Frankie Dettori has arguably been the most famous name in British horse racing for the past couple of decades.
The enigmatic Italian has ridden over 3,000 winners – including all seven in one day at Ascot in 1996 – in a glittering 35-year career that has gained him adulation from millions of fans around the globe.
In much the same way Ronnie O’Sullivan has done for snooker, Dettori’s big personality has undoubtedly raised the profile of the sport and made it all the more exciting to watch.
Cheltenham has been the setting for many of his greatest triumphs, but instead of celebrating another big win with his trademark jump off the back of a horse, this year Dettori used the week of the festival to announce he is filing for bankruptcy.
Dettori revealed he had been unsuccessful in efforts to resolve financial difficulties, saying: “For the last six months, my advisers have been working with HMRC in an attempt to find a solution to my financial situation. Regretfully, I will be filing for bankruptcy.”
The jockey said he was “saddened and embarrassed” by this outcome, and would advise others to take a tighter rein over their financial matters.
He added that “bankruptcy is a major decision and its consequences will affect me for many years”.
The news of Dettori’s financial woes first came to light in December last year, when it emerged he had been involved in a dispute with HMRC over a scheme to reduce his income tax payments.
Unsurprisingly, he requested anonymity in an attempt to keep his name out of the papers, but this was denied following applications to the court by HMRC and the media.
After being named publicly, Dettori released a statement saying he had been “working closely” with HMRC to “unravel the mess” he said he had been put into, in his words, by his former financial advisers.
There are three important things to consider here from a financial advice perspective: how bad advice can have catastrophic, life-changing repercussions; the issue of vulnerability; and trust.
When I was in Edinburgh recently, Standard Life’s vulnerability lead Karen Stewart described it as a “state and not a trait”, a line I thought was very interesting – and of course, very true.
As the FCA and financial advisers know all too well, anyone can become vulnerable at any point in their lives – be it a job loss, marriage breakdown, the loss of a loved one or any number of things. It’s not reserved for the elderly or impaired.
As they will also be able to tell you, it’s not always easy to spot the signs of vulnerability.
Advisers have a degree of responsibility to ask the right questions to properly assess a client’s circumstances. However, the onus is also on the client themselves to open up and be truthful about what is happening in their lives.
Recent research from the FCA revealed that just four in ten vulnerable customers say they have disclosed their needs to their financial services provider.
However, the study showed that those who do open up tend to have better experiences.
Three quarters of vulnerable customers who told their firm about their circumstances (74%) said that staff asked the right questions to understand their situation, 57% said their firm ‘cared’, and 58% said they took action to provide the support they needed.
Not many would consider a celebrity with an estimated net worth of £18m as being vulnerable, but Dettori’s predicament just goes to show even the wealthy aren’t always immune.
In fact, those with more money can often be the most vulnerable.
Many other well-known public figures – from Oscar-winning directors to former US presidents – have been forced to file for bankruptcy over the years for a variety of reasons, be it a change in fortunes, ill health or poor money management.
Dettori himself has certainly battled his demons over the years.
His personal life has taken more twists and turns, more ups and downs, than the famous Grand National track at Aintree – being arrested for possession of cocaine, battling depression and eating disorders, and even being pulled from the wreckage of a burning plane than crashed to the ground.
You can be sure Dettori won’t be the last celebrity or millionaire to get themselves into a financial black hole.
Whether Dettori was intentionally trying to avoid tax, or was just badly advised, is a question only he will know the answer to.
According to him, he put his trust in his financial advisers to make the right decisions – and they let him down.
Whatever the explanation, his fall from grace is a sad reminder that we never truly know someone’s circumstances, their thoughts and feelings, the decisions they make, and the decisions that are made for them by others.
It also reinforces just what an important role an adviser can play not only in the outcome of someone’s finances, but their life and reputation.
