Amongst the many high profile cases of sportspeople losing control of their finances, the recent tale of tennis star Boris Becker, who reports having lost his £100m fortune, is one of the most astonishing.
“Unfortunately I wasn’t at all surprised by this story,” says Manny Cabrejas of Manchester-based wealth management agency Mamucium Capital. “I’ve seen this happen many times over. 78% of former NFL players go bankrupt or experience financial stress within two years of retirement. Widen that gap to five years, and 60% of NBA players are broke.”
Cabrejas is an expert in the field of financial planning and wealth management, having worked for several years as a private banker in Europe and the Middle East. During this time his high-profile clientele included Royalty and other high-net-worth individuals, and he maintained full responsibility and management of a $500 million investment mandate.
This phenomenon of sportspeople losing their fortunes has less to do with their profession, and more to do with the way they, and other high-net-worth individuals, are coerced into investing their money. Sports stars are perceived as being able to take on higher risks with a proportion of their investment portfolio due to their high net-worth classification.
Cabrejas continued: “I think it has more to do with life stage, investment experience and, most importantly of all, the advisors they decide to work with. I have seen examples where advisors have not explained the high-risk profile of these investments clearly as they were getting paid big commissions.”