Red Flags: How to Spot a Bad Financial Advisor
Choosing a financial advisor is one of the most important decisions you’ll make with your NIL earnings. The right advisor can help you grow and protect your money. The wrong one can cost you thousands — or even your entire financial foundation.
Spotting red flags early will help you avoid costly mistakes and protect both your wallet and your peace of mind. Here’s what athletes and parents should watch for when evaluating a potential advisor.
1. They Dodge the Fiduciary Question
Why it’s a problem:
A fiduciary is legally required to act in your best interest. If an advisor won’t clearly say “Yes, I am a fiduciary at all times,” they might be free to recommend options that benefit them more than you.
What to do:
Ask directly: “Are you a fiduciary 100% of the time when working with me?” If the answer isn’t clear and confident, move on.
2. They Can’t Clearly Explain How They Get Paid
Why it’s a problem:
Hidden fees and unclear compensation structures can eat into your earnings. Some advisors avoid discussing costs until after you sign paperwork.
What to do:
Ask for a written breakdown of all fees — AUM%, flat rates, commissions, product costs — before committing. Transparency is non-negotiable.
3. High-Pressure Sales Tactics
Why it’s a problem:
If an advisor is pushing you to sign immediately or to buy a product before you fully understand it, that’s a warning sign. Good advisors give you time to think and encourage questions.
What to do:
Walk away from anyone who says “This deal expires today” or “You have to act now.”
4. They Promise Unrealistic Returns
Why it’s a problem:
No one can guarantee investment performance. Advisors who promise high returns with “no risk” are either inexperienced, dishonest, or both.
What to do:
Expect realistic projections and discussions about risk, not empty promises.
5. They Avoid Questions About Their Background
Why it’s a problem:
Advisors with past complaints, disciplinary actions, or terminations may try to gloss over their history.
What to do:
Check their record on FINRA BrokerCheck and SEC IAPD. If you find issues, ask them to explain — and see if their answer matches the official report.
6. They Don’t Have NIL Experience
Why it’s a problem:
NIL income is unique. It’s often irregular, multi-sourced, and tied to compliance rules. An advisor without NIL experience may overlook key tax issues or contract considerations.
What to do:
Ask about their work with other athletes or clients with unpredictable income.
7. Lack of Communication or Accessibility
Why it’s a problem:
If they take weeks to respond before you’re a client, it’s not going to improve after you sign on. Financial planning is a team effort — and you need a partner who’s available.
What to do:
Clarify how often you’ll meet, how quickly they respond to messages, and who you’ll communicate with (the advisor directly or a junior team member).
8. They Push Products Instead of a Plan
Why it’s a problem:
Your financial strategy should come first. Advisors who lead with selling insurance, annuities, or investment products — without discussing your goals — are often product-focused, not client-focused.
What to do:
Insist on seeing a written plan before committing to any products.
The Bottom Line
A good financial advisor will be transparent, communicative, and focused on your goals — not just their own paycheck. By watching for these red flags and asking the right questions, you can protect your NIL income and build a relationship based on trust.
Looking for trusted professionals? The NIL Financial Advisor Directory connects athletes with pre-vetted advisors who understand the unique challenges and opportunities of NIL earnings.