On Purpose

Alleviating Client Pain Points Through Proactive Education

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We talked with Andre about:

  • Leveraging clients pain points to build trust and add value
  • Filling in the gaps of clients' financial education to provide unique support
  • The importance of a well-rounded financial team to rally around clients

About Andre K. Kwan:

On his journey through real estate and lending, Andre Kwan discovered an interest in advising athletes on how to build wealth and capitalize on financial growth opportunities. This led him to co-found Magna Carta Wealth, a financial advisory firm that educates athletes on legacy planning and maintaining financial security. 


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Full Audio Transcript

Lauren (00:02):
All right, Andre, so let's do this. So for those listening, I don't even know how long we have known each other. A long time.

Andre Kwan (00:09):
Yeah. About 10 years or so from the University Club.

Lauren (00:11):
Oh, yeah, I think so. We first met at the University Club years ago, and I know you're on the board there and involved with a number of things but we're going back and forth and we're just always chatting. But you're totally in financial services where we are too. And so I'm excited to hear specifically today about one of the initiatives you're involved with around athletes. I'll let you go into it but before that, if you don't mind just sharing a little bit of your background and what you do on a day-to-day basis.

Andre (00:42):
Sure. My name is Andre Kwan. I'm a co-founder of Magna Carta Wealth. Before that, for the last 20 years, I've been specializing in real estate and finance as well as management. Then just through it all, seeing what was happening on the landscape. I went to Ohio State. I'm a big believer in sports and athletics and kind of the athlete's journey, and as things continue to progress, right? So you have these contracts that are starting to get upward of $500 million and that's great. But what happens to those brand new athletes who are undrafted free agents or just trying to make a roster or even other things we've branched out and seen. An example like women's sports, the disparity in pay and how do we help them as well?

Anyway, Magna Carta Wealth is a consulting firm that basically helps athletes build their financial super teams. What I mean by that, our core focus is trying to match athletes with several different categories. So financial planning, tax planning, real estate lending, and insurance are kind of our core principles of where we try to connect these athletes. And specifically because that's where we saw the biggest need. So when we first started out with Magna Carta Wealth, myself and my co-founder, Stuart Gill, he was an Olympic-level athlete who went on to become an executive for a company by the name of Exos. Exos is a national company and their claim of fame is they train the most NFL-level athletes. So think of college players or whatever else trying to make the NFL. 

They train anywhere between 100 to 150 student athletes and maybe about 70 to 80 or so get drafted into the NFL each year. So seeing that, we wanted to be able to create resources because we realized the age demographic for these kids is somewhere between 19 to 22 years old. And a majority of the issues typically happen because their lineage or their parents or their friends don't have that experience when it comes to how do you manage multi-million dollars, let alone just all the different components, whether it's an insurance claim or what's kind of famous for all these athletes now is that when we file taxes, whether it's federal, state, uh federal's easy, right? There's one or two forms you're going to fill out if you own a corporation or not, but on the state side, they can be filing up to 15, 20 returns a year. So that gets kind of out of hand fairly quickly. So that's why we kind of built this system in terms of how to help that. I want to see people, especially athletes, preserve their opportunity, right? How do you build wealth? Because that timeframe for an athlete is much, much different than for a regular professional. 

Lauren (03:28):
Okay. So to back up a bit. Talking about athletes here, did you all stumble onto this problem? Was it just from your conversations? What was from your co-founder's experience? I mean, were you seeing your friends who were having these issues? How did you go, okay, there's a real need here and we feel like we can help to solve it?

Andre (03:50):
Sure. Just because we're here in lovely San Diego, I did kind of back into it at first. So being in the real estate and lending industry, we were starting to see more and more athletes like skateboarders and X Games athletes trying to figure out how to buy homes. Their biggest issue when they're trying to use conventional financing is they don't have conventional type of income, right? They might be getting sponsorship deals from companies or skateboard companies. And it may only be, hey, we're gonna pay you for this year but usually for lending, for it to be considered stable income, they're supposed to have three years of income and have a good probability that the income is going to continue. So seeing that is like, okay, cool. We shouldn't eliminate this opportunity to help these specific kinds of clients. So what do we do about it? Part of it is aligning yourself with companies that offer unique programs as well as kind of see the vision, right? Like how do we help a skateboarder who’s on their second deal try to figure out how to buy the home they really want versus you don't qualify at all. So there's a fine line to it all.

Lauren (05:00):
Okay. So out of curiosity, because again, when you think athlete, how are you defining that? You mentioned Olympic-level skateboarders. I'm sure there are pro surfers in San Diego, right? There's NFL players. I mean, I myself am not a huge sports person, so I wonder how you guys are putting a fence around this to be able to define who you're working with? Or is this like a commonality between all athletes you're seeing?

Andre (05:29):
So our specialty and where we focused was mostly the NFL because of that Exos relationship. In addition to that, a lot of those things are kind of already built out, parameters such as there's 1,696 athletes who are in the league each year. And that number is turned over probably somewhere between 30 to 40% each year. We know the beginning contract for an NFL athlete is somewhere around the hundred thousand dollars range. So that's kind of the parameters we typically were working with. And then kind of being able to quickly match those clients with advisors who have specialties in that area. It’s a little bit tougher when it gets to, as an example, I have a really good friend who was a professional tennis player for many, many years but those earnings can go up and down. You see that versus NBA players, who are one of the most unique and one of the best. But the challenge was the quantity, right? There's only typically 12 to 15 players on a team, and the great thing about them, all their contracts are guaranteed, whereas in the NFL, not every contract is guaranteed; a pretty large percentage are unguaranteed or non-guaranteed, if you will.

Lauren (06:47):
And how are you finding these athletes? Because it's not an easy group I'm sure to tap into. Is it like you sort of able to get into work with one, do a great job, and go through word of mouth? Or how are you reaching these audiences?

Andre (07:02):
Yeah, great question. Word of mouth is obviously the easiest component. And then as you've worked with an athlete or the coach, they'll be like, hey, this is how I got it done so then they'll do it that way. And then on top of that too, my co-founder lives in LA and I forgot who said it, but you know every athlete wants to be an entertainer and every entertainer wants to be an athlete. So there's a cross-section in there in terms of what we were able to come up with. And on top of that, we try to make it very purposeful, right? We want to have our marketing speak directly to what those athletes are going through. Like what we just mentioned. How in the world if you've never filed a tax return or your parents have never filed 15 tax returns, are you going to be able to do that?

Having the steps to walk them through was kind of a big belief for us, right? Like understanding their challenges, listening to them. But more than anything, I think, Lauren, to answer your question, it's building trust, right? Most of these athletes don't have a support system that has come from that kind of financial literacy or background or lineage. So trying to build that trust is really where it all starts, right? We're happy to give away as many strategies or different experiences or results that we've come up with. And the thing is, in our field, in the majority of the fields I listed, you have to be licensed to be able to do it. So you could want to write your own mortgage, you could want to do your own financial plan, and you could try to do all those things but usually you have to work with licensed professionals. So a little bit of all those components.

Lauren (08:35):
To be able to get that advice as well. So then, with that being said, when you're working with athletes, is it usually when they're in the heat of their career or is it post-career? Where do you typically kind of support them in that journey?

Andre (08:51):
So typically we're trying to work on the front end as much as possible, right? What we've found is that the landscape continues to change. For example, one of the big rulings that has changed the entire sports world was the ruling for NIL, which is name, image, and likeness. Basically a couple years back, the NCAA started to allow these athletes to kind of generate compensation based on their name, image, and likeness, which was never, ever an opportunity before. As an example, you have these athletes who are signing up to schools who have never played a down at all making millions of dollars before they ever step on the field. So imagine when you were 17 or 18 years old, if you came up with a $500,000 contract with a car company to advertise their car.

What would you do? How would you spend that money? I'm sure I would've made a lot of mistakes had I got a $500,000 check when I was 17 or 18. And on top of that too, it's not really $500,000 after you take out all the taxes and everything else. I could have spent $500,000 and been in the hole. So just trying to learn these little things and then share, that's the best way we're able to approach this kind of challenge and solution.

Lauren (10:10):
Yeah. So interesting. And then to help them prepare for that, do you guys do educational workshops or is it one-on-one sessions, or how are you helping to kind of coach these athletes as they're getting ready for a post-athletic career?

Andre (10:26):
So we have done some in-person meetings. Typically when these athletes are training, we are trying to catch them as part of the training session. Obviously they're working on their physical component; as an NFL athlete you're working on how fast you can run, how much you can, bench press or squat or jump or whatever else. But as they were eating, we'd cater lunch and be like, hey, these are things to consider when you went to school at USC and all of a sudden you got drafted by Cleveland. Here's what you need to know going into that kind of opportunity as well as a new city and how do you kind of build from there.

Lauren (11:05):
And then you're able to support them, I'm sure. But I'm assuming you also have a pool of partners who specialize in working with athletes. Is that true? Or how do you make sure you're able to be that support system for them when they go, well, I need this and I've got someone you can refer them out to the appropriate person that gets them and where they're at.

Andre (11:25):
Yeah, that's correct. So usually what we think is Magna Carta is kind of like the quarterback, if you will, for the situation and we're trying to plug and play because a lot of these athletes are working with an agent, they might already have a financial advisor. They might already have one or two of the professions in there. We're trying to take an assessment to figure out who they have and what is missing, and then go about trying to connect them. Because some of the licensing is state-specific as an example, right? You might work with a real estate agent here in San Diego, unfortunately we don't have the Chargers here anymore, but let's just say you know somebody went to Boise State, they got drafted by the LA Chargers, and they have nobody they know in LA so how do we work with geographic-specific professionals to help them out?

Lauren (12:12):
 Yep. That makes sense. That are specific to their needs and where they're at. Okay. Out of curiosity, are there any athletes you feel are model examples for how to manage where they're at and their financial journey?

Andre (12:27):
What a great question. I think two that really just pop off our list, and because they're kind of different, but Rob Gronkowski as well as Marshawn Lynch. The reason why those two kind of jump off is because they were able to make their living strictly off endorsement deals, and they saved every penny of their NFL contracts. So because of that saving, and hopefully if they work with the right team, they're able to invest and have that money compounding year over year. And those guys played a significant amount of time. If they're doing the right moves and they're conservative, living off interest or some other things, they're set for life and more importantly, their families and legacies are set for life after that. 

Lauren (13:09):
Okay. Very good. Thank you for sharing this too. Well this is great. Anything else you want to add that you think would be helpful to share?

Andre (13:18):
Yeah, I think regardless if you're an athlete or not, we always are talking about how do you build the right team around you, right? Even when we're working with regular employees or founders of companies or self-employed people, they might have a great CPA but they don't have any financial plan. They might have a family member who’s a financial planner but they're doing their taxes wrong. They're going out and maybe buying a piece of real estate that is way over their head or they're just on a spending spree. So anyway, I say all that to say I believe in building a financial team that's well-rounded and communicating with each other because that's the biggest component, right? You could have five different professionals with five different kinds of plans and programs, and if they don't jive, something's got to give.

Going through an audit every single year, nobody likes the word audit or anything else, but it really helps if you're trying to get the best credit, the best loan programs, the best insurance rates—really having a sense of what's the income, what's the expenses, and organizing your financials, meaning what's in the bank, and on top of that too, the tax returns and everything else. I'll share a funny, funny story. Just a 10-second story. We're helping a coach who was buying a multimillion dollar home and his deposit, I want to say was $250,000. And typically when we do regular financing programs, you have to have the last two years’ tax returns filed and ready to go. Why this was crazy was because when he applied, he got his offer accepted, everybody's happy, then hey, let's go get your financials, let's get this all ready. He didn't file his last two years’ tax returns.

Lauren (15:05):
Oh my gosh.

Andre (15:07):
That deposit of $200,000-plus was on the line. So you never want to be in that situation. That's why it's super important to be able to have everything organized and have your team in kind of a flow status or flow state. For most people, their real estate and their loan is typically 99% of the time their largest financial asset as well as liability. So we just want to make sure you do those things right. You know, you only typically have one or two chances at this.

Lauren (15:38):
Yeah. That's so fair. That's right. Very good. Well, this is so helpful. I appreciate your insights. It's really fun to hear more about this venture you're involved with too. And then also just the athlete side of it too because everyone isn't working with that audience on a day-to-day. I know there's a number of companies that are investing in this audience. We work with a lot of clients where they've got a target market but it's not always as refined. And so to be able to hear more of who you're helping, how you're specifically helping them, how you're reaching them, and what those problems are, I think is really valuable. Again, especially since it's an audience that you're not going to run into every day. So it's fun to hear more about that for sure. Thank you again.

Andre (16:20):
Of course. This was fun, Lauren. I really appreciate it. Thank you for having us on and definitely you guys are doing great things for your company and the community as well too. So whatever we can do to support, please let us know. But thank you so much. This was enjoyable.

Lauren (16:32):
Thanks. We appreciate it.

Andre (16:34):
Okay. Thank you so much.

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