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An RIA's Mission to Be a Household Name, at Least to Professional Athletes

“We believe that what we do for the athletes is second to none.”

A lot of RIAs establish a brand, grow, and end up working with a couple super wealthy families or flashy clients, such as professional athletes.

MAI Capital Management is doing somewhat the opposite.

The first incarnation of the Cleveland-based RIA that manages more than $7 billion began working with professional athletes when it was founded in 1973. It was affiliated with IMG (now Endeavor), the global events, marketing, and management firm and shortly after separating from IMG, MAI Managing Partner Rick Buoncore bought the business in 2007.

At the time, more than a quarter of the RIA’s clients were athletes and other professionals more recognizable than a typical wealth management client. MAI still works with those people and more. “From a competitive point of view, I don’t think there is anyone better than us,” Buoncore told RIA Intel.

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But without some online sleuthing and connecting the dots to IMG, it wasn’t obvious that MAI had, perhaps, as rich a history working with athletes as any independent RIA.

To resolve that, the RIA said Wednesday it was “officially launching” a dedicated line of business called MAI Sports + Entertainment. The unit, which is effectively a multi-family office, will have more than 25 employees and be led by Managing Directors Steve Trax and John Palguta.

At a high level, formalizing MAI Sports + Entertainment will do a couple things, Buoncore said. It’s an important step in elevating that part of the RIA. MAI wants to be a sort of household name amongst athletes and others; a company every person thinks they need to call and at least consider as a wealth manager as they sign their first contract to pitch, act, or model.

Defining that part of the business will also help assure other clients that no celebrity or VIP (whether actual or in the eyes of MAI) is taking away needed attention from them. The idea that advertising an RIA as one catering to athletes will help bring in other clients can backfire, according to Buoncore. Most clients don’t care much about who the others are, they just want to be cared for.

“Some people love the fact that you work with athletes and some people don’t. Every client segment will feel like they have a team dedicated to them,” he said. 

MAI Sports + Entertainment might also get the attention of like-minded RIAs who might consider joining it. 

Trax was not considering selling or merging his RIA, MTX Wealth Management, but after an almost two-year courtship, he couldn’t pass up the opportunity to join MAI last year. The decision meant improving investment management and service for his clients (including many athletes) and his employees. All of his colleagues at his Reston, Va. firm joined him at MAI.

It was a meeting of the minds when it came to helping athletes and other clients. Those clients don’t just have tax headaches from working across the U.S. or aboard, schedules that require bills to be paid for them, and other white-glove services. They are often young and need and want help understanding personal finance without condescension. Advisors must understand the unique challenges that come with their profession and sometimes be their protectors.

“There’s only a handful of people in the industry, in my opinion, that really get it,” Trax said.

A rookie mistake some advisors make with athletes is not properly acknowledging and planning for the day when the big pay checks stop coming. That day might be tomorrow, so MAI stresses investing for the long term while cautiously allocating capital to illiquid investments.

But it doesn’t suck all the fun out of big paydays. MAI has clients who “like to indulge themselves.” As long they do it within reason, they're happy to have them as clients.

Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.

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