A managing director at Morgan Stanley, Drew Hawkins is also the head of Morgan Stanley Global Sports & Entertainment, a new wealth management division focusing on athletes and entertainers.
Q: What’s the origin of this new global sports and entertainment group?
It’s long overdue within our industry. Athletes and entertainers are not your typical client. They have things related to their finances that are unique.
Does the division have a particular focus?
We have done more with some of the larger sports—basketball, football, baseball. But we also do a lot with golfers, tennis players and those playing soccer and rugby. We’re seeing a lot of opportunity with international basketball and players that go overseas and still make a million dollars a year.
How did you get involved in this space?
Through a football player’s wife, at an event. She said, “I’d love you to come in and spend some time with my husband and me.” The player really wanted nothing to do with his finances. The answer to almost every question I asked him was, “Ask my agent.” Well, at the end of your career, when your agent is long gone….
What financial issues are most common among athletes?
Many have short, spotty careers—the average NFL career is three and a half years. And around four years after their career is over, something like 80 percent of football players are either broke or filing for bankruptcy.
How is that possible?
You have this huge spike in income but it’s gone in an instant. You buy a car, you make a bad decision about a home, in some situations you’re taking care of immediate and extended family.
Once you’ve landed these folks as clients, what services or products are different than what a white-collar client receives?
One example: When you think of folks in entertainment and sports as it relates to injury, we didn’t have a detailed disability offering. So we were able to come up with 19 meaningful disability products.
Concussions have become a huge problem in professional sports—is that an issue in financial planning?
We do think about that as we look at athletes’ longer term plans and how that may impact their ability to work.
What about musicians and actors—what are their challenges?
Selling CDs or records is a thing of the past. Streaming has taken over and musicians now heavily derive their income from touring. So revenues could be off 50 to 75 percent if you’re not going from town to town singing each night.
Some athletes and entertainers may not feel comfortable coming to a Manhattan skyscraper to meet with white guys in dark suits. Does it help that you and retired athletes Antoine Walker and Bart Scott, who are consulting for you, are African American?
At the end of the day, it’s all about people feeling comfortable with the quality of representation and the individual. But does that go through the heads of some when they see us walking in? Probably.
So will financial advisors have to change things like office decor or the way they dress to reach these potential clients?
Definitely. In the 26 years that I’ve been in this industry, there were very seldom times that I would think of going into meeting or traveling and not having a full suit and tie. There are now plenty of times where you actually put yourself at a disadvantage by dressing like that.
Last question: What do you think of HBO’s Ballers?
(Laughs) I had an opportunity to watch that show last night and I’ve got to tell you, Dwayne Johnson gave some good advice to one of the players he represents. He talked about the importance of saving, about being able to say no, about discipline around the lavish spending. I was impressed.
For more information, contact Drew Hawkins at 202.862.9150 or drew.hawkins@morganstanley.com
