Young UHNW sportmen are eager to get on the property ladder as soon as possible
Matt Wotton, Executive Director and Team Leader Sports & Entertainment at Coutts, says young UHNW sport stars are eager to climb the property ladder but not always well advised on their inverstments.
What are the challenges UHNW sport stars face?
High performing sports athletes are frequently thrust rapidly into the public eye, and this may be accompanied by equally swift accumulation of wealth. One of the biggest challenges is how to effectively manage their new-found assets whilst continuing to focus on their sporting performance. Money attracts attention and such athletes ‚Äì many of whom are young and inexperienced in financial matters ‚Äì will have no shortage of advisers, family and friends offering guidance. Knowing who to trust in that situation, and which is ultimately the best path to follow can be a real conundrum.
What kind of advice do wealthy clients from sport industry seek most often?
Wealthy sports clients will need a myriad of advisers covering many aspects of their life. In financial terms the core advice team may be formed between the client wealth manager/banker and their accountant or solicitor who can ensure their underlying structure is appropriate. In my experience it is important to cover off the basics, not be overly-adventurous with tax planning and ensure the client focuses on building a nest egg which will serve them well through life.
What trends do you see in the private wealth industry, particularly related to sport?
In terms of trends, we are seeing many young sports stars wanting to get on the property ladder as soon as possible. Increased stamp duty for prime property has done little to dampen the desire for bricks and mortar in this community. Obtaining the right mortgage, both in terms of a competitive rate and sensible structure is therefore a frequent priority. Although high loan-to-valuation ratios are often necessary we work very hard to ensure that any loans we provide are affordable. We also believe it is important that loans are repaid through the period when the sports star’s earnings are at their peak ‚Äì providing a 25 year loan for a 30 year old footballer is not usually a responsible solution.