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One Morgan Stanley exec is changing the way athletes think about their money
Drew Hawkins
Drew Hawkins

(Wall Street Week)
Drew Hawkins.

We’ve all heard the story—A star college athlete gets drafted, gets a big check, buys a bunch of stuff, takes on a lot of debt, has a career ending injury, and files for bankruptcy.

It happens time-and-time again.

Stats show that one-in-six NFL football players will file for bankruptcy after they retire.

But one Morgan Stanley executive has been leading the way in helping athletes and entertainers change the way they think about their money.

Drew Hawkins is the global head of the bank's Global Sports & Entertainment division—a new division within Morgan Stanley's wealth management arm that launched in 2014, and currently manages around $32 billion in client assets.

The division has approximately 80 financial advisors, known as sports and entertainment directors, located across 21 cities.

"As we look at the athletes and entertainers, it's dramatically different as it relates to their needs," Hawkins told Business Insider. "They have uncertainty around their income as it relates to how much they'll make and there's big disconnects in the longevity of their careers.">

The average career of a pro football player is around three-and-a-half years. A pro basketball player is four-and-a-half. And a pro baseball career tends to last for about six years.

A major uncertainty is the very real possibility that an athlete could get hurt and end their career.

There are also other challenges that come with being a pro athlete. For example, there's often pressure from family members asking athletes asking for money. The players also don't have consistent pay schedules. Football players, for instance, get 17 weeks of paychecks per year, so they have to plan for the off-season when money isn't coming in.

Then, there are taxes and the amount a player sees on the contract looks dramatically different after paying taxes.

Because of these factors, these individuals have to think about their money in a different way. More importantly, they have to plan early on for a future after pro sports.

"There's a host of things we do differently for these individuals," Hawkins said. "We are very aggressive as it relates to the amount of money they should be saving. We're far more conservative assembling their portfolios to get through that next contract."

Starting early

Morgan Stanley's GSE group has recognized that they need to start educating athletes earlier in their careers. To do this, Hawkins' division started a financial education initiative in conjunction with PwC.

The program brings former pro players, working as consultants to GSE, to college campuses and speak with the athletes about financial literacy.