Odd jobs: my trickiest clients

Gareth Griffiths

Partner at Pro Sport Wealth Management (official partner of the Professional Footballers’ Association)

Client job: Athlete

 

Odd jobs: my trickiest clients

We predominantly work with footballers, as well as rugby players and other athletes. The average career length for a footballer is eight years so they have a very short window of opportunity in terms of the planning that is available to them.
Footballers now fall into two categories: players with pension benefit options that they had before A-Day in 2006 and players who became a professional after 2006 – the latter require different planning.

Tax is an important subject. It is going to be good news from April for footballers earning over £150,000, but it does encourage the athletes to look at alternative planning. Because of the government’s standpoint on the pension side, players have naturally looked at more exotic means of trying to mitigate tax and provide them with an income once they are no longer players. It has led to more esoteric investments which are inherently higher risk.

When it comes to advising athletes, fundamentals include how long they have been playing and what the planning options are (the majority of footballers like investing in property), as well as tax planning. Things are easier for the non-domiciled players as they have more opportunities to repatriate their money. The decision then has to be made for what vehicles are appropriate depending on where they are meant to be going after their contract finishes in the UK.

It is a specialist area and sometimes we inherit players who are mid-way through their careers. They might have done things that would be appropriate for a general member of the public with a 40 year career, but they may not tally with the objectives for a player with a short career window.

 

David Stone

Financial planner and partner at Mansion House Capital

Client job: Professional gambler

 

I was asked to arrange a mortgage for a professional gambler last year. It was a bit tricky to say the least, even though he was very successful and had a very large deposit. For some reason, the banks don’t seem to like that line of work.

Generally speaking, it was difficult to advise on this profession. He had significant cash at hand in the bank, perfectly kosher, and he had a proper job as well – although that was about 5% of what he earned through gambling. As you do not pay tax on gambling winnings, he had no taxable income and lenders do not like that. It is also worth noting there is no point in getting a pension if you can’t get tax relief.

He also had no interest in ISAs, VCTs or EISs. Basically any tax-efficient investment planning was out the window. He was earning hundreds of thousands of pounds a year, but did not pay any tax.

No-one could help but the problem for me was what else to help him with. In the end, he just wanted a buy-to-let mortgage and we managed to find a provider who would use his normal income as a sufficient amount. I tried to get him insurance but he wasn’t very risk averse and didn’t buy the concept.

All in all, I wouldn’t recommend professional gamblers as an ideal client niche.

 

James Garman

Chartered financial planner at Retirement Specialist

Client job: Stuntman

 

I have previously dealt with a professional stuntman. For someone who takes an enormous degree of personal risk in his profession he was, ironically, incredibly risk averse when it came to investing! He was quite happy to throw himself around the place at great risk to himself but was not prepared to take similar risks with his money.

It is tricky to advise someone in that sort of profession, especially as they are paid in quite a sporadic manner as well. They could be working on big projects and get paid incredibly well for a few months at a time, but then they might not get paid again for a year. Fortunately, I didn’t have to get into talking life insurance with him as he was young, single and independent; it wasn’t an issue. However, it must be very hard to get insurance for people in that line of work. They would have to go to specialist brokers or underwriters.

As this profession is not something you can do into your fifties or sixties (it is a young man’s game) he was looking to make provisions for his retirement, which he planned to take early. However, even though he made a lot of money in a short period of time, he simply was not prepared to take the investment risk necessary to do so.

I believe stuntmen have, on average, a shorter life expectancy. If you are going to retire young like him, you need to potentially take some more risk in order to build up a big enough pension fund to pull out early.

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