The NFL Players Association has resumed accepting applications for financial advisers to be certified in its program, under new rules that require more experience and a more stringent background check.
“The program had been on pretty much a hiatus for about three years,” said Dana Hammonds, NFLPA director of player services and development. “We are relaunching the program, and we are opening up the program to new advisers.”
The NFLPA has about 350 financial advisers who were already part of the program, Hammonds said, and a waiting list of about 750 seeking to become certified.
The fees to become NFLPA-certified have increased, from $1,500 to $2,500 for the first-time fee and from $500 to $1,500 for the annual renewal fee. “The fees are going up to reflect the fact that we have gone with a new background and security investigation firm that is doing a much more comprehensive background investigation,” said NFLPA general counsel Tom DePaso.
The changes follow lawsuits by a number of NFL players against financial advisers as well as media reports about NFL players retiring broke in recent years. Earlier this year at its annual meeting, the NFLPA Board of Player Representatives voted to restart the program with stricter rules.
“We at the NFLPA are committed to protecting our members in as many ways as possible; these requirements are our latest effort to do so,” NFLPA President Domonique Foxworth wrote in an email.
The NFLPA sent a notice to NFL agents late last month, reminding them that any agent offering financial services must be certified in the program. Additionally, it is a violation of the NFLPA rules for agents to refer player clients to financial advisers who are not certified in the program.
Registration for new financial advisers began Aug. 1, and the deadline for all applications is Nov. 1. The process will repeat next year.
Licensed financial planners, estate planners, investment advisers, broker-dealers, accountants and insurance agents are eligible to be part of the program.
The new requirements include:
n Eight years of licensed experience (increased from five years).
n A minimum of $4 million in professional liability insurance (there was no minimum previously).
n Must indemnify the NFLPA against any lawsuits a player might bring against them.
The NFLPA was sued by six former NFL players when a financial advisory firm they had invested money with was shut down by the Securities and Exchange Commission several years ago. But that lawsuit, Atwater v. NFLPA, was thrown out by an appeals court in 2010.
Hammonds acknowledged that some of the existing financial advisers may not want to be part of the program because of the stringent new requirements. Although she believes all of them meet the requirement for years of experience, some may not have enough liability insurance. Additionally, one of the new requirements is that any adviser who has direct access to a player’s funds be a qualified custodian under SEC guidelines.
Whether some financial advisers remain in the program may be “a business call” for them, Hammonds said.
One financial adviser now in the program, who spoke on condition of anonymity, said he is trying to decide whether to reapply under the new guidelines. “It’s expensive,” he said, “and it means more paperwork.”
