Last updated on July 3rd, 2019 at 07:17 pm
Jannsen + Company, an accounting and business resources firm based in Pewaukee, has forged a partnership with the Milwaukee Admirals Hockey Club as part of its growing initiative to coach athletes in wealth management and tax obligations.
According to Jannsen + Company president Terry Jannsen, athletes, particularly those in minor leagues earning a more moderate level income, represent an “underserved” sector in wealth management. Jannsen + Company, which serves clients in accounting, information technology, wealth management, human resources and payroll processing, has been directing more attention to athletes over the past 18 months.
“Many times you’re dealing with young people who don’t know how to manage money and don’t realize the implications of having that money,” Jannsen said. “It’s a completely foreign concept to them.”
According to Jannsen, the company’s emphasis on wealth management for athletes stems from a recent surge in press coverage of athletes facing financial trouble and the statistics of athletes who end up broke after their careers. Jannsen cited statistics released by Sports Illustrated, such as the fact that 60 percent of NBA players and 78 percent of NFL players go broke or experience major financial distress within two to five years of retirement.
“If they just had some proper counseling and advice on the front end, they wouldn’t have to be part of those statistics,” he said.
Much of the challenge for athletes revolves around the large sums of money they receive in a short span of time, Jannsen said. Typically, athletes’ careers end during their twenties and thirties, so their retirement spans much longer than other professionals.
“Money comes to them quickly versus coming to them over a lifetime,” Jannsen said.
While Jannsen + Company tailors its services to individual athletes just as it does to every client, it primarily serves its athletic clientele with a wealth management component and a tax education component.
“We can marry those two services under our roof,” Jannsen said.
Within the realm of wealth management, Jannsen + Company focuses on 10 different financial factors, including insurance, investments and estate planning. The company also consults athletes about their goals, budgeting and the ways they’re spending their money to ensure their habits are sustainable.
In terms of tax education, the company helps athletes understand obligations specific to them. For example, when an athlete plays a game or multiple games in a city, they owe state taxes and local city taxes. Part of their income is reported in the state they’re playing in and then taxed in that state.
Jannsen stresses that his company is in the process of building its athletic clientele. Jannsen + Company currently advises less than a dozen athletes and is targeting athletes at the minor league level as well as retired athletes. According to Jannsen, those athletes often need more help than the athletes who are making millions of dollars each year because it’s more difficult to make several hundred thousand dollars last a lifetime than millions of dollars.
But it can be done if managed properly, Jannsen said.
The company’s partnership with the Admirals, established within the past month after Jannsen approached the team, will create a voluntary round of small-group seminars Admirals players can attend to learn more about financing and taxes.
“We want to be able to help our players here to develop not only as hockey players but as young men who are starting their professional careers, their jobs, and starting those types of things now are things that will only make them more successful in the future,” said Jon Greenberg, president of the Milwaukee Admirals.
While Admirals players have access to financial planners through their players’ association, Greenberg said this is the first initiative of its kind the hockey club has offered players.
According to Greenberg, the program will be particularly useful for tax education. Players from Finland, Sweden and Canada belong to the team and face issues with taxes in their home countries, which Jannsen + Company will help break down.
The program will also benefit Jannsen + Company with exposure in the community through a corporate sponsorship of the Admirals, radio advertising and promotion at games.
Greenberg said Jannsen’s education efforts will be a very eye-opening experience for players, illustrating what could happen with their money if they don’t manage it properly and what will happen if they are successful in creating a sustainable budget.
“As fun as it is to make that kind of money, it can be very scary at the same time,” Greenberg said. n