Why College Coaches Are Right to Be Skeptical of Financial Advice

I can't prove that college coaches are more skeptical than anyone else. But I can say this: being a college coach trains you to constantly filter.

It makes sense. As a college coach, you don't have unlimited time to research every new drill, recovery tool, lifting idea, recruiting platform, or "game-changing" concept that lands in front of you. You aren't anti-new-idea. You're anti-wasting-time-on-something-that-does-not-actually-work.

And frankly, half the new ideas shoved in front of coaches would look right at home on a bro-hack TikTok.

Yet if you hear about any of these new concepts from another coach, well that's a different story. There's a transfer of trust there. You're seeing or hearing things executed by someone else who thinks like you, who has similar responsibilities to you, and has deemed whatever you're looking at as practical and applicable.

I bring this up because I think there's nuance that gets missed when you simply say something like "college coaches are skeptical." To me, pure skepticism refers to a lack of trust without evidence, but it's not evidence that keeps you hung up in these scenarios, it's applicability. If your life mantra, whether purposefully or not, is to keep the main thing the main thing, and the main thing has been working for you, you don't have time to entertain and introduce new concepts into your life.

That bleeds into everything, and that's why coaches come across as naturally skeptical. Think about how often you get pitched on a regular basis: recruits selling you on why they'd be a great fit for your program if you were simply willing to fully fund their education, parents hyping you up about how little Timmy or Betty is the best athlete and student in their school, agents coming to you either representing students or trying to represent you, administrators trying to sell you on their vision, vendors trying to sell you new products, so on and so forth.

So is it any wonder you also have a healthy skepticism towards financial advice? After all, finances are simple, right? Save more than you spend? Contribute to your school's retirement account? Don't bet your kid's college savings on a hot stock? I mean sure, there's all sorts of complicated nuances and strategies that you might be missing out on, but you didn't get into coaching to get rich. You just want to make sure your family is taken care of, and as long as you have a paycheck and watch your monthly balance, you're accomplishing that goal.

You're also not dumb. You know that there are bad actors in the financial advice industry who want to sell you products that have complicated and confusing financial jargon. Better to just stay away entirely, rather than wade into the quagmire that is the financial services industry and try to figure out who truly has your best interests at heart and who doesn't.

Because that's the other rub of it, right? How do you even know who's legit and who isn't? Everyone says the same things. Everyone throws words around like fiduciary and fee-only, or was it fee-based, or was it no fees? Again, maybe you're missing out, but really, who cares?

That's the annoying part. It's not that every financial professional is some cartoon villain trying to stuff you into a bad product. It's that the industry makes it weirdly difficult to understand who is advising, who is selling, who is required to do what, and what any of that means for you.

I get it.

Olympian Alexi Pappas said that it's better to show up to the start line 80% fit and 100% healthy, than it is to be 100% fit and 80% healthy. From a financial perspective, I totally understand why you'd rather miss out on whatever extra there is out there than risk ending up across the table from an unethical person with a glossy brochure, a steak dinner, and a strategy that sounds sophisticated until you ask three normal questions.

But skepticism alone is not a system.

At some point, you need a better way to evaluate the people, incentives, rules, and relationships inside the industry.

Minimum vs. Standard

This section is going to be something you already intimately understand, but it's still important to lay out the framework.

The minimum is the basics. Show up to practice. Stay academically eligible. Stay out of trouble.

The standard is the standard.

Coaches understand standards because the best coaches are usually obsessed with them. Bill Belichick had "Do Your Job." Nick Sirianni has "Tough. Detailed. Together." Saban had "The Process." Pat Summitt had the Definite Dozen. Dawn Staley talks about discipline and relationships. Anson Dorrance built systems around core values and competitive accountability. Different sports, different personalities, same general idea: the minimum is showing up. The standard is how you do the work.

One thing that can rarely be said about college coaches is that they're timecard punchers. Coaching doesn't really allow for "show up, putz around, ask Claude to make a spreadsheet, and call it a day" energy. The job consumes too much of your life for that.

The minimum is the basics. The standard is the standard.

Again, this isn't anything you don't already know as a college coach. I'm sure your team has its own phrase, slogan, mantra, whatever. But I'm hammering it home a bit because the world of financial advice has its own minimum vs standard thing going on.

Part of what makes the financial services industry so hard to understand is the sheer size of it. According to the U.S. Bureau of Labor Statistics, the finance and insurance sector alone employs roughly 6.7 million people, and even the narrower advice/sales world includes hundreds of thousands of personal financial advisors and financial services sales agents. But those people are not all doing the same job, getting paid the same way, or operating under the same legal obligations.

I want to make sure you understand that point. Depending on the type of financial professional you're dealing with, they're operating with different and specific legal obligations around things like disclosure, communication, paperwork, and other legal compliance issues. Which is fine, until these professionals start flaunting some of these regulations they're bound to adhere to as some sort of standard.

For example, you may hear a financial professional proudly say they "take the time to understand your goals."

That sounds great. And to be clear, that's also important. No coach would want to build a plan for an athlete without knowing the athlete, the event, the injury history, the training age, and the goal.

But also... it's not exactly some rare act of professional generosity. The SEC explicitly says that broker-dealers and investment advisers need to have a reasonable understanding of a retail investor's profile before making recommendations or giving advice. That includes things like income, needs, assets, debts, marital status, tax status, age, time horizon, liquidity needs, risk tolerance, investment experience, objectives, and financial goals.

So when you're evaluating financial advice, the question isn't just whether the person cleared the legal floor. The question is where the real standard shows up. Did they help you understand the tradeoffs? The alternatives? The risks? The future implications? Did they connect the recommendation to your actual coaching life?

It's also important to understand why the rules exist, and how they continue to evolve as the financial services industry changes.

Why the Rules Exist

Do you remember the McDonald's hot coffee lawsuit? Not the social media, meme-worthy version, the actual events.

Long story short, in 1992, 79-year-old Stella Liebeck was attempting to remove the lid from a Styrofoam cup of McDonald's coffee while sitting in the passenger seat of her grandson's parked car when she spilled the coffee all over her legs.

At the time, McDonald's required its restaurants to serve coffee between 180°F and 190°F, significantly hotter than the 135°F to 150°F that home coffee makers got coffee up to. At 180°F, it only takes a matter of seconds for significant burns to appear on human skin, which is exactly what happened to Liebeck. Over 6% of her body was covered in third-degree burns that required debridement and skin graft procedures and still left her permanently scarred and disfigured.

The specific legal details of the resulting lawsuit are outside the scope of this blog post. You can check the referenced sources for a solid explainer of the Liebeck v. McDonald's Restaurants lawsuit if you want to go deeper. But the interesting bit for our purposes is that McDonald's was found to have fallen short of its legal duty of care, which required the company to anticipate potential risks and take reasonable steps to prevent harm.

Evidence at trial showed that McDonald's knew the temperature of its coffee was dangerous, having received many reports of injuries, including serious burns, caused by its coffee. One practical result of this lawsuit was that restaurants, including McDonald's, tightened safety protocols around hot liquids. That included additional training for employees, making sure lids were properly secured, lowering coffee temperatures to safer levels, and the classic "Caution: Contents Hot" warning that appears on hot beverages.

Imagine driving by a diner that proudly displayed a sign in the window reading: "We serve our coffee at temperatures that WON'T cause instantaneous burns!"

The point I'm trying to make with this example is that many of the rules and regulations that apply to the financial advice industry are reactive, not proactive. Typically, something happens, people get hurt, trust is lost, and lawmakers try to patch up the problem so everyone can get on with their lives.

You can see this borne out in history, starting with everyone's favorite financial crisis, the Great Depression.

In 1929, rampant speculation, market manipulation by insiders, abusive banking and securities practices, bank failures, and a collapse in public trust all came together, which is a way to say the stock market became unstable and the economy suffered. Congressional investigations exposed suspicious and abusive Wall Street practices that may have contributed to the collapse and helped build public support for reform.

That reform came in the form of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Banking Act of 1933, often associated with Glass-Steagall. Together, these laws forced better disclosure on securities offerings, regulated exchanges and broker-dealers, created the Securities and Exchange Commission (SEC), created the Federal Deposit Insurance Corporation (FDIC), and separated commercial banking from investment banking.

It was in this era where classic staples like periodic filings to the SEC and prospectuses being made available to investors were born. The goal was ultimately to take power away from insiders and clue the public in on what was happening, even if just a little bit.

During the 1930s, despite these regulations, pooled investment vehicles and advisory relationships were still rife with conflicts of interest, dense and opaque structures that were hard to understand, and a whole smorgasbord of ways for ordinary investors to get hurt by people managing or selling investments.

The resulting acts of the Great Depression had made strides to restore public confidence in the investments being offered themselves, but they had not fully targeted the bad actors who knew a lot more about the intricacies of how these investments worked.

Enter the Investment Company Act of 1940 and the Investment Advisers Act of 1940, which worked together to regulate mutual funds and other investment companies, minimize conflicts of interest in those structures, and create a legal framework for investment adviser regulation by having advisers register with the SEC and conform with SEC regulations meant to protect investors. The Investment Advisers Act also helped establish the legal framework under which investment advisers owe fiduciary duties to clients, including duties of loyalty and care.

Up until and during the middle of the 20th century, many employees would receive pension benefits after they retired. Or they expected to, at least. Too often, workers would find that their employer's pension plan was grossly underfunded or gone entirely if the company failed.

One of the most famous examples in history is the shutdown of the Studebaker-Packard plant in South Bend, Indiana. The plant shut down in 1963 and did not have nearly enough assets to pay out its full obligations to employees, a problem the company had been well aware of for years before shutting down. The pension plan ended up being "at least $15,000,000 short of being able to fulfill pension promises for the 4,392 present and former employees with vested rights."

The Studebaker-Packard failure was one of several examples of pension plans folding and leaving employees and retirees with far less than they had been promised, which helped bring about the Employee Retirement Income Security Act (ERISA) of 1974. ERISA set federal minimum standards around private retirement plans, including expanded fiduciary, reporting, and disclosure rules for those retirement plans.

Near the turn of the millennium, Congress actually introduced deregulatory acts, probably because they felt things had been going swimmingly and wanted to lean into the good times.

The Gramm-Leach-Bliley Act loosened the old Glass-Steagall separation between commercial banking, investment banking, and insurance, which allowed financial institutions to wear multiple financial hats and profit from all of them. The Commodity Futures Modernization Act of 2000 gave legal certainty to certain over-the-counter derivatives markets, which became part of the later debate over how lightly regulated derivatives contributed to the financial crisis of 2008.

Most of us remember the financial crisis at the end of 2008. Home and property values cratered. Many  Americans lost their savings, their jobs, their businesses, and their credit.

The financial system was already loaded with risk, and it didn't help that financial institutions started offering high-risk mortgages with complicated terms and risky features to unqualified borrowers. Shockingly, as borrowers started defaulting on these loans, it created a real cash crunch for the banks and institutions that owned the loans.

And remember, with the introduction of the Gramm-Leach-Bliley Act less than a decade earlier, the lines had been blurred between commercial banks, investment banks, and insurance companies. Major financial institutions had exposure to these subprime mortgages, whether through direct lending, mortgage-backed securities, derivatives, insurance-like products, or some other piece of the financial Jenga tower everyone had apparently decided was load-bearing.

When these loans started going into default, everyone with hands in the cookie jar suffered and nearly took the whole system down with them.

In the aftermath, Congress passed the Dodd-Frank Act, which created the Consumer Financial Protection Bureau (CFPB). The purpose of the CFPB was to consolidate various consumer financial protection authorities that had been scattered across several federal agencies into one place and give them some real teeth.

When President Barack Obama signed Dodd-Frank into law, he noted that "our financial sector was governed by antiquated and poorly enforced rules that allowed some to game the system and take risks that endangered the entire economy," which is a quote that wouldn't sound out of place at the signing of almost any of the other acts previously detailed in this post.

As has been the theme so far, some of these things just seem like common sense.

Hey, let's get the heads of all the regulatory agencies to compare notes.

Let's make sure someone actually has the ability to repay a loan before we let them take one.

Mind-blowing stuff, honestly. It just took the worst financial crisis since the Great Depression to make it all happen.

What Does This All Mean?

The point of this history lesson isn't to turn you into some amateur financial regulation historian. You have better things to do with your time.

The point is to show that many legal minimums are reactions to traumatic financial events, industry failures, investor confusion, or some combination of the three. Something happens. People get hurt. Trust gets wrecked. Lawmakers, regulators, courts, and agencies try to patch the hole so the same exact thing doesn't keep happening in the same exact way.

That's not nothing.

As the industry evolves, it becomes more difficult for people to get taken advantage of through the old channels. Disclosure helps. Fiduciary obligations help. Registration helps. Standards of conduct help. I don't want to handwave any of that away.

The issue is that unscrupulous people are always lacking in scruples, no matter what the law says. With enough motivation, someone can always find a way to take advantage of others and profit. They just do it in ways that have not yet blown up loudly enough to become the next round of federal regulation.

So the next time you see a financial professional touting their "fiduciary" status or how they "disclose all fees and conflicts," don't dismiss it. Those things are important.

Just remember that, depending on the professional and the relationship, some of what gets marketed as a standard may actually be the legal floor.

The minimum is not the standard.

As a coach, you understand this better than most people. You can stay inside practice limits, follow recruiting restrictions, keep your athletes eligible, answer the compliance emails, and still run a program that generally follows all the rules.

But following the rules isn't the same thing as being good at the job.

Nobody walks into a recruit's living room and says, "You should trust us with your kid because we have not violated NCAA rules this year."

Like, yeah, very good. Please keep clearing the lowest acceptable bar.

The real standard is higher than that.

In financial advice, the standard isn't just whether someone used the right title, handed you the right form, disclosed the right conflict, or operated under the right legal obligation. Those things may all be legitimate, but they don't automatically tell you whether the advice is actually good, whether the relationship is clear, or whether the person across from you understands the life you actually live.

For college coaches, that's the most important bit, isn't it?

That's where the standard starts to show up.

Skepticism helps you avoid obvious nonsense. It keeps you from blindly trusting the glossy brochure, the confident title, the steak dinner, the "comprehensive strategy," or whatever other nonsense gets dressed up to sound more sophisticated than it is.

Skepticism helps you avoid obvious nonsense. But skepticism alone is not a system.

At some point, you need to understand who is actually sitting across from you, what role they're playing, what rules apply to that relationship, how they're paid, what conflicts exist, and what they're actually responsible for helping you manage.

Next time, we'll look at who's actually sitting across from you, what they're allowed to call themselves, and why the title on the business card doesn't tell you nearly enough.