Take the income stream of sports professionals such as Premier League footballers, for example. They accumulate most of their wealth in their 20s and so their income line will be heading north fast. This sizeable income stream will drop off considerably as they pass their peak in their 30s and look to hang up their boots for good. For sports professionals, the financial focus is on conservative long-term planning and creating a diversified income stream for later life (or plans for a second career) while they are generating substantial wealth in their first career. Long-term protection for their family is equally important.

How different incomes fluctuates

On the other hand, entrepreneurs tend to have very little income to begin with, as they pour all their energy and resources into their business – their income line will be low and flat to begin with. If all the hard work pays off and the company becomes a commercial success, the entrepreneur may get the opportunity to sell or realise the equity they have built up, which will result in the income line spiking. Entrepreneurs building up to a sale, for example, will need to consider preserving the value of their company. In such circumstances, they may want to reduce their drawing to preserve this value in the years leading up to the sale. Subsequently, this loss of drawing income will need to be funded and will need specialist help.

Other professions, such as those in the arts or creative industries, may accumulate income at irregular intervals (and at different levels) depending on the painting they sell or the film they star in or produce. To help mitigate the challenges creatives and artists face, they need to work with financial professionals who can help them to draw up a robust financial plan.

Different income patterns, same goal

Irrespective of the income line’s shape, life goes on. There are families to raise, homes to be bought, wealth to be accumulated, and retirement and succession plans to consider. This is why managing fluctuating income is just part of the story.

For everyone, expenditure fluctuates throughout their lives. There will be times when it increases, such as buying a house or starting a family, while later down the line school fees could be a consideration. Yet regardless of profession, the central objective remains the same: to ensure they have enough money saved to live on for the rest of their life.

At the heart of any well-thought-out plan is a cash flow forecast that will help map out financial requirements and demonstrate how various scenarios might affect people’s needs. Not only does a clear cash flow plan help people to save and eventually spend their money in the most tax-efficient manner, but it also helps answer two big questions: how much do they need and how long will it last? These are not easy to answer definitively, but the overall aim should be to establish a framework to arrive at a considered and sustainable plan that is flexible enough to cope with changes in circumstances.

How Weatherbys can help

Many people with irregular or fluctuating incomes need a bank that does not conform to the rigidity of ticking boxes but looks at the full picture of a client’s finances to make a pragmatic and informed decision. They need a bank that treats their clients as individuals and has the time, inclination and experience to manage people’s financial affairs that is not dictated by a traditional monthly pay cheque.

At Weatherbys, we think of the pattern of cash flows in terms of two phases. There’s the accumulation phase, where you are earning a living, and then there’s the utilisation phase, using the wealth you have accumulated to finance your retirement.

Because we know that life doesn’t follow a straight line, a cash flow plan looks at your current assets, your likely future spending needs and your financial goals and how different scenarios – from life events to investment returns – might impact these plans. So, while saving and investing is vital, life is more complicated than that. During certain phases of our lives, we find ourselves needing to spend more. At other times, we may be in a position to invest significantly larger sums.

We look at the full picture of your finances. Once we have understood your goals and looked at your current investments, we will apply our three key areas of expertise: cash flow and tax planning, structuring your affairs efficiently, and investments.

To find out more about how we can help highly skilled professionals across a variety of fields – from sports professionals to entrepreneurs to those who work in the creative and arts industries – download our Spotlight on: Fluctuating Income below:

Important information
Investments can go up and down in value and you may not get back the full amount originally invested.

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Our goal is to make our sports clients’ lives, irrespective of their sport, as easy as possible, by helping them with their day-to-day banking needs. After all, our sports professional clients want to have total focus on their sporting career. In many ways, our service is a one-stop financial shop where we can help with banking – both personal and business – investments, lending and insurance.

Since our founding over 250 years ago linked to horse racing, one of the longest-established sports, we have always innovated while also maintaining our focus on providing exceptional levels of personal service. We recognise that today’s sporting professionals also have specific and often complex needs.

A truly bespoke service

As with all our private bank clients, our service is truly bespoke. For example, we were able to help with the lending requirements for a client that was moving towards the end of their career, when other lenders may not have been able to. We arranged a bridging loan that was converted to a long-term mortgage on an interest-only basis, which could then be cleared faster by bullet repayments.

“Unlike most people who plan to retire in their 60s, sports professionals are likely to retire from competitive sport in their 30s” – Rebekah Guntrip, Private Banker

It’s the personal service that many of our clients particularly like, and our trust, which is crucial given the attention many sports stars receive. They can make contact whenever they need to. Indeed, it’s not unusual to receive a message at the weekend on a card-related matter that needs clearing up sooner rather than later. But that is part and parcel of our service – making their financial life easy.

Image rights

Many of our sports clients have an Image Rights company. In this case we can provide business banking alongside their personal banking services, meaning all their financial affairs can be looked after in one place.

Investment & wealth advice

In addition to our standard private banking services – current accounts, deposit accounts, lending and foreign exchange – we also offer our Investment & Wealth Advice service.

As with all our clients at Weatherbys Private Bank, we look at every aspect of their financial life to gain a clear picture of their finances – and it is no different for sports professionals. We consider assets, income and outgoings, and assess future spending requirements. Once we have taken the time to understand their goals and looked at their current investments, we apply our three key areas of expertise: cash flow and tax planning, structuring affairs efficiently, and investments.

As part of this, we focus on having a financial roadmap in place, in the form of a cash flow plan, that will help clients to map out their financial requirements and demonstrate how various scenarios might affect those needs.

Why you need a different cash flow plan as a sports professional

The key difference for our sports clients when it comes to financial planning is that the window for earning significant amounts of money is limited – professional sports is not like a typical career. Unlike most people who plan to retire in their 60s, sports professionals are likely to retire from competitive sport in their 30s (depending on the sport). Every client is unique – for example, a rugby player’s professional career-span may be longer depending on whether they play in the backs or the forwards. We have also had a client whose career ended abruptly due to injury. So we check to see whether the appropriate insurances are in place and can draw up emergency financial plans if required.

Managing a fluctuating income

Income can also frequently change – sometimes sports professionals are paid a monthly salary and at other times a large lump sum. We help our sports clients adjust to the way their income comes in. Pay can rise significantly if they become an international, for instance, and they will need to have a cash flow plan to accommodate this.

The post Sports professionals: a specialist banking service for all your financial needs appeared first on Weatherbys Private Bank.