Kristin McLauchlan, chairman and CEO of Legacy Trust Family Wealth Offices, works not far from the 17th hole at TPC Sawgrass, a hole that symbolizes professional golf. Some of her firm’s 55 client families are involved in the sport. Managing their money often involves changing the way they think about it.
Golf is such a mental game, and our objective is to handle everything that we can for the players — their estate and tax planning, insurance, bill paying, family foundation — so they can focus on what they do best.
Managing their wealth involves a plan, and planning often requires a psychological conversation. Understanding risk is a golfer’s biggest obstacle. Pros don’t compete every week thinking they are going to get hurt. They think they will win. Their paychecks depend on what their bodies can do.
If injured, they still need to support their family. Wealth planning positions them to play longer. By saving for a plane lease, for instance, they can avoid putting more hardship on their bodies.
They often say, “Not with this paycheck. I can buy the fancy car now. I’ll save the next check.” It’s similar to what the rest of us feel about putting our raise in savings. Golfers’ paychecks are not as consistent, so saving is more of a psychological hurdle.
Because golfers don’t have teammates, it’s very difficult for them to control the ego. Each needs to feel that, “I am the best person out here.” At the same time, the reality is that they won’t win every week. They need to mature a little bit to where they can plan for future wealth.
A seasoned golfer may have a lawyer, a certified public accountant, an agent; we are the quarterback for those advisors. We have no conflict because our client pays us a fee, and as a fiduciary we are bound to serve in his or her best interest. We often handle paying an athlete’s entourage: the trainer, nutritionist, psychologist, swing coach, putting coach and friends who are hangers-on. A lot has changed from the days of Jack Nicklaus and Arnold Palmer.
When a winning golfer holds an oversized check for seven figures, he or she is not going to bank that whole amount. A million does not go that far. The money goes out as fast as it comes in. One bonus is that the bigger the windfall, the more sponsors pursue you to pay you to endorse their product. You don’t have to beg them anymore.
The stakes in professional golf are so competitive and wealth planning can be so convoluted that having someone to look over your shoulder is more important than ever.
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