WealthBriefing has continued its investigation into the world of sports wealth planning with an interview with the head of media and entertainment at Arbuthnot Latham, who spoke about attracting clients and working with agents.

Wealth in football is not just stagnating at big clubs such as Manchester City and Manchester United - it is also working its way down to the lower leagues of the English game. The highest transfer fee paid by an EFL Championship (second tier of English football) club was Wolves, which bought midfielder Ruben Neves for £16.11 million ($21.5 million) in July 2017 from Portuguese side FC Porto.

Of course, lower league football is not on the same level financially as the English Premier League, but Richard Kay, director and head of media and entertainment at private bank Arbuthnot Latham, told this publication that the firm is looking at the lower levels of football in England to find its next clients, who are the stars of the future.

“It is more around the relationships we build up with agents, accountants and clients themselves to lead us to the next clients,” said Kay. “Our approach is around existing contacts, and we are happy to concentrate, particularly in football, around players who are not yet in the Premier League. We see that there are players in this group who are earning substantial amounts of money and, who can be highlighted to us as real stars of the future -we are happy to look after these players and to grow with them.”

According to the Daily Mail in 2016, average basic pay (excluding bonuses) in the Championship was £324,250 per player per year during the 2015-2016 season. As footballers are working their way to the top, their wealth is unlikely to be extremely high, but  for a wealth management firm, it might be good to get a foot in the door before players reach the top of their game.

Kay, who was previously at Coutts for over 25 years and was one of the founding members of its sports and entertainment team, added: “For us that is a better story, because if you have a client that is playing for a championship club, and we look after them and help them make the right decisions as they progress from a young player to a senior Premier League player that is a great, credible story for us to use to entice other players and for them to trust in our approach.”

Young players from the lower tiers of English football are very valuable to clubs in the Premier League; for example, Manchester United is weighing up buying Fulham’s Ryan Sessegnon, a 17-year-old England youth international, for around £50 million, the Manchester Evening News reported last week.

Agents
“If you don’t work with the agent then you are not going to get very far, because the agent is the person that is generally the most trusted,” said Kay. “We have to work with them understand the boundaries, and know what it is that they want us to do for their client, making sure that we don’t step over the line. As the relationship develops between you, agent and client then the boundaries may change as mutual trust develops.

“This is where experience comes to the fore particularly when advising a client to take a course of action that may be contrary to their current view. There needs to be a united front, to help discuss issues with the client so they understand and receive a consistent message.”

The Arbuthnot Latham sports, media and entertainment team, based in London, comprises of seven bankers, a wealth manager and six assistants.

Sports wealth planning is starting to become a mainstream segment within the wealth management industry, as more money is pumped into the world of football, tennis, Formula 1 and rugby. This publication has spoken to various institutions on the subject, including Kleinwort Hambros, RBC Wealth Management and Coutts.