Professional athletes are highly skilled and intensely focused. Combined with phenomenal natural ability this gives them the ability to perform at the highest level day in and day out.
However, as we often read about in the press, when it comes to effective financial planning, many athletes fall short. This can have huge implications on their life, during their sporting career and after.
Many athletes delay and delay prioritising their finances. Why? Is it the single-mindedness required to excel at the elite and cutthroat level of professional sport? Is it because wealth management is often perceived as complex, risky and perhaps boring? Or do athletes struggle to know who to trust?
In my experience as a professional cricketer, it is usually a combination of all the above. In addition, our psychological make-up predetermines that we value what we have today far more than what we could have tomorrow. Sportspeople (perhaps more than the layman) are focused on today’s performance. Tomorrow’s challenges are tomorrow’s problems.
With all that in mind, why do I believe it is so essential to plan today for a better tomorrow?
Peace of mind
This is something our advisers hear regularly from clients once we have begun engaging them. Having a financial plan helps to reduce the stress money can cause. Knowing you have solutions in place and have started the journey towards financial freedom often allows clients to relax and concentrate on what they do best.
Making the most of your career earnings
Athletes can be extremely well paid. However, their careers can be short, uncertain and full of highs and lows. Additionally, most athletes retire extremely young with 50-plus years of life ahead of them. Without effective and efficient financial planning much of the income earned can be lost instantly in tax. A good financial plan enables you to minimise your tax liability legally and ethically alongside making the money work hard in proper risk-managed investment strategies.
Mental health
Financial difficulty is one of the major causes of poor mental health, particularly among athletes. Blackrock conducted research in 2019 which found that worrying about money is the number one cause of mental health problems around the world. Surveys into rugby, football and cricket have shown that around half of players leaving the game experience financial challenges within 5 years of retiring– staggering isn’t it? Addressing the issue head-on and early in your career can help alleviate these worries down the line.
The solution:
Build a trusted relationship with another professional
Trust can be hard to come by, particularly when dealing with finances and decisions affecting your and your family’s future. Finding someone you can trust and that understands you, is vital. Building a relationship with healthy two-way communication enables greater transparency and understanding, allowing clients to work with their adviser to achieve their financial objectives during all of sport’s ups and downs.
Some key tips
Make sure you are choosing a partner that:
1. Is qualified and regulated. You want to find someone that matches your professionalism on the pitch and off it.
2. Understands the challenges that you face as a professional athlete.
3. Is positioned to work with you for years to come. Your financial life cycle is likely to be long and winding. You need an adviser or advice business that has a team in place that will support you during your career and the many, many years you likely have ahead of you when hang up the boots.
I hope this gives you some food for thought on the advantages of giving attention to your finances and acting on it whilst you’re playing. To come back to the title, can planning ahead really help the here and now? I truly believe that in addition to helping financially, giving sportspeople the reassurance and security for a better future can help their performance today.
Robbie White
Client Relationship Manager
