Young athletes face new financial realities in the NIL era, says Merrill’s Whittaker

With nearly all young athletes now expecting to earn from name, image and likeness (NIL) deals, financial adulthood is arriving far earlier than ever before — and not always with the structure to support it.

According to Merrill research, 96% of athletes aged 18–24 either have or expect NIL deals. But while many feel confident about their financial knowledge, a significant number still report insecurity and stress around money.

Sharing his expertise with InvestmentNews, Gordon Whittaker, wealth management advisor and sports and entertainment advisor at Merrill Wealth Management says the gap reflects a deeper issue in how young athletes are navigating sudden income.

“The biggest change is that financial adulthood is showing up in high school or early college, often before financial infrastructure and decision-making maturity are in place,” Whittaker says. “When income arrives that early, the risks aren’t only ‘overspending.’ It’s making irreversible decisions without guardrails: signing unfavorable contracts, mishandling taxes, getting pulled into shaky business ventures, or letting lifestyle costs ‘lock in’ before a career is stable.”

Whittaker warns that NIL also introduces a new category of risk - brand and reputation risk with financial consequences.

“A poorly structured deal, a compliance misstep, or a social media issue can affect earnings immediately,” Whittaker says. “In other words, NIL income is real money, but it’s also more fragile than a traditional paycheck. Young athletes often fail to realize how quickly and dramatically that income can change.”

Confidence vs preparedness

Despite many athletes rating their financial literacy as strong, Whittaker sees a clear disconnect between knowledge and execution.

“The disconnect is usually between knowing concepts and understanding how to implement those concepts in a disciplined and process-driven manner in real world scenarios,” he says. “Many young athletes can define ‘budgeting,’ ‘investing,’ or ‘credit,’ but real preparedness is more like a cockpit checklist: cash flow, taxes, emergency reserves, insurance, and a plan for volatility.”

The advisor highlights a second gap, where athletes often judge their financial health by income potential, not financial resilience: “You can earn a lot and still feel insecure if your money is inconsistent, your tax bill is unclear, or you’re supporting others.”

With careers that can be short or unpredictable, managing spending becomes critical. Whittaker encourages athletes to structure their finances deliberately.

“We encourage athletes to separate their earnings into three tranches and allocate those resources to those tranches in order,” he says. “It is critical to avoid converting temporary and often variable income into permanent obligations such as a high car payment, luxury rent, or supporting multiple households,” Whittaker says.

Whittaker advises that when your income can swing dramatically, the smartest move is to keep your ‘fixed monthly nut’ low and your flexibility high.

Unique financial pressures

Beyond income volatility, young athletes face external pressures that can complicate financial decisions.

“Three common hurdles that emerging athletes face are… irregular income + irregular expenses,” Whittaker says, noting that without proper planning, athletes may rely on credit or liquidate investments at the wrong time.

“Family and friends may have real needs, and athletes often want to help. But without boundaries, generosity becomes an open-ended obligation,” he says. “It can also create resentment if an athlete later tries to pull back.”

“Young athletes sometimes confuse proximity with expertise,” Whittaker says. “Agents, marketers, trainers, ‘mentors’ and even family members can be great at their core job… but not all of them are equipped or incentivized to give prudent financial guidance.”

The rise of NIL income is also reshaping how financial advisors work with younger clients.

“With NIL income, financial advisors must be earlier, more educational, and more operational with regard to financial planning,” Whittaker says. “This isn’t just portfolio management. It’s helping them build a financial foundation… while they are still in school.”

He adds that the advisor’s role becomes one of a quarterback, not controlling everything, but ensuring the athlete’s decisions connect into a coherent plan and that nothing critical gets missed.

“It has also become more important that financial advisors play the role of educator and mentor… defining the ‘why’ behind those plans,” he says.

Practical steps

When it comes to practical steps, Whittaker emphasizes simplicity and consistency.

“Automate the basics: A defined percentage of every payment goes to taxes, savings, and long-term investing before discretionary spending,” he says. “Build a real cash buffer… think in months of expenses, because income is variable and unanticipated expenses occur frequently.”

Also, create a spendable number and stick to it.

“Invest consistently, not emotionally… and avoid chasing trends,” he suggests. “Start planning for retirement early (even if it feels weird): Time is the advantage young athletes have that even high earners can’t buy back later.”

Finally, Whittaker points to early decisions around taxes, contracts and protection as critical to long-term security.

“Treat taxes as a first priority, not an April surprise. NIL income is often 1099/self-employed… a missed tax plan can create debt quickly,” he says. “Understand the fine print… a ‘great number’ on paper can be a poor deal if obligations are unrealistic or rights are overly broad.

And just like in their sport, an athlete’s finances and business dealings takes a well-constructed village.

“Building a team of agents, marketing and brand reps, attorneys, accountants, financial advisors who are competent… and operating in the best interest of the athlete is critical.”

As NIL opportunities continue to expand, Whittaker stresses that early income can be powerful, but without structure and discipline, it can just as easily become a source of long-term risk.