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Special report: sports stars crying out for professional advice

Elliot Smith talks to three sportsmen-turned-money men about the problems top level athletes face in retirement, despite the perceived wealth on offer.

Special report: sports stars crying out for professional advice

The world of professional sport is replete with ‘rags to riches’ stories. However, far too many young athletes still head the other way, falling away from the limelight, adulation and discipline of a professional sports career and into financial dire straits.

Research from the Professional Players Federation found that just over half of retired sportspeople reported financial difficulties in the five years after they stopped playing. Another study by the Financial Adviser School (FAS), a not-for-profit arm of Old Mutual Wealth, and MA Sports Consulting found 48% of athletes had given no thought to planning their finances.

For professional sportsmen and women there is much emphasis on staying focused and striving to deliver optimal performance day by day. It is common for athletes to reach the end of their career without having given much thought to what will happen in the days, months and years after they stop playing.

But with FAS research showing only a third of athletes have received any formal financial advice, could this be an open goal for the IFA profession?

The opportunities are twofold.

There are swathes of young people with financial means in need of advice. There is an opportunity for IFAs to cultivate a relationship that could last for decades. Advice could be critical during the transitional phase into life outside sport.

Secondly, with new blood being sought throughout the advice profession, the FAS  study found 59% of athletes would consider working in financial services itself.

When you are forever focused on the next game, the next day’s training, optimising physical performance, and in the case of some, regularly taking home substantial wage packets, it is easy to see why planning finances is not number one priority.

Making the switch

Ryan France (pictured) spent six years at Hull City, for whom he played in the top four divisions of English football including the Premier League, between spells at Alfreton Town and Sheffield United.

These days, he plies his trade as a financial adviser in his native Sheffield with Leeds-based Greaves Financial Services, a St James’s Place partner. He hopes to carve out a niche offering reliable advice to sports stars.

France told New Model Adviser®: ‘Footballers have high profiles and can earn crazy money. They are young and vulnerable and need help from trustworthy professionals. As a result of my experience in the game, it is my objective to help them.

‘Funnily enough’ he said, the higher up the leagues the team went, ‘the more “professionals” we saw on a regular basis at the training ground’. However, usually players were being offered the chance to put their money in ‘high risk, high reward’ unregulated investments, he said. ‘There were too many advisers promising the world and too few actually delivering on these promises.’

France said most elite players, even if they have thought about the future, would not actively seek advice. But the difficulties players experience in the transition after football can be compounded by not having a financial plan.

After retiring from the game in 2011, he spent several years attempting sales and sports massage roles, before discovering financial advice offered the opportunity to help guide those in the same position.

‘For me, playing football and getting paid for it was the best thing in the world,’ he said. ‘Transitioning from a career in which you’ve spent your whole life becoming the best you can be is unbelievably difficult and stressful, both financially and personally. Seeing the income you have become used to decrease gradually, or totally cease, is scary.

‘Providing clients with options and helping them secure their financial future is as close to playing football as I can get and an exciting new beginning for me.’

Skipping past challenges

Sam Sloma (pictured above), managing director of London-based Engage Financial Services, agrees there is a need for trustworthy and professional financial advice in football. Sloma played for a host of clubs, winning promotion to League Two with Dagenham & Redbridge in 2007.

He said: ‘There is a commercial opportunity, but unfortunately it is an area of the market that is prey to scammers and people who are a little more unscrupulous, because of the funds involved. There is also a lot of mistrust, so there is an opportunity to do things better in that market.’

Sloma said while establishing partnerships with clubs was a good idea in principle, clubs were not always able to vet the advisers they brought in. He said many would rather do nothing than be associated with ‘bad advice’.

Organisations like the Professional Footballers’ Association and the Premier League, he explained, were also beholden to commercial obligations to sponsors, and unable to deal with independent advisers.

Although not an easy process, Sloma did manage to use his connections. He spoke to a few clubs and put together a proposition that offers sportspeople something they do not usually see from firms trying to court them: empathy.

‘I understand their issues rather than focusing on their earnings or the glitz and glamour that one could associate with that,’ he said. ‘I can see through all that and give them clearer advice, to understand how quickly things can change, and to give them a broader perspective, having been involved in football for 20 years.’

Jumping through hoops

John Amaechi (pictured above) is one of a small number of Brits to have reached the USA’s National Basketball Association (NBA), having represented the Cleveland Cavaliers, Orlando Magic and Utah Jazz, along with spells in several of Europe’s top leagues.

In the NBA, he explained, the Players Association and Retired Players Association work with the league to provide mandatory financial advice. This includes retirement planning, along with other lifestyle guidance and healthcare. The organisation can be approached for a second opinion on any financial decision a player is likely to face.

Europe is a different story. Amaechi said better links were needed between the International Basketball Federation and the respective national leagues to create a holistic player support programme, including help on dealing with finances.

‘Where you end up being domestically located in Europe and how that affects you from a tax perspective is truly complex,’ he said. ‘I don’t think everybody is aware.’

However, he suggested in the UK (where Amaechi spent a season with British Basketball League team Sheffield Sharks) the average player wage was just £7,000 a year. Players are also encouraged not to have too many outside interests, which he said can be extremely limiting for their prospects after leaving the sport.

‘These guys make their money by doing coaching for their team to survive, which means they don’t tend to focus on education or careers after sport.’

Advice goals

France and Sloma had not considered a career in finance while playing, but have reaped the benefits as financial advisers.

Sloma explained: ‘Football is a really harsh industry. It teaches you to be self-sufficient and tough, whatever you’ve done. It gives you a pretty thick skin, which is transferable. You also have the competitive element of wanting to be successful.’

Amaechi now runs a successful consultancy firm, Amaechi Performance Services, and works with a number of financial services firms. He suggested financial services needed to change to become more appealing to today’s diverse group of young sportspeople.

‘Financial services probably is missing a trick, but not just because athletes aren’t coming in. There is a homogeny there [in financial services] that is clearly very comfortable to a lot of the organisations that work in that sector. If you can’t find a way to recruit even cognitively diverse people, let alone visually or background diverse, under normal circumstances, what chance do you have of recruiting high level performers who want to learn a new trade?

‘People keep talking about “new fresh blood”, but if this new blood enters an environment that is toxic for them, they will leave,’ he said.

France said he would never lose the strengths important in the world of a successful sportsperson, such as ‘commitment, drive, sacrifice, and a desire to be the best’.

‘When I sit down with clients who are professional sportspeople, they know I understand their circumstances,’ he said. ‘They know I have been through what they are going through and, if they know me, they know I care.’

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