Monday, July 18, 2011
Inside the world of Fields' financial adviser
By Mark Doman (as told to Jared Zwerling)
When Mark Doman was 15 years old, he interned for a prominent basketball agent, Curtis Polk, who told him, "Whatever you do, kid, don’t count on working in sports with athletes. Get a real job, get a real education -- but if you get to work with athletes, that’s icing on the cake." Doman followed that advice to a tee. More than 10 years later, after interning for other agents, a major agency (Octagon), the Boston Celtics, the NCAA legislative body and NFL Players Association, he landed a position at a private wealth management firm in midtown Manhattan, where he advised pro athletes on their investment portfolios. Since January 2010, Doman, 33, has served as a Senior Vice President of True Capital Management, a firm that specializes in investment advice and financial planning for high-net-worth individuals, entertainers and approximately 150 NBA, NFL and MLB players, including the Knicks' Landry Fields. Doman, along with his team in New York, handles the day-to-day services of about 50 of those 150 clients.
Doman took time out of his busy day at True Capital's New York office (the firm's headquarters are in San Francisco) to provide ESPNNewYork.com with an exclusive behind-the-scenes look into his work with local pro athletes.
10 Things You Should Know About My Job
What are we really talking about when we're managing money for pro athletes? What they really are is the equivalent to identifiable lottery winners. What I mean by that is when you talk about somebody who's won the lottery, we're talking about instant wealth; not accumulated through years in the business world. The only difference is that we can identify athletes at an early age. What's so different about managing money for a pro athlete versus a regular high-net-worth individual is that your typical millionaire is in their 40s, 50s, 60s. Pro athletes are in their early 20s. I’ll give you my saying: These pro athletes have the earning power of someone who's in their 50s or 60s, they have the retirement concerns of someone who's typically in their 60s or 70s, but they're in their early 20s. So the financial planning is almost more important early on than the investing.
The key with my job is really about teaching them perspective. It's very hard to explain to a 23-year-old with a $1 million in their bank that buying 10 flat-screen TVs might not make the most sense, if that million has to last them the next 50 years. Their perspective can be distorted. I'll give you two ways that there's a lack of perspective. One is a lack of perspective as it relates to the amount of money they have versus how long it'll last him. Two, further distorting their perspective is that they compare themselves against the other guys in their locker room; not against other people outside of sports. The minute they walk through that player's parking lot and they see the proverbial car show going on, they lose all perspective on what is "normal."
So what do I do day to day? First, I want to make it clear that without my team, my work would be impossible. Every day, I'm responsible for handling the day-to-day financial needs of my clients, which requires constant communication with the entire team. Every day, we review their investment portfolios and make sure we understand what's going on in the financial market. We believe in preparing for the long-term, not trying to make a quick buck. The next step is we spend a lot of time doing financial planning for them and showing them different ways of gaining perspective on their money. We show them how purchasing decisions affect their long-term outlook. By handling their bill paying when requested, we help them better identify what they need versus what they want. For the rookies, we go in long before they get their first paycheck and we create a financial plan around what their projected income is during the life of their rookie contract and we do a cost-of-living analysis based on the respective city they're living. We handle housing, cars, family obligations. We build a financial plan around that and then we're constantly adjusting and refining that plan based on reality. With all of these responsibilities, you can see how important a team approach really is.
I work hand-in-hand with agents to make sure our clients are financial secure during their entire lifetime. An agent, or contract adviser, is an integral part of an athlete's life. My goals are the same as theirs in the sense that I want the athletes to have money for their entire lifetime. I step in and help with their long-term financial planning; agents must think more short-term to maximize the athlete's earning power. That's why I decided to do what I do. Their athletic abilities is what gives the athletes the opportunities to earn this money, but they need guidance for life after sports. Sports can be three to 10 years of their life, but then their post-athletic career is typically 40 to 60 years. It's that part of their life that I'm really concerned about planning for.
I've used this lockout as an opportunity as a catalyst for getting guys to say, "What am I going to do after sports?" Some of them have gone back to college to finish their degrees; some of them have gotten internships in real estate, financial planning and insurance planning. One of my clients, the Broncos' David Bruton, is substitute teaching in Ohio. In terms of the financial planning for the lockout, over the last year we required every client to create a separated savings account entitled "lockout savings." We required each client, based on their personal budget, to put away up to one year of living expenses. We created a budget that would allow them to have the liquidity if the lockout was prolonged without interfering with their investments. Although you hear about a lot of guys who are going broke, my clients are so well prepared for the lockout that not one of them is concerned about making it through it. However, the rookies are in a tough spot. Essentially they have to continue living like college kids until they get that first check. Some of them had to move back home with their parents. Only the top-tier rookies are being taken care of well by their agents and earning off-field money by the way of signing autographs for the card companies, doing appearances and things of that nature.
Players are all very well aware of how many go broke after retirement, but it's amazing that despite their awareness of it, only a few of them take the steps necessary to protect themselves. So the question is, why do three out of four NFL players go broke within two years of retirement, and three out of five NBA players go broke within five years of retirement? There are a variety of reasons. The first two reasons relate to perspective, which I mentioned earlier, and then the third reason relates to athletes' being overly generous by helping some of the people who helped them get to this point. I'm very supportive of them helping their family, but the key is to manage the process effectively to ensure their loved ones’ well-being as well as their own. Our job at my company is to show them how to balance their expenses, which includes taking care of their loved ones to ensure their lifestyle is financially secure beyond their athletic career. You'd be surprised, a lot of guys who end up going broke, it's not because they're out at the club popping bottles. Providing support to their family is not a bad thing, but it cannot be done piecemeal; they must have a plan in place for how to best help their loved ones. We manage the families as well depending on the circumstances.
Our fees are very competitive and standard across the industry. We charge a percentage on assets we manage and a fee for financial planning. If you want me to just buy and sell your stocks and bonds, it's one fee. If you want me to buy and sell your stocks and bonds, and you want me to find an apartment and buy a car for you and pay your bills and find what the best TV is for your money, those are separate fees.
All of our new clients come from word of mouth and referrals. You'd be surprised, we spend very little time doing any recruiting or business development. It literally boils down to, "Hey, you should meet my teammate." The locker room is a small place; everyone knows each other. That's how it builds. I don't constantly ask these guys, "Hey, do you have anyone you can recruit for me?" It's always been, "Hey, what do you think about them as a person? Do we want this person to be a part of this family?" I really look at the group of young men that I work with as a family because that's the only way, frankly, that I can do all the extra stuff that isn't in my job description and dedicate the hours that I dedicate to guys like Landry. I put in 13 to 15 hours a day with my clients. If I'm dealing with a guy who's a troublemaker, that inevitably takes away time from my clients who deserve it. For me, the only way I really make this a profitable business if I work with these guys for 10, 20, 30 years. Of that 30-year relationship, they're a pro athlete for only a fraction of that time. So what does it mean? It means that I better like these people as human beings; not just as athletes.
I'm hoping in the future that I'm one of the guys who the leagues invite to speak to the rookies. While the rookie transition programs in the NBA and NFL do a pretty good job of educating these guys, they typically don't invite in folks from the private side to talk at those events. I actually spend a lot of time with my clients before those transition programs, so when they attend they're already familiar with the messages discussed there.
The biggest perk of my job is that no two days are alike. Every single day brings a lot of new challenges to me and the team at True Capital. Also, I become personally and emotionally invested in each client because I'm intimately involved in every detail of their life off the field or off the court. When you get to that point, you really start to care about these folks. And the other thing I love is because I become so personally and emotionally invested in it, it makes me work harder. We look at our clients like family because they depend on us to steer them into their life after sports. It's a huge responsibility and we all become very close. The challenge is to make sure with all this hard work that I'm not neglecting my own family. My wife, Laura, has the patience of a saint; she understands what we're building at TCM and the effort involved. One of the more humbling moments of my job was when I told my clients that I got engaged in March 2010 to be married. I think I told them on a Wednesday and by Friday, almost 20 active NFL players that I work with flew to New York to surprise me for an impromptu engagement party. That was just unbelievable. They all, through me, have gotten to know each other better. I constantly refer to my clients, my business partners and administrative staff as family.
For more about how Doman worked with Fields to prepare him for the lockout, click here.