A proposed cap on agent fees for college athletes would leave much larger financial risks unaddressed, including the near-total absence of anyone with a legal duty to protect a young athlete's long-term financial interests once a deal is signed.
The Protect College Sports Act, introduced in Congress, would cap agent fees at 5%, but Kirk Loerwald, a partner at SAX Wealth Advisors who leads the firm's Athletes & Artists division, has told InvestmentNews that the provision addresses only a fraction of what young athletes are exposed to financially.
"The agent fee is one cost among many. Capping it does nothing about tax planning or financial education, and nothing about the wide range of what athletes get charged everywhere else," Loerwald said. "There's also a fair question about whether the cap does what it intends. If the same bill limits how often an athlete can transfer, their leverage drops and you start to wonder what they're paying an agent to do at all. Every other professional league built structure around the money first. College sports created a professional compensation system with none of the professional systems to support it."
Many athletes begin signing NIL contracts while still minors, often before they are legally able to make binding financial decisions on their own behalf.
Loerwald said the risks for a 16 or 17-year-old differ meaningfully from those facing a young adult, since a minor can be locked into terms that follow them for years before they have any say in the matter.
He pointed to exclusivity clauses, privacy terms and brand tie-ins as the kinds of commitments that are hardest to walk back later, and said the central issue is often whether the adult signing on a minor's behalf actually understands what is being agreed to.
Asked who currently holds a true fiduciary duty to protect a young athlete's long-term financial interests, Loerwald was direct.
"The short answer is no one," he said. "A parent may have a duty to their child but often isn't equipped to manage the financial side. An agent is obligated to bring the athlete the best deal, but the job ends once the transaction closes. In a lot of cases, it falls to athletic departments or individual coaches to give financial direction they aren't equipped to give. Each advisor's role, and their conflicts of interest, should be laid out plainly so there are no blind spots."
Loerwald said Congress could strengthen the legislation with two additions beyond the fee cap.
"I'd add two things. First, an independent review of NIL contracts before they're signed, so someone is actually reading the terms on the athlete's behalf. Second, a financial literacy requirement paired with credit monitoring before any money changes hands," he said. "The fee cap controls one number. These would put some structure around the athlete before the money arrives, which is usually where the trouble starts."
On how families should navigate the various professionals in an athlete's orbit, agents, financial advisors, attorneys and accountants among them, Loerwald said the key is understanding which relationships are transactional and which are meant to be ongoing and advisory.
He noted that families often gravitate toward whichever professional they feel most understood by, an instinct he called understandable but not always the one that produces the best outcome once conflicts of interest are factored in.
Without disclosing confidential details, Loerwald described a consistent pattern among the young athletes he has worked with.
"The biggest pattern is simply inexperience. Sound financial decisions come from a combination of education, real-life experience, and trusted advice," he said. "Young athletes are being asked to make complex financial decisions years before most of their peers, often without the benefit of those three things. The consequences can be serious, and they often play out in a very public environment."
Asked whether financial protections for college athletes are likely to strengthen over the next five years, Loerwald was measured in his optimism.
"I believe the highest-earning athletes will continue to have access to experienced financial advisors, attorneys, and CPAs. My concern is for the much larger group of athletes who won't have those resources," he said. "Unless additional guardrails or educational requirements are implemented, responsibility will continue to fall primarily on families and private advisors, creating very different levels of protection across college athletics."
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