At the beginning of April, I read an article about Craig Bellamy declaring bankruptcy, despite being a former footballer for Manchester City, Newcastle, captain of the Welsh national team and current assistant coach at Burnley.
It was hard for me to believe that a successful professional footballer would find himself bankrupt.
He even claimed his bankruptcy was not due to drinking, gambling or drugs, but rather the financial advisers who misled him and cheated him.
He said he wanted his story to be a warning to other players to “check everything, make sure the people advising you are regulated”. “If they are not regulated, it’s the Wild West,” he said.
Matrix Capital founder and managing director Robin Melley believes that sudden wealth, such as that obtained by a professional footballer, can leave a person in “vulnerable circumstances”.
He says Bellamy’s story is not the first and will not be the last: “His story is of a young man, with no life experience, who appears to have been taken advantage of by self-serving, unregulated, and probably unqualified advisers.”
In his article, Bellamy admitted to struggling with his mental health at various periods in his life and thus being unable to face the stress of managing his money. Again, Melley says this made Bellamy a vulnerable client. Due to the stress and what Bellamy described as being “beyond naive” he even gave one of his financial advisers power of attorney over his financial affairs.
Melley tells me he’s conducted research into the premiership footballer market to look at whether there is an opportunity to use specialist knowledge and expertise around vulnerability and advising sports professionals who experience sudden wealth. But, he says, he decided against it because of the “agents that seem to surround young talented premiership footballers”.
“There was strong evidence of conflict of interest,” he says. “Getting past agents and other intermediaries to deal directly with a footballer seemed to be a significant barrier.”
This made me think about whether certain sports are harder for advisers to gain access to than others. Especially because of the challenges agents can provide in letting advisers have access to the star. Melley says some agents will even charge an introducer fee to the adviser.
Adam Hughes Wealth Management director Adam Hughes, which is a St. James’s Place Partner Practice and has clients who are professional athletes, says football is the hardest sport to get into for an adviser “without a doubt”.
Hughes himself is a former professional Rugby player who played in the Rugby Union for the Exeter Chiefs and Bristol and represented Wales at Under 16, Under 18 and Under 20 level.
He says certain sports professionals would tick a few of the vulnerable client boxes. If an adviser has access to a sports professional at the start of their career, they would likely be a vulnerable client, he adds.
When it comes specifically to agents, Hughes says he can understand their concerns but sometimes he can be “infuriated” by them.
An agent has a responsibility to care for a client and Hughes sees it as a cop out when an agent does not tell a sports professional to get an adviser.
He adds that agents are not financially qualified and they themselves do not know what to look for in a good adviser.
A player will also rely on agents to do a lot for them, which can add to the barrier between sports professionals and advisers.
Hughes does elaborate, however, that professional athletes are a big target for independent financial advisers (IFAs).
Kingswood wealth planner Jade Rose adds that “footballers, boxers and athletes at the height of their fame” are the hardest for advisers to gain access to.
She believes it is easier to gain access to sports stars in “more obscure sports”.
Sports professionals who do not have an agent yet are also easier to get access to. “It is incredibly challenging for financial advisers to gain access to sports personalities as these individuals are often heavily protected by their agents,” says Rose.
She says she finds “professional satisfaction” in working with younger sport stars. “Not only can I deliver financial advice, guidance and education, but I can also experience the journey with them which helps me to understand their circumstances and needs as their financial landscape develops,” she says.
David James Wealth is a financial planning firm which has a particular interest in advising sports professionals, as well as musicians.
Chief executive and co-founder James Reiss, who himself is a former professional golfer, agrees with Hughes that football is the hardest sport for an adviser to penetrate. He says: “There is a lot of people trying to get into football as they are such big earners”.
He says golf is also hard for advisers to get into.
He suggests the people around sports professionals are hesitant to introduce them to other people.
But a good agent is key for a sports professional to get a financial adviser, he adds, because they will tell the sports star to get a financial adviser and the agent will act as a trusted source for the player. He says: “A good agent is the foundation.”
Reiss added that advising sports stars is different as their financial knowledge can be “significantly less” so clear communication is essential. Musicians are very similar to sports stars, as they tend not to have “much knowledge in the financial space” as well.
David James Wealth has released a book called ‘The little book of financial planning with purpose and without purpose’. It gives examples of what happens to a professional golfer whose agent instructs the player to reach out to a financial adviser. It then plots the same story, but this time a financial adviser is not consulted and things go wrong for the golfer.
It seems the agent is the gatekeeper of the player.
