seventh year as a fullback, which is a really long time,” he says. “I'm getting up there in age. I probably only have a few more years to play, if that. You have to set up a plan, and this is something I can eventually do as well off the field as I did playing on the field.” In this respect, though, Konrad is in the minority of players.

Protecting the Strong

The NFLPA — which has long been considered the weakest professional sports union, though its efforts have helped lead to labor peace for the league since 1987 — recognized the difficulties its young players were having with their finances, and in 2002, the organization tried to do something about it.

It founded the Financial Advisors Program, which is basically a listing of NFLPA-approved advisors that is given to players. Advisors who want to enter the plan apply though the NFLPA, according to Dana Hammonds, assistant director of the program. (There is a $1,000 nonrefundable application fee and a $500 yearly membership fee.)

The program screens advisors to make sure they have clean U4s (it won't register anyone who has pending customer complaints or any arbitration settlements in the last 10 years), a minimum of three years of industry experience, adequate liability and errors and omissions insurance and the proper licensure (recognized by the SEC and NASD and/or a CPA). Approved advisors get lists of players and their agents — the warmest of warm leads.

The Players' Association “highly recommends” to players that they avoid letting anyone who is not NFLPA-certified handle their finances. “So many players have been defrauded, we felt we had to do something,” Hammonds says. “We don't evaluate advisor performance or anything like that. We just have to make sure someone's watching out.” Hammonds declines to name specific firms with advisors in the program, but she says it includes 450 advisors and “about 20 of the leading firms.” (UBS confirms they have advisors as part of the program.)

The primary educational outlet for introducing players to the program has been the yearly Rookie Symposium, which brings all incoming rookies to a hotel, “locks them in” and informs them of the pressures and temptations they will face in the NFL. Of this weekend, “about half” of the presentations involve players' finances, and much of that directly relates to the Financial Advisors Program.

The results of the program, so far, have been mixed. Hammonds says the number of documented cases of player fraud has dropped from an average of about 20 a year to one or two per year. But Konrad, who praises the program's intentions, estimates that “only a quarter” of NFL players use the service.

“Guys don't use it as much as they should,” says Konrad, whose firm has members in the program. “A lot of that symposium stuff is in one ear, out the other. There's no way to make guys see it.”

Hammonds admits that the program has had “problems with implementation,” (she declines to provide the percentage of players who use it) but says that's mostly because of veteran players who have not required their existing advisors to sign up for it. “We educate players as they come in,” she says. “It's a free service, and more clubs are emphasizing its importance.”

But even with the NFLPA doing what it can to protect players, the combination of youth, instant wealth and a short career span can create a perfect storm for those who can't hang on to too much, too soon.

“You see guys who live like millionaires for two years, then lose it all,” Konrad says. “Then their careers are over, and they sit there and wonder, ‘Jeez, what do I do now?’”

Making the Team

Qualifications advisors must meet to participate in the NFL Players Association's Financial Advisors Program.

  • No pending customer complaints
  • No arbitration settlements in the last three years
  • Three years of industry experience
  • “Adequate” liability and errors and omissions insurance
  • Proper licensure
  • $1,000 nonrefundable application fee
  • $500 yearly membership fee

To apply, contact the NFLPA:
Dana Hammonds
NFLPA
2021 L Street, N.W.
Washington DC 20036
Or visit nflpa.org

Sobering Stats

Life after football can be tough for NFL players.

  • Average NFL player career: 3.5 years
  • Average annual salary: $1.25 million
  • Percentage of NFL players' marriages that fail within first year of retirement: 50%
  • Percentage of NFL players retiring with “permanent injury:” 65%
  • Percentage of retired NFL players diagnosed with “clinical depression:” 11%

Source: NFLPA, gamesover.org