Want to Work With NBA Clients? Try a 3 Bucket Strategy

The New York Times calls Joe McLean, chief growth and innovation officer at MAI Capital Management, a “sports therapist” in providing financial guidance and advice to star pro athletes. But he’d rather be thought of as their big brother.

Right now, he is building a clubby “locker room” environment around them where they can share their personal financial experiences, he tells ThinkAdvisor in an interview. “The clients get to know each other and [find] it beneficial [to] learn from each other. They have dinners together, play golf together, go to conferences together,” McLean, 48, says.

A former basketball player himself who played for the University of Arizona in the mid-1990s (see above photo) and later as a pro in Europe, he specializes in advising both athletes and folks in the entertainment arena.

On his client roster are stars like the NBA’s Isaiah Thomas and MLB’s Dexter Fowler, as well as, reportedly, the NBA’s Klay Thompson; NFL’s Jameis Winston and Whitney Mercilus; and MLB’s Nolan Arenado.

In 2014, McLean launched an advisory firm, Intersect Capital. This summer he merged it with registered investment advisor MAI. The combined assets under management total $14.1 billion, as of June 30, 2022.

McLean was seeking scale. Now, with MAI, he can “maintain a boutique feel” within a larger firm, he notes. There are 60 to 70 other MAI advisors throughout the country that serve pro athletes.

True to his title, he has some innovative ideas about “the future of advice,” which he sees as client and advisor enjoying “a co-piloting experience.”

In the interview, he also discusses his method of forcing his athlete clients to save money. If they don’t go along with that system, he fires them. The process is a way of getting them to “compete to save,” McLean notes.

He charges a management fee plus a retainer if his work includes serving a family office.

He once was a pro basketball player for European teams but “got cut 11 times in 11 countries,” he recalls. “I was pretty bitter.” However, after he started a new career as a financial advisor, several former teammates called for financial advice, and he was happily drawn back into the sports world.

ThinkAdvisor recently interviewed McLean, who was on the phone from his base in San Francisco.

“I grew up with posters on my wall of NBA players that I wanted to be [like] — Larry Bird, Michael Jordan and Magic Johnson,” he fondly recollects.

Here are the highlights of our interview:

THINKADVISOR: The New York Times calls you a “sports therapist.” Are you?

JOE MCLEAN: There are [client] transactions that take place almost daily, so it’s important to have a trusted relationship so people can share their hopes and fears and collectively get to the next milestone. There are extreme highs and extreme lows.

Just being there and not judging anybody but helping them and maybe just learn how we progress together.

A [player] said to me: “You don’t need to be my father anymore; you just need to be my big brother.” That means that over time they’ve matured and grown.

What’s the most challenging aspect of advising pro athletes?

Getting someone to think longer term when most of the time they’re not thinking past next Friday.

It’s understanding that the mindset of what has made an athlete very, very successful is not necessarily the same mindset or attributes you need to be a successful investor.

As an athlete, you’re willing to bet on yourself and spend an enormous amount of time before you succeed. You’re willing to take an extraordinary amount of risk to accomplish your goal.

Those characteristics quite often don’t make you a great investor. Now that you’re wealthy, you don’t need to take those types of risks. You don’t need to try to hit the home runs.

So sometimes it’s about tempering that enthusiasm to want to hit the next home run over night.

Please explain what you call “the future of advice.”

Partnering with a client and having a co-piloting experience vs. a traditional investment management-only relationship where you’re learning about somebody’s goals and then investing their money.

I truly believe that the future of advice in the industry is giving together, saving together and investing together over time.

What do you mean by “together”?

We have a shared platform where a lot of our clients know each other in what I call the networked client experience. The clients get to know each other, and we as advisors help facilitate that.

For advisors and then for clients, it’s sharing the same custodian, the same compliance [team], having one chief marketing team [and so on].

Please tell us more about the “networked client experience.”

The athletes are not necessarily sharing every detail of what they’re doing [financially], but a lot of clients have found it beneficial to share their experiences, so that everybody can learn from each other.

By what means do they share this info?

We have dinners together, play golf together, go to conferences together. We bring in thought leadership on different topics, like investing, giving and saving, and the [clients] are there, side by side, learning.

We also do it in-house. It’s important for all clients to know that it’s a collective team effort. That’s the “locker room” we want to help build around them.

Please explain the “locker room” concept.

When an athlete stops playing, it’s not necessarily the game they miss most. It’s the bus rides, the locker room, the sense of accountability. It’s the goal setting. When you stop playing, all that is gone the next day.

So if we can help build their professional locker room outside of sports and have other people for the athletes to turn to when they [go through] that transition, it makes it a softer landing than departing from sports and not having anybody to turn to.

You require that your athlete clients set aside 40% of every dollar earned in their first contract, 60% in their second and 80% in their third. If they don’t, you’ll fire them — and have done so. Please explain.