Introduction

Last month a number of former footballers gathered in Westminster to provide testimonies to the new all-party parliamentary group on investment fraud.

These former players shared how they were lured into dubious investment schemes that led to significant financial loss and severe penalties from HMRC.

As a consequence many players suffered severe mental health difficulties including depression and anxiety which placed enormous strain on their personal relationships.

There have been calls for greater accountability for those who promote such investments and for greater safeguards against the ‘financial grooming’ of footballers and other sports people.

Too often the unscrupulous tax advisers, unauthorised introducers and financial advisers disappear leaving the victims to pick up the bill, not only in terms of lost capital but also by way of a hefty tax bill.

The main reasons why a young footballer or sports person can be the victim of ‘financial grooming’ is that they are intensely focused on their career. Also, you can’t expect someone who is often still a teenager or in their early twenties to be financially sophisticated. As such, they will rely on their clubs, their agent or management team or their peers to recommend a financial adviser.

Given the amounts of money that footballers and sports people can earn, this is a recipe for disaster.

So, if you are a professional footballer or sports person what can you do to avoid becoming a victim of ‘financial grooming’ and how do you select the right financial adviser.

8 Things To Look For in a Good Financial Adviser

I have set out below 8 things you might want to consider:

#1 – Do they put financial planning at the heart of what they do?

All sports people need a financial plan, whilst they are playing sport and, more importantly, for life after sport. Too many financial advisers focus on how much money a person has rather than their goals, objectives and future desired lifestyle. Financial planning puts the emphasis on the person and not just their money.

#2 – Do they charge fixed fees?

There is often a conflict of interest where fees are based on assets under management. In other words, the financial adviser has to sell an investment in order to get paid.

#3 – Independence

It is important to choose a firm that is totally independent and can recommend the most appropriate financial products and investments to fit your circumstances and your goals and objectives.

#4 – Qualifications and experience

Financial Advisers can have numerous qualifications with lots of initials after their name, however, in my opinion the most important is the Certified Financial Planner ™ qualification. Advisers with this qualification typically understand proper financial planning.

#5 – Financial Education

Young footballers and sports people are typically focused on their career and will probably have little interest in their finances. However, rather than exploit this naivety, a good financial adviser will look to provide financial education so that they and perhaps their closest family members can make the best financial decisions.

#6 – Time

Good financial planning can take time. It may take a number of meetings to go through and explain a financial plan, to set out an investment strategy and to fully implement any financial recommendations. Therefore be wary if everything is done very quickly.

#7 – Complexity

Young footballers and sports people, especially early in their careers, do not necessarily need complexity. An investment strategy should be relatively straight-forward to understand as should the use of various tax wrappers.

#8 – Referral to Other Professional Advisers

A good financial adviser will have a network of other trusted advisers that they can bring in to work with collaboratively. These can include tax advisers, accountants as well as private bankers.

Conclusion

For professional footballers and sports people, it is incredibly difficult to know who to trust and it is understandable why they would use an adviser that their agent or team mate recommends.

I think football clubs need to do more to help their players and I think their needs to be more financial education given to young footballers and sports people.

I do hope these 8 factors will prove useful and do get in touch if you would like to discuss them in more detail.

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