As a founding partner at JL Strategic Wealth, Registered Investment Advisor Jacob Turner brings a unique perspective to the sports industry. After all, he was top 10 draft pick in Major League Baseball, who went on to play the sport professionally.
We recently sought out Turner to get his insights about being an advisor and what he has learned about working within the professional sports industry.
Question: What led you to become a financial advisor to athletes and other individuals in the sports industry?
Answer: The two main drivers that led me to become an advisor to athletes were my own experiences and my desire to help educate athletes financially in their careers. In 2009, I went from being a high school student to a top 10 draft pick in a matter of a few days. This experience left me with a set of financial challenges I had never experienced. I was trying to determine how to qualify people for my advisory team without having any idea what questions to ask. Many of these experiences left me with more questions than answers. As a professional athlete, you are hyper-focused on your career on the field but understand the decisions you make off the field have effects far past your playing days. As my career progressed, I found a passion for personal finance and investing. I knew when my playing career was over that I wanted to help educate the next generation of athletes to be good stewards of the money they earn in their careers.
Q: How does being a former athlete help you?
A: Being a former athlete helps tremendously in my work today because it allows me to truly understand what our clients are walking through. My career was certainly not a straight line of success and many of those experiences helped to shape the advice I give today. I remember going from having a few hundred dollars in my bank account to being an instant millionaire overnight. Those experiences are hard to replicate or understand if you haven’t walked through them. I also experienced the ups and downs of professional sports from making my MLB debut at the age of 20 to being back and forth between AAA and Big-League Club by the age of 25. These experiences help me to educate our clients about the shelf life of a professional athlete.
Q: What is the biggest challenge of working with athletes?
A: The biggest challenge and the biggest joy for me are that athletes are often a blank slate when it comes to personal finance. For most top athletes, you are coming into significant wealth between the age of 18 to 22 years old. They do not have the advantage of having a lifetime of financial experience that most corporate professionals do. Peak earning windows for most professionals comes from age 50 to 60 after decades of financial lessons. The financial arc for athletes is so accelerated that it is paramount that we work to educate our clients about money. I have found that this focus on education for athletes creates better engagement which ultimately leads to better results. We have the distinct opportunity and responsibility to be a trusted partner for our clients both during and after their careers.
Q: What do you like the most about this niche?
A: The part that I enjoy the most is the impact that I can make on our clients. Having had so many unique experiences in my career it is rare for a client to be walking through something I did not. Ultimately, becoming a trusted partner for our clients and families is incredibly rewarding. That impact extends far past just financial decisions. It allows us to be a small part of their journey and help support them in the best way possible to maximize their talents.
Q: What makes an athlete’s finances unique?
A: Athletes are unique in several ways. The most obvious is the earning window is condensed into just a few years. This level of acceleration requires that there be an immediate focus on lifestyle creep. The question that I always ask our athletes is, “What does it cost to be you?” If their career were to end tomorrow could they continue to support and live the lifestyle they are living? Two other elements that stand out for us are tax planning and estate planning. The single largest expense for an athlete will be their tax bill. We want to ensure that we are being proactive in maximizing their on-field and off-field income. Athletes are unique in that they can have years of significant income followed by years of little income. These career structures create an opportunity for us to work in coordination with their CPA to implement tax strategies specific to them. We are always thinking about our tax planning for athletes in terms of minimizing taxes over their lifetime. The second element that stands out to me is estate planning. Athletes are young and often are not thinking about estate planning, but we see this as a crucial part of their financial picture. It allows them to better protect their assets and dictate how their wishes are carried out. In addition, many top athletes have an opportunity to earn significant income often creating an estate tax liability. Tax and estate laws are always changing, and our clients rely on us to ensure coordination and planning with the other members of their team. These tax and estate planning strategies are just two ways that we are serving as our client’s strategic partners with a focus on their entire financial picture.
Q: Is there an investment philosophy you embrace?
A: Our investment philosophy is based on three pillars: each client is unique, costs matter, and follow the evidence. The first pillar is the foundation of our philosophy. Every client has been shaped by the financial circumstances and experiences that have happened in their lives. It is our job to understand these elements as it influences their view of money. The second pillar is focused on data from leading academic research that shows that cost is a main driver of returns. We break these costs into two distinct categories. The direct cost of the investment strategy and the indirect cost of the structure. We seek to gain an advantage through implementing low-cost, tax-efficient investments into client portfolios. The final pillar is that we believe in being truth tellers and always following the evidence. The foundation of our investment portfolios is rooted in Nobel prize winning research. Our focus is on building long term investment strategies that provide the highest odds of success.
Q: Who are your typical clients within the sports industry?
A: Our firm’s focus is solely on clients that are navigating sudden wealth. With this acceleration in their financial arc, it leaves quite a bit of complexity that needs to be navigated in their financial picture. Our clients appreciate that we step in as their strategic partner to help build and coordinate their team of professionals. We work with athletes from start to finish. Our athlete clients range from players just starting their professional careers to clients that are All-Stars. This gives us a wide range of experiences to draw on for our clients ultimately creating a better client experience. We believe that the wealth management industry has for a long time provided far too general advice and having a specific niche focus provides more actionable advice for clients.