InvestmentsJun 27 2018

Helping to make the earnings from professional sport last a lifetime

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Helping to make the earnings from professional sport last a lifetime

When a footballer sues his or her financial adviser it is always guaranteed to make the headlines.

Former England footballer Alan Shearer last year agreed a settlement with financial adviser Kevin Neal and pension specialist Suffolk Life after he allegedly received negligent advice.

In April this year, the City of London police announced it had launched a criminal investigation into intermediary Kingsbridge Asset Management, a firm that had offered investment advice to footballers and wealthy individuals between 1992 and 2010.

While the average man on the street may find it difficult to feel sympathy for sporting professionals whom they might view as overpaid individuals, not every sportsman or woman has the enviable bank balance of an Alan Shearer.


In fact few professionals could absorb a significant drop in their earnings without the threat of bankruptcy.

Adam Osper, director of financial planning at Tilney, said: “People assume footballers earn a lot of money, which if you are playing at top end of the game, you do.

“But if you are at a lower division you earn a lower income and you might have a career, that is anywhere from one year to, if you are lucky, 15 to 18 years.

“If you look at the number of players in football, especially at the top for a long time, there are not that many. You might only have anywhere between five and 10 years to maximise your earning potential and make provision for your retirement.”

Key points

  • Just over half of former sportsmen and women report financial difficulties five years after they stop playing
  • Sportsmen are heavily dependent on professionals for advice
  • Advisers need to be adaptable as they might find themselves working with a teenager or someone in their 30s

According to a survey of former sportsmen and women published in February, just over half (52 per cent) of respondents reported financial difficulties in the five years immediately after they stopped playing professionally.

The Past Player Survey, commissioned by the Professional Players Federation, also found that while 84 per cent of past players are in employment, self-employed or retired from a second career, most had to accept a drop in salary once they stop playing.

The study also found that 6 per cent of retired players have taken formal protection from bankruptcy, while 90 per cent of players surveyed needed to work full time after their playing career.

The research, which was carried out in partnership with the Rugby Players Association, the Professional Cricketers Association and the Professional Footballers Association, covered 800 former professional players ranging from 17 to 79 years old.

Matthew Fleming, a partner at Stonehage Fleming Group and himself a former professional cricketer, said sportsmen and women are a fairly unique group because their earning power typically peaks at a young age.

They acquire their wealth at a young age, when they have had little opportunity to develop the knowledge, skills and perspective to completely understand the impact on their personal life or take a long term view of life.

He added: “Because of their youth they are heavily dependent on other professionals for advice, so often the first professional relationship or first adviser-type relationship is critical in setting the benchmark for governance, professionalism, for long-termism rather than short-termism.

“The first decision they make about the adviser is absolutely critical and sadly they are not in the position to judge the quality of their first adviser that well.”

At Tilney, Mr Osper has been working with sporting professionals for about 10 years.

He said there is a misconception that sports people, especially footballers who earn a lot of money and own nice clothes and cars, like to take risks with their money. But he said the opposite is true.

Mr Osper added: “Most of them don’t like taking risk. If they could leave their money in the bank or just buy property they would.

Sometimes you see financial advisers who have not worked with sportsmen before picking up a sportsperson and getting excited, because they have someone famous.Adam Osper

“What you have are tax advisers, or financial advisers, who will talk to a footballer and say do you want to save tax, and reduce your tax bill? If you earn £2m a year broadly, you would broadly pay £1m pounds in tax a year. That's a lot of money.

“If someone says there is a way to reduce your tax liability, normally the footballer will ask: Is it a good idea? If the adviser replies, yes, that is all the encouragement these people need, because they are trusting the adviser to give them the advice. If the adviser says: this is really aggressive tax planning where you could get investigated or be in the papers, they would say they are not doing it.”

Mr Osper said when speaking to sportsmen or women advisers need to be adaptable as they could be speaking to someone that is 18 years old or 33 years old, or the person could be from another country for whom English is not their mother language.

Financial planners also need to have a flexible diary, which could change from day to day, to accommodate where an individual has training or has been injured.

He added: “You need to be a good financial adviser, with a strong knowledge of the industry, how contracts work, image rights, the different products suitable for footballers around insurance, for example, and how the pension scheme with the Professional Football Association (PFA) works.

“It is a specialist and niche area. Sometimes you see financial advisers who have not worked with sportsmen before picking up a sportsperson and getting excited, because they have someone famous. But they are not really able to understand them, or how their earnings work.

“I always tell sportsmen and entertainers: you don’t need to invest in any get-rich-quick schemes. You don’t need to get big returns with your money because your earning potential is so high. You just need to make best use of it and be aware of what you are doing and always have one eye on the future.”


Mr Osper believes that, handing out harsher penalties and making it tougher for advisers to set up another business after they have closed down because they have been investigated, might deter unscrupulous firms.

A stronger partnership between the Financial Conduct Authority and the Insolvency Service could make that happen.

A Memorandum of Understanding (MoU) has been established between the two enforcement bodies and commits the FCA and the Insolvency Service to share relevant information in a timely manner, as well as robust coordination of enforcement activities where appropriate.

In particular, the MoU commits the two to sharing information relating to misconduct, investigations and enforcement so that they can better use their powers to tackle corporate and financial misconduct and the commission of financial crime.

Mr Osper also believes that, in future, fewer individuals will be taken advantage of by advisers because controversial investment and pension schemes will have come under the regulatory and government spotlight.

Ima Jackson-Obot is a features writer at Financial Adviser