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A prime avenue for client engagement and nurturing those relationships is advisors adding value when it comes to budgeting.
As mundane as that seems, the endeavor can bear fruit for both advisors and clients and though not necessarily complex, it involves more stimulating fare than telling clients to bring lunch to the office and dial back on the daily Starbucks habit.
Obviously, one of the objectives in rigorous budget examination is finding credible areas in to prune, thereby saving clients notable amounts of money. It might be uncomfortable for advisors and clients alike, but sports is an excellent place.
That’s a takeaway from a recent LendingTree survey which indicates Americans will spend an average of $664 on sports this fall and third will go into debt feeding the habit.
Examining the Survey
An important point from the survey, which polled nearly 1,600 Americans, is that it separates spending on things such as going to games from expenditures directed to kids and their sports.
That’s a relief for advisors because telling clients that are also parents to trim sports spending tied to their children is likely to be off-putting for the client. That’s particularly true at a time when schools are cutting back on physical education and childhood obesity is a legitimate problem in the U.S. Just don’t tell clients they have to spend less on the kids’ soccer season.
However, the LendingTree survey confirms it is appropriate for advisors to tell clients to watch their sports-related expenditures. The aforementioned $664 in the span of just a few months isn’t chump change and it’s made worse when arriving at that sum requires use of credit.
“41% of Americans will spend money as sports fans this fall. Top purchases include live game tickets (21%), merchandise (16%) and food, alcohol and/or tailgating (15%),” notes LendingTree. “Sports fans plan to shell out $664, on average, this fall. Spending surges even higher among six-figure earners ($931), Gen Xers ($827) and men ($767).”
Making matters worse and I don’t say this lightly as a resident of Las Vegas and a fan of an occasional sports-related “investment” – is betting.
“Eight percent of fans expect to bet on sports, while another 7% will spend on fantasy sports. While these figures may seem low, 33% of these sports betters and fantasy players will shell out more than $1,000 this fall,” according to LendingTree.
Drawing on Las Vegas again, and advisors know this, all those glitzy casinos weren’t built on the backs of folks winning at sports wagering.
Important Demographic Data
As is often the case with surveys of this nature, there’s some critical demographic data advisors should observe.
The poll indicates Gen X and millennials – two generations that should be taking advantage of this year’s erosion in equity markets – are forecast to be the big spenders on sports this fall. Likewise, those in certain income brackets, meaning prospective clients with the means to allocate more to investing, are spending big on sports.
That $664 figure mentioned earlier climbs to $931 for those making $100,000 or more per year and to $900 for those earning $75,000 to $99,999 annually.
The point: Advisors aren’t clients’ budgeting babysitters, but they can show clients how reducing sports spending can improve long-term investing outcomes.