Financial services enter recruiting playbook for college athletics

When No. 3-seed LSU takes on the No. 2-seed NC State in Friday night's women’s NCAA college basketball tournament on ESPN, financial planner Dany Martin of the advisory firm WFA will keep a close eye on LSU’s standout sophomore guard Mikaylah Williams.  

“She was the number one prospect in high school, and she met with us when she was in 10th grade, and that was in 2020 or 2021,” Martin told InvestmentNews. “That was when the NIL space became available and she got her first deal, and we’ve just learned with her the last three or four years.” 

Martin is a partner at the Shreveport, LA-based WFA, which has about $500 million in assets under management and is part of the registered investment advisor RFG Advisory. About five to 10 athletes have joined WFA as clients in the past couple of months, but perhaps none are bigger stars than Williams, who was last year’s SEC Freshman of the Year and has secured NIL deals with Nike’s Jordan Brand and Gordon McKernan Injury Attorneys. 

Since the NCAA started allowing student athletes to be paid for their NIL (name, image, and likeness) in 2021, financial services have become part of the playbook leveraged by schools to attract top athletes to their programs. Michael Haddix Jr. is the founder of the RIA and fintech startup Scout, whose financial management app is used by 5,000 athletes across more than 20 colleges including UCLA, Auburn, Iowa, Tennessee, and DePaul. 

“We don't charge the athletes, so the schools are paying on their behalf. Like an employee benefit, when you get a 401K from a company, that's sort of how we position it,” says Haddix Jr, who played basketball at Siena College before becoming an investment banker at Goldman Sachs and Lazard. “When a player is going to a school or thinking about a school, a lot of them think about money. We provide this really unique money experience; the school uses it as a sort of player experience. In the same way if you have a locker room or great facilities, you want to provide this support as well.” 

Haddix Jr also previously worked at a family office unit within Octagon Financial Services, which managed $1 billion AUM for star NBA players such as Steph Curry, Chris Paul, and Devin Booker. His father Michael Haddix played eight NFL seasons as a running back for the Philadelphia Eagles and Green Bay Packers in the 1980s. 

Morgan Stanley’s Global Sports & Entertainment division launched its Money in the Making program in 2023 to deliver financial education services to athletes across NCAA schools. 

“We can meet you wherever you are in delivering the education, but also from a client standpoint we have various channels,” Morgan Stanley's Head of Global Sports and Entertainment division Sandra L. Richards, told InvestmentNews. “We have our E-Trade platform, our virtual client solution piece; our advice-led channel from our private wealth management division.” 

College athletes are paid as 1099 contractors. Firms like Scout and WFA will help their clients with tax filing and preparation, setting up accounts for investing, retirement, and savings, and financial planning for their careers beyond their college days. Some college athletes are making from six-figures annually to millions of dollars per year in NIL deals. Texas quarterback Arch Manning has the highest NIL value at $6.5 million, per On3.  

“When you think about these athletes and the money that they make, people overlook the fact that 30% to 40% of that money is not theirs,” said Haddix Jr. “If you're an athlete, you need to file taxes in the state you earn income which is usually where the school is and your home state, which is usually where you're from, and what's on your license.” 

College athletes also receive monthly cost of living expenses and meals and travel expenses paid for by their school or NIL collectives.  

“We try to encourage the kids to just live on $2,500 a month in college,” said Martin. “The level of athletes that that we have worked with, pretty much 30% to 40% needs to be saved, and 60% needs to be discretionary. The 40% really is to protect themselves from taxes and have enough to maybe contribute to a retirement account, a SEP-IRA or something of that nature.” 

In Louisiana, where WFA is based, lawmakers have introduced legislation to exempt NIL money from state income tax which if passed would help attract top athletes to high schools and colleges within the state.  

WFA hired former NFL player Brandon Wilson and veteran sports broadcaster Rashad Johnson last year to boost their financial services to athletes. WFA’s other clients include freshman offensive lineman Devin Harper at Ole Miss and incoming Texas running back James Simon. Harper and Simon are from Shreveport, and both are still in high school. 

“We had a 10th grader in our office two weeks ago, a highly recruited football player. We're trying to focus on the high school and first- or second-year college athletes and then growing with them for the next five to 10 years,” said Martin. “If we take care of some of these athletes really well, and they're sitting in the locker room a year from now, and someone goes, who handles your stuff? They can, in that moment, go, ‘Oh, I've been working with these guys for two or three, four years, and you should call them.’”