By Philip Carlton, Client Director
It is the height of the summer sports season and the world is enthralled with various events that have finally allowed us to spectate and indulge our passion for good, clean, competitive sport. But behind the scenes of Wimbledon, the Olympics, the Paralympics and the Euro football championships is a complex framework of wealth management that may allow the biggest stars to grow, evolve and to take control of their accumulating assets in the most safe and secure manner possible.
Often, at the beginning of a sport’s client’s journey with Highvern, the focus is on well advised, robust structuring, protecting confidentiality where possible and ensuring that current salary earnings, bonuses etc, which can arise from multiple jurisdictions, are monitored, accounted for, and reported correctly. Whilst the client is usually at the pinnacle in their career, it is not always the case and working with them and their advisers on new contractual engagements as they progress in their chosen area of sport is a fundamental service that we offer.
From intellectual property and image rights to employment contracts with bonus payments, the ring-fencing of high valued assets to personal investment projects and family office structures – the variety of financial considerations that sporting stars must consider is vast and can often be complicated. Having a trusted professional to guide you through the process is paramount with every athlete likely to have a book of expert advisors at their disposal.
As well as being at the top of their chosen sport, a sports client may also look to diversify their assets from sports earnings and invest in different asset classes, often with an eye on longer term succession planning for their families. They rarely have time to focus on this alone and supported by Highvern’s strong partnerships with many of the world’s leading asset managers/asset specialists, Highvern can guide and support the client in these important areas. Protecting and promoting the client’s ‘brand’ is also key and assisting the client in using their name or image to further a particular cause or interest is at the heart of what we do. Many sporting clients have philanthropic vision and ambition or a keen passion to improve the lives of others or the world in which we live and helping them achieve these goals is not only part of the service but hugely interesting and fulfilling for the team at Highvern.
Jersey is home to a few sporting heroes of its own and home to even more structures for global names as part of its world leading finance centre. Highvern have long looked after the affairs of sports stars, guiding them through the changes in the finance world which has included many fiscal changes as well as the move to global tax transparency and exchange of information through FATCA and the Common Reporting Standards. Whilst these famous names receive the same high level of client service as all our clients, there are further considerations that we must take into account, adherence to which will ensure we continue to be considered valued as a trusted professional partner.
Keeping it simple
In the past there have been plenty of tax driven structures aimed at sporting stars that made use of loopholes and were considered higher risk and attracted unwanted attention. Sporting professionals are always at risk of being taken advantage of and misled and mis-sold financial products which is why we find it important to keep structures as simple as possible and use vehicles that have been tried and tested. Highvern focus on the value and efficiencies we can offer through seamless administration of familiar structures, in a neutral jurisdiction.
Perhaps the largest concern for any high-profile individual is the risk to their good name and the damage that can be caused by negative media. Plenty of scandals over the years have made stars much more cautious with their wealth planning and mitigation of risk is in our experience top of their list. Purchasing assets in their own name leaves sporting professionals open to risk, not only of reputation if something untoward were to happen but also that they could be targeted for fraud if their identity and ownership is known. Structuring through Highvern provides them with the comfort of anonymity, placing a corporate vehicle between them and the assets as well as ring-fencing businesses, high value assets and activities as part of a much wider family office offering.
Different to anonymity, the discretion and confidence of a private wealth advisor is just as important in this high-octane world. Highvern would likely have access to private information of the individual including income streams, net worth etc all which could be misused if in the wrong hands. We always work with discretion and complete confidentiality, utilising non-disclosure agreements when the circumstance demands it, to ensure that our client is re-assured with our service. We are able to provide regulatory information whilst safeguarding sensitive details from the public eye. This important area is an ever changing landscape and our clients can be safe in the knowledge that we will always communicate with them and review their structuring if legislative and regulatory changes impact on them and their wealth structures.
Whilst tax advantages are less of a factor when it comes to establishing structures, there are benefits for international sports stars of using Jersey to hold assets. For those that hold assets across the globe Jersey provides diversification and the comfort of a stable jurisdiction with its own government. Our tax neutrality is a draw for certain business activities, as well as helping with forced heirship and succession planning. Jersey is a world-renowned finance centre with the experience and expertise to work in tandem with global professional partners.
Managing such structures as these can often be as exciting as watching our clients perform, such is the fast-paced nature of the sporting world. For those of us with a keen interest it is fascinating to be privy to the mechanics that go on behind the scenes and the translation of what a win can look like for various stars. We may not ever have the chance to grace the pitch of Wembley, play doubles at Wimbledon, or roar round the track at Silverstone but in our own small way we always feel part of the winning team through our important role at Highvern.