Topping every category in the Rio 2016 Olympic Games, the U.S. took home a whopping 121 medals – the most of any country.
Next challenge for many of these spectacular athletes? To capitalize on their victory and launch careers of success and longevity. Enter: The savvy financial advisor.
ThinkAdvisor interviewed two such Merrill Lynch FAs – one based in Chicago, the other in Columbia, South Carolina – who have helped Olympic medalists structure their financial lives, invest wisely and steer clear of opportunists with bad deals. We also interviewed their record-setting clients.
One, who just returned from the Rio games, has become, in her second career, a gold-medal-winning star coach. The other, after notching an imposing Act Two in the business world, is focused on retirement planning.
Five-time Olympic gold medalist (1996, 2000, 2004 as a player; 2008 and 2016 as a coach) and Women’s National Basketball Association point guard Dawn Staley, 46, is one of the greatest female basketball players of all time.
This past Saturday night, as an assistant coach, she helped take the U.S. women’s basketball team to its sixth consecutive gold win, a first in Olympics history.
When it comes to investing, Staley discusses her relationship with Columbia-based Merrill FA John McCardell, vice president with Ellison Kibler & Associates, in basketball terms.
“John is the three layers of defense who swats [away] anything that creeps in that can score against me,” Staley says. “I’m the one that plays offense in devising plays to make a quick dollar. John wants to make a dollar too; but he wants to do it the right way and be sure that there’s longevity in it. He has my future in mind.”
She continues. “John always brings me back to our first conversation: What is it that I want to do? How do I want to live once I retire? All his answers are predicated on the very words that came out of my mouth in the beginning of our relationship.”
That’s in perfect sync with what McCardell told ThinkAdvisor: “When I asked Dawn, ‘What do you worry about?’ she said, ‘Poverty – I never want to go back to being in a situation like I was in growing up. I want to be financially self-sufficient and see my money work for me,” recalls McCardell, 34, who specializes in advising college sports coaches. His team manages total assets of $3.3 billion.
Staley was raised poor in a low-income Philadelphia housing project. By dint of her talent, she built up substantial savings by the time McCardell became her advisor in mid-2009. She had recently left Temple University as the winningest women’s basketball coach in the school’s history to join the University of South Carolina as head coach of their women’s team.
“For the first time, Dawn needed to monetize the success she achieved as a player and a coach. She was in a position to create some significant wealth. But it was a major shift for her,” McCardell points out.
Staley had been a conscientious saver, accumulating assets in retirement plans as a WNBA player and during her years at Temple. Though she’d already chalked up an impressive coaching career, McCardell emphasized to her: “Coaching is a cutthroat business. Sports coaches are only as good as their last season. So planning for tomorrow is critical. If [a coach’s] team has two bad years, they could end up losing their job and working at a school where they aren’t paid as much. So you may not have a chance to monetize your success again.”
Staley’s early economic background made her fairly risk-averse, according to McCardell. Consequently, one of the key investment vehicles he established for her was a personal defined-benefit plan. It allows her to save a large amount for retirement on a pretax basis.
“How my future will play out is in John’s hands,” Staley says. “He’s done a good job of building trust. I’m always bouncing opportunities off him that come my way. More often than not, he thinks they aren’t great things to do. Those are the layers of defense he is for me.”
One key commonality that Olympic winners bring to the investing table is an understanding of the value of discipline and coaching – in this scenario, financial coaching.
Medalist Bill Schmidt, a generation ahead of Staley, is no exception. He won a bronze for the javelin throw at the 1972 Munich Olympics and remains the only American to medal in the event – throwing an 8-foot, 1-pound 12-oz. spear – in the last 64 years, according to his Wikipedia page.
In Schmidt’s second act, he used his Olympian focus and discipline, not to mention a love of sports, to build a career as Gatorade’s VP of worldwide sports marketing – signing Michael Jordan as spokesman was a major coup – and 15 years later, as CEO of Oakley Inc., the sports equipment and sunglasses maker.
Along the way, Schmidt, 68, also was sports director of the 1982 World’s Fair and sports VP for the 1984 Los Angeles Olympics.
A Merrill client since 1983, he became a client of Chicago-based Robert Schuldt during the depth of the financial crisis. The advisor had taken over his account from other FAs who left the firm.
“I try to get my clients to outsource their worries to me,” says Schuldt, 45, senior VP-wealth management, with AUM of $245 million.
In November 2008, Schmidt had cause to worry indeed: The value of his account had been “cut in half,” he says, in the interview. At the time, he was on a three-month ocean cruise around the world.
“A good scotch and a good cigar” helped quell his anxiety, he says. But it was advisor Schuldt that provided the most calming influence – even though, without phone service, the two could communicate only via email.
“Bob talked me off the gangplank!” says Schmidt, half joking.
A coal miner’s son from the Pittsburgh suburbs, he and his brothers held backyard “Olympics” games using, for example, a bowling bowl as a shot put and handing out imaginary gold, silver, bronze and tin medals.
When Schuldt took over managing Schmidt’s investments that turbulent autumn, the first order of business was to create a strategy and financial plan to get his portfolio back on track.
In addition to becoming his investment advisor, “I began to manage Bill’s wealth by looking at his whole financial picture of assets and liabilities,” Schuldt recalls. “He needed recovery in the market and a plan to come out of what happened to his account that would provide cash flow.”
Schuldt changed certain holdings but left others as-is because “the best thing was to hold on and let them come back up,” the advisor says.
He studied Schmidt’s balance sheet and recommended a few adjustments “to simplify Bill’s life.” The strategy included refinancing or selling some assets.
“That takes a lot of discipline, but Bill has it because it comes with being an Olympian,” Schuldt notes.
Schmidt has a mix of investments: annuities, stocks and bonds. His risk tolerance is moderate to aggressive, Schuldt says. He trades to a fair degree, yet carefully keeps an eye on his prime financial goal: to maintain the comfortable lifestyle he has in Knoxville, Tennessee. He moved there and launched Pegasus Sports Marketing, a consulting firm to Fortune 500 companies, a few years before Schuldt was named his advisor.
This year, Schmidt shuttered Pegasus, a source of supplemental income. Now, with no new revenue coming in, he is essentially living on a fixed income.
“It’s a mind-change and mindset change to be making investments to provide income. But,” he says, “That’s what Bob’s job is: Make money for me, Bob!”
At the same time, Schuldt helps Schmidt by determining annual spending limits, tax-adjusted for inflation, so that “he doesn’t outspend his money,” says the FA.
In monthly phone conversations, the two discuss activity in the account, and Schuldt makes recommendations.
Says Schmidt: “I’ve taken a more active role in my investing. I’d left everything up to other people who were supposed to be experts. I wish I had Bob 20 years ago.”
Schmidt’s retirement lifestyle goal, in addition to continuing to coach young people in the javelin, is “to do things that are fun, and I’m able to talk to Bob about that as I go forward,” he says.
Schmidt sees parallels in investing to becoming an Olympic medalist:
“Dream big. But understand that it’s not going to happen on its own. You’ve got to have a strategy and a plan to make it work. It’s no different with financial planning.”
Just so, advisor McCardell employs similarities between coaching and goals-based investing in advising Staley.
“Coaches are extremely goal-oriented. As a player and coach, Dawn is very goal- and process-driven. As an advisor, if you can put investing in terms of goals and objectives, just like a coach’s daily work, it can be a very prosperous and beneficial relationship for everyone.”
— Related on ThinkAdvisor:
- Duke’s Coach K: Lessons on How Advisors Can Build the Best Teams
- How I Met My Client: Charles Barkley