Originally Posted by Beans
Thanks for the post. I'm often suspicious of "financial experts".
If AI had $10,000,000 to invest his "planner" would make $400,000 regardless if his investments went up or down that year. That's brutal. It's easy to see this "I'm a financial leech" bullshit in the huge MERs for Canadian mutual funds.
That's why the League, the Union, and the agents need to get involved and help NBA players select legitimate, proven financial advisors. It shouldn't just be one of the three parties, but all three parties working together in order to avoid players getting ripped off. In particular, I would be most leery if agents were connecting players with their financial planners since their agents could also be skimming from any commissions earned. As such, a joint process needs to be undertaken.
And while financial planners will make money off professional athletes, the athletes, too, will be earning additional income through their investments that SHOULD off-set the commission; therefore, leaving them financially stable in the short and long terms.
One final point, I've never met a financial planner that takes a 4% commission. Most financial planners will take anywhere from 0.3% to 1% of the initial money invested + any interest / growth earned. If you have a financial planner taking 4%, you better find another planner.
Agents, on the other hand, do take a hefty portion - from 2% to 15% depending on the client and his contract.