The NFLPA has been urging players to save for a potential work stoppage after next season, and now it has another arrow for that quiver: the union for the first time registered two major financial firms — Goldman Sachs and Bessemer Trust — to manage players’ money. And here’s a highlight; if players hypothetically are fleeced by advisers at those firms, they will make good on the loss.
The move, beyond aiding work stoppage planning, is a major change in the union’s 18-year- old financial advisers registration program that has come under fire in the past for having advisers who later ripped off players. Instead of just a single person registered, now an entire firm can register and monitor its employees who are in the program. That said, the change came about in part with the CBA expiring in 2021 in mind.
“I’d like to think about a work stoppage for players...(as) really a fire drill for when the paychecks really do come to an end,” said Dana Shuler, the NFLPA’s senior director of player affairs. “So the steps that we are asking players to take to prepare financially for a potential work stoppage are no different than the steps that we would ask players to take care for their career, post-NFL. However, it’s critically important at this juncture that they focus on a potential work stoppage in 2021. And that they are preparing aggressively for that to occur.”
According to Goldman Sachs, it started talking to the NFLPA nearly one year ago. A driving factor in the NFLPA entering into the partnership, Goldman said, is to prepare players for the possibility of labor strife.
“With the potential of a work stoppage being top of mind for many players, the timing of this partnership is important,” said Nicole Pullen Ross, managing director and head of sports and entertainment solutions for Goldman Sachs. “We are already thinking through strategies to navigate the complexity presented by a work stoppage and have the sources to help think strategically and prepare for that potential risk.”
The NFL and NFLPA have been talking since the summer, with the league reportedly wanting a deal done this year. While striking a new CBA that soon is a heavy lift, the two sides appear far more amicable than they were in the years leading up to the 2011 lockout.
The NFLPA created the financial advisers program in 2002, and today roughly 165 individual money managers are registered. About half of the NFL’s players use an adviser registered through the program, Shuler said. The program, which is voluntary, allows Certified Financial Planners or Chartered Financial Analysts with at least eight years of licensed experience to have their contact information listed on a password protected website accessible by NFL players and agents. Along with holding the necessary licenses, applicants are subject to background checks and must have no fraudulent history or pending client complaints.
Bessemer will add about six more advisers to that list, and Goldman up to 20. The NFLPA is in talks with a handful of other firms too.
“We’ve interviewed seven institutions for participation in the program,” Shuler said. “And... we will continue to interview additional institutions, as we try to round this out. It was an invitation only process based on institutions that had a great brand and reputation.”
Despite the program providing players with an additional layer of protection — not just from poor financial advice, but also from outright fraud — financial advisers registered under the program have misled athletes.
In one of the most wide-reaching cases, NFLPA registered financial adviser Jeff Rubin defrauded 35 NFL players of $43.6 million by having them invest in an electronic bingo resort venture in Alabama, a state notorious for its strict gambling laws. Shortly thereafter, Alabama outlawed electronic bingo and state authorities flooded the resort — built with the NFL players’ investments — to seize the bingo machines. In what would become the most expensive financial loss to NFL players at the hands of one financial adviser, players were left relying on resort visitors playing paper bingo games to recoup some of their hefty investments.
Chase Carlson, a lawyer who represents defrauded athletes, calls the NFLPA’s new institutional registration plan a good step.
“So it can solve one issue, which is, in the past, there’s been some people who are registered they ripped off players, and there was no money to recover,” he said. “By only registering, or by registering really large firms, there will be money there, if someone makes a mistake.”
While the individual registered financial advisers do have to register under NFLPA rules and have certain accreditations, the NFLPA asserts it does not certify or make any representations about the skill, honesty or competence of its registered financial advisers. Some players saw it differently: In a 2016 “60 Minutes” interview about Rubin, former NFL player Fred Taylor said, “I definitely would gain a sense of security with every registered adviser that’s in the pamphlet or on that list.”
The NFLPA’s liability under the program is limited as it neither endorses nor is responsible for acts or omissions by registered financial advisers. The difference with Goldman and Bessemer is they now will be responsible for monitoring their advisers in the program. It will be indicated which advisers are associated with Goldman and Bessemer.
“They will stand behind and monitor and ensure that individuals that are working with the players have met and will continue to meet the high standards that have been set,” Shuler said “[T]hat definitely provides another layer there because, you know, there are individuals that are committed to ensuring that they are not exposed financially based on the misdeeds of their employees.”