The research found that 48% of athletes have not thought about planning their finances.
These figures follow a recently released study by the Professional Players Federation, that revealed more than half of retired athletes reported financial difficulties within five years of their careers ending.
Marc Anderman, director of MA Sports Consulting, said: “It is easy to assume that professional sportsmen and sportswomen have a path to riches. The reality is that most sporting careers are relatively short even without injury and very few reach those heights.
“One of the goals of this study […] is to hopefully generate information that can be used to assist sportsmen and sportswomen, especially in the early part of their careers, to understand the importance of planning for the future.”
Darren Smith, head of OMW’s Financial Adviser School, added that financial advice could become a career for retired athletes.
“A lot of people dismiss the idea of being a financial adviser because they don’t have any knowledge of finance, but finance is just one part of it, and a part that we can teach.
“Sportspeople have a myriad of transferable skills that would make them perfect candidates,” Smith said.
Second career
FAS and MA’s research additionally found that 90% of professional sportspeople have considered a second career, while just 46% had received information on getting a second career.
Other key findings from the study include:
- Sportswomen (61%) were more likely than their male peers to have a financial plan (43%).
- Almost two-thirds of the sample felt that they had received advice regarding their finances. However, once informal advice from family and friends is excluded this falls to just a third.
- 59% of the athletes would consider working within the financial services industry.
Film tax schemes
The FAS and MA’s research has been released in the wake of law firm Peters & Peters representing a number of claimants, including several sports stars, who are seeking redress for losses incurred to HM Revenue & Customs.
They claim the losses arose as a consequence of three Scion film schemes that were promoted and managed by Scion Limited and its subsidiary companies.
Peters & Peters declined to name any of its clients or how much they are looking to recoup.
Scion promoted a number of tax schemes for films such as Atonement, Eastern Promises and Mr Bean’s Holiday.
As a result of the mis-selling, the law firm says investors face a significant tax liability.
Ingenious
In August 2016, HMRC won a case against Ingenious Film Partners claiming that the scheme promoted artificially created losses through investments in films so investors could claim tax relief. Again, a number of ex-athletes were involved.
The court found that the schemes were not legitimate investments but a way for investors to avoid paying tax.
It ruled that investors should only receive tax relief on 30% of their investment, not 100%, resulting in the £700m ($903m, €760m) tax bill.
The bill prompted Ingenious investors, including 45 former English Premier League footballers, to sue the professional advisers linked to the scheme with the help of Peters & Peters.
The case is ongoing.
Maria Madrid says:
So 48% of “sports people” fail to plan for their financial future and more than half of them report financial difficulties within five years of their careers ending…
Events suggests that taking advice (instead of leaving money “under-the-mattress”) may not always be the best strategy. It would be interesting to learn if the number of those who ran into “difficulties “ after taking advice was greater than the number those who took no advice at all.
And what are the “myriad of skills” which sports people can transfer to the financial services advisory industry? Have anthropologists identified sports people as having proportionally superior levels of skills in higher mathematics (algebra, calculus, analysis, combinatorics, logic, mathematical physics, differential equations etc ) not forgetting the all important levels in basic precepts of honesty, transparency, morality and ethics?
Wall Street is the only place people ride to in a Rolls Royce to get advice from people who take the subway. Warren Buffet
I’m a financial adviser. I invest other peoples money until there’s none left. Woody Allen
The banks will lend you an umbrella when the sun shines but take it away again when it rains. Anon