Michael Jordan, (AP Photo/Gerry Broome)
Michael Jordan, (AP Photo/Gerry Broome)

Money rush: helping sports stars manage their wealth

By Stonehage Fleming Time of article published Aug 28, 2019

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This article was initially published in the 2nd-quarter 2019 edition of Personal Finance magazine.

In comparison with others, whose greatest earning power comes in middle age, sports stars have certain disadvantages, which help define their need for financial advice and other professional support:

They acquire wealth at an age when they have had little opportunity to develop the knowledge and skills to manage it or to handle the impact on their personal life and personal development.

Because of their youth and inexperience, they are heavily dependent on agents and other professionals to look after their interests, both in the exploitation of their talents and in the management of their affairs.

Because they are “in the public eye” with a high media profile, they are obvious targets for those who wish to take advantage of them.

As their sports careers come to an end, they have to prepare for a second career, which may be far less remunerative and less glamorous.

Most have to rely significantly on wealth amassed by their mid-thirties to provide for their lifelong needs. If they fail to get it right, they may never get another opportunity

Of course, needs vary from sport to sport and from one individual to another, depending on their abilities, personalities and tastes. Footballers are employees of their clubs, whereas golfers and tennis players are self-employed and the arrangements for racing drivers depend very much on individual circumstances. Some sportsmen/women have obvious potential to make a second career in management or the media; others do not. Some have the makings of reasonably astute business people and investors, with potential to leverage their assets and their names; others do not.


During the “golden years”, the sportsperson is dedicating himself almost entirely to success in his or her sport, almost to the exclusion of everything else. He or she has a large support team to keep them at peak performance level, both physically and mentally and most need comparable support in looking after their longer-term life interests, both financially and otherwise. The key difference between a sports star and most other successful individuals is that their earnings generally peak in their twenties and early thirties.

He or she will probably need at least three main types of advisers, who ideally will work to together as a team:

1. Agent

Agents will manage relationships with the key sources of revenue – the clubs in the case of footballers, the tour organisers in the case of golfers and tennis players, and the teams in the case of racing drivers. Most agents also play a role in negotiating and managing sponsorship agreements and “image rights” (the ability to exploit your name).

Agents are thus in a position of great trust, with influence over very large sums of money on behalf of relatively vulnerable individuals. Most sportspeople will have professional agents, often working for a large organisation which has considerable experience in the relevant sport and all the necessary contacts to operate effectively.

Some, however, prefer to place their trust in family members or friends, because the relationship of total personal trust is more important than the experience, networks and support infrastructure of larger groups. There is no right or wrong answer to this – it is a value decision which will depend on the preferences and instincts of the individual sportsperson and those who influence them.

The most important factor is a close alignment between the interests of the sportsperson with those of the agent, especially where there is an obvious conflict between the financial temptation of a short-term contract and the sportsperson’s long-term career and life interests.

2. Mentor

This will often be an informal role, but nonetheless highly important and perhaps the most important of all. Needs will vary, but it seems obvious that suddenly coming into large sums of money has a major impact on the lives of young people, which separates them from their peers. It changes the dynamics of personal relationships, interferes with the natural process of personal development and attracts numerous followers, motivated by their wealth and fame, as much as personal friendship.

A young sportsperson has to cope with wealth and fame with very little preparation and most will need a mentor and sounding board to guide them through all the choices and pitfalls which now lay in front of them.

The mentor will add perspective and context to a situation, to keep the sportsperson grounded when the media build them up to disproportionate heights and to be there when they face adversity.

As well as his or her career, the sportsperson needs to cope with other life events, including relationships, marriage, births, deaths and sometimes divorce, all of which can be made more challenging because of the wealth or media attention. Spouses too can be affected by the wealth and publicity.

The mentor or life coach will also play an important role in helping the sportsperson prepare for a second career, helping them assess their strengths and weaknesses and suitability for a variety of possible occupations.

3. Financial planner / wealth manager

Long-term planning of finances is inextricably linked to decisions about career and lifestyle and too many sportspeople have suffered from advisers who take only a partial, short-term view.

Most stars have only 10 to 15 years to convert temporary revenues into soundly based wealth, which will help provide for themselves and their families for the rest of their lives and beyond.

At the most basic level this obviously requires some financial disciplines to avoid the temptations of excessive expenditure and to ensure enough is put aside to invest for the long term. While this is obvious, it is not always easy, depending on the reaction of the individual, his or her spouse and their circle of friends or associates, who may encourage profligacy.

The financial management needs fall broadly under the following headings:

  • Managing day-to-day expenditure in support of lifestyle needs of the individual and family.
  • Where desired, to provide support for other family members (such as parents) on an agreed and controlled basis.
  • Making long-term investments (mainly in equities, fixed interest and property), to build a capital base that will provide for their financial needs when earnings have diminished.
  • Managing, reviewing and administering the investment portfolio.
  • Managing the risks (including insurance), particularly the risk of injury, which may cause unexpected loss of income or, in extreme circumstances, a premature end to the career.

Setting up appropriate holding structures for the assets to promote tax efficiency, while resisting the temptation of artificial tax-avoidance “schemes” (which may fail, resulting in heavy fines and adverse publicity).

Where desired and appropriate, to consider whether and how to allocate funds for participation in private ventures (including property) often brought to them by friends and associates (most sportsmen/women have no experience in this area, which carries considerable risk).

Where appropriate, to consider allocating funds to invest in building a platform for a second career.

In the most straightforward cases, the sportsperson is an employee of a club, but there is often significant additional income from other sources, which must be properly channelled and managed.

Where the sportsperson is self-employed, there may need to be appropriate advice, structures (trusts and companies) and administration to support their activities, especially where those activities are cross borders, with income and costs arising in a number of different countries. This will range from setting up and running special purpose companies and overseeing tax affairs to sending out invoices, running banks accounts, and handling sponsorship arrangements.

For savings and investments, most sportspeople will be best advised to stick to conventional quoted investments and products, fully managed by professional managers. Others may have the desire and the capability to be a little more entrepreneurial, allocating a portion of their wealth to direct property investments, private equity (non-listed companies) and even private ventures. Some of these might also be linked to the exploitation of their own name, personality and passions, perhaps providing the foundation for a second career.

For those sportspeople with entrepreneurial ambitions, who wish to use their name and their wealth to access direct business opportunities, their needs will thus be far greater. They will require the support of a wealth manager who has both the platform and the experience to help them build a business or a portfolio of direct investments, in which they become personally involved.

There are many examples of sportspeople who become successful entrepreneurs, but even more examples of those who fail to make that transition. It is a key role of the wealth manager to ensure proper disciplines are put in place and to question and challenge every potential investment they consider.

Young sportspeople generally have little or no experience of managing wealth but it is vital that they become fully engaged in the process so that they understand the implications of all the decisions being made, particularly the risks. Transparency and joint-learning are crucial to a successful, long-term, mutually beneficial relationship.


No planning, financial or otherwise, can take place without some consideration of the wider picture, including the longer-term future. As a sportsperson’s career progresses, the need to think about what happens next becomes increasingly important and this may well have a significant impact on the management of his or her affairs.

It is not just the sudden loss of income. After coming off the adrenaline high and fame of a sports career, the challenge of making a transition to a less intense, less focused and less high profile occupation can be quite daunting. This is especially so if the sportsperson is suddenly on their own, without any of the large support team which has helped them through their career and upon whom they have come to depend.

Most people need a sense of purpose to motivate them and only a small number of sportspeople have the natural ability to move seamlessly into management or coaching roles within their own sport. An equally small number have the talent and communication skills to make a second career in the media.

For most sportspeople, their second career will be well out of the public eye and may or may not have some connection with the sport in which they made their name. Hopefully, if a sound capital base has been established, the need for income will be secondary to the need for a degree of personal fulfilment. Many will, for example, pursue activities which help the development of young people, making a contribution to society and perhaps to the grass roots of their sport.

However, a significant number of sportspeople with entrepreneurial flair try to use their name and contacts, and some of their wealth, to become involved in business and direct investment activities. Typically this may range from property investment and branded sports clubs to hospitality, travel, branded clothing and even specialist foods and beverages.

Whatever the preferred route, it is usually advisable to lay the foundation before the sports career reaches its end, especially if it involves leveraging the individual’s personal brand and contacts. All of this has considerable relevance to the management of wealth:

because the future plans will affect the wealth management objectives; and

because there may be a need to allocate funds to help finance this transition, especially if it involves setting up a business or participating in joint venture investments


Ideally, in making these major decisions, perhaps over a considerable time, the sportsperson will draw on the collective experience of his mentor, agent and wealth manager, working together as a team, which will not only help plan the future, but support him or her through the difficult transition period.

For the reasons stated, there are very few people who have greater need than professional sportspeople for “trusted advisers”. The precise definition of the different roles may vary in accordance with their capabilities and the particular circumstances of their client, but the central point is that none of them can operate effectively without understanding the whole picture.

For many sportspeople, particularly those with complex affairs, the role of the wealth manager resembles the holistic approach of a family office, where looking after their arrangements goes far beyond the management of the money itself. The wealth manager needs a range of experience which not only encompasses financial matters, but supports the client in every major decision, as well as in the day to day demands of being a highly successful individual, with a variety of different interests.

This article was written by the following at Stonehage Fleming: Stuart Makin (partner and head of sports and entertainment), Paul Weldon (director, sports and entertainment), Glynn Chambers (senior associate, sports and entertainment), and Matthew Fleming (partner and head of family governance and succession). It first appeared on the Stonehage Fleming website and is republished by kind permission.

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