Proposed federal legislation capping agent fees for college athletes at 5% would leave significant financial vulnerabilities unaddressed, according to Kirk Loerwald, a partner at SAX Wealth Advisors who leads the firm's Athletes & Artists division. The Protect College Sports Act, introduced in Congress, targets agent compensation but does not establish any legal obligation to safeguard a young athlete's long-term financial interests after a deal is signed.
Loerwald told InvestmentNews that the fee cap addresses only a narrow slice of the financial challenges athletes face. “The agent fee is one cost among many. Capping it does nothing about tax planning or financial education, and nothing about the wide range of what athletes get charged everywhere else,” he said. He also questioned whether the cap would achieve its intended effect, noting that the same bill restricts athlete transfers, potentially reducing an agent’s leverage and value.
Many athletes begin signing name, image, and likeness (NIL) contracts while still minors, often before they can legally make binding financial decisions. Loerwald emphasized that the risks for a 16- or 17-year-old differ from those for a young adult, as minors can be locked into terms that persist for years. Exclusivity clauses, privacy provisions, and brand tie-ins are among the commitments hardest to reverse, and the adult signing on the minor’s behalf may not fully understand the agreement.
When asked who currently holds a fiduciary duty to protect a young athlete’s financial interests, Loerwald was blunt: “The short answer is no one.” He explained that parents may lack financial expertise, agents’ obligations end once a deal closes, and athletic departments or coaches often provide financial guidance they are not qualified to give. He called for clear disclosure of each advisor’s role and potential conflicts.
Loerwald proposed two additions to strengthen the legislation: an independent review of NIL contracts before signing, and a financial literacy requirement paired with credit monitoring before any money changes hands. “The fee cap controls one number. These would put some structure around the athlete before the money arrives, which is usually where the trouble starts,” he said.
He advised families to distinguish between transactional relationships and ongoing advisory ones, noting that athletes often gravitate toward professionals they feel most comfortable with, which may not yield the best outcomes once conflicts of interest are considered. Loerwald observed a consistent pattern of inexperience among young athletes, who are asked to make complex financial decisions years before their peers, often without adequate education or trusted advice.
Looking ahead, Loerwald expressed measured optimism. He believes top-earning athletes will continue to access experienced advisors, but worries about the larger group of athletes who lack such resources. “Unless additional guardrails or educational requirements are implemented, responsibility will continue to fall primarily on families and private advisors, creating very different levels of protection across college athletics,” he said.
The debate over athlete protections comes as the wealth management industry grapples with similar fiduciary questions. A recent NAPFA codification of fee-only fiduciary duties underscores the importance of clear standards, while Cerulli data showing RIAs hold 27% market share highlights the growing role of advisory firms in setting best practices.
