When it comes to sports, football is the most famous in Europe. The game is deeply rooted in daily life and cultural habits of several countries like England, Portugal, Spain, France, Germany, Italy and the list goes on. Rumour has it that even Queen Elizabeth II in her teenage years used to disguise herself in order to participate in football matches played near Buckingham Palace.
European colonists and expats have given football a widespread reach that has made it the world’s most popular sport by far. Nowadays, millions of fans around the world follow European championships. The biggest reason for that is the fact that Europe is home to the most prestigious professional football leagues, and the best players in the world fight for a spot on their teams.
In the last two decades, football has become a multi-million euro industry. The globalisation of the game has made international players increasingly in demand by teams all over the world. In hopes of getting an early glimpse at future stars, European teams are sending scouts abroad to find exportable talent while they are still teenagers. Likewise, local teams are signing kids and willing to keep them until their value increases and they can be sold to European clubs. As a result, Europe ends up welcoming many international football players who are likely to be well remunerated and in need of further advice to structure and manage their wealth.
Wealth management and the peculiarities of a professional football player
The particular situation of a professional football player requires a different approach. The mix of high salaries, young age and usual lack of financial education given focus on the game result in a false sense of financial security and high expenditures. This combination of factors can be even worse when you take into consideration that few professional players earn six-figure monthly salaries. Due to early retirement in this business, athletes need to plan and save for the future in order to avoid financial troubles after retirement.
On top of that, international mobility is the rule in an ever more connected world and those athletes end up moving to different places before retiring and going back to their home country. Thus, advisors need to evaluate which is the best tool to consolidate, protect and invest their international wealth, as well the tax and legal challenges they might face within the different jurisdictions they end up living in throughout their careers.
A versatile wealth structuring solution
When dealing with the future of international football players, stakeholders within the industry must be aware that a holistic approach is essential. This is especially relevant after having this niche of clients caught up in accusations of tax fraud and other financial crimes in Europe during the past years. A robust and compliant tool must be chosen and a portable solution is necessary due to their regular moves. Hence, life assurance has seen a growing demand from this community as advisors learn about the product and its benefits for wealth management and asset protection.
Life assurance is a structure fully recognised and compliant in Europe, usually enjoying a favourable tax treatment as it forces individuals into a savings regime. It is also used as a powerful tool to consolidate and transfer wealth. This dynamic product can provide cross-border flexibility and unique security of a contract made in a top-investment jurisdiction such as Luxembourg, which is protected by a rigorous regime known as the Triangle of Security. Besides, Luxembourg offers tax neutrality, with taxation based on the policyholder’s country of residence.
In terms of taxation, this product usually offers full tax deferral until surrender and tax-free death benefits depending on the country of residency. In terms of succession, a life assurance policy can protect both spouses if one predeceases the other and facilitate an eventual cross-border inheritance procedure. Additionally, the beneficiary clause functions as a will and the policyholder is able to change beneficiaries at any time. Apart from that, death benefits arising from life insurance policies are usually not deemed as part of the deceased’s estate in most countries. This facilitates transferring wealth to beneficiaries in case of death, as the settlement period should not exceed 30 days from the date of receipt by the insurance company of all the documents necessary for payment.
In addition, contracts can be tailor-made to offer portability whenever international football players relocate to different jurisdictions during their career. In case of a move, a thorough analysis must take place before proceeding with any contractual changes necessary to obtain legal and tax recognition of the policy at the destination country. At the same time, such changes must respect the initial objectives of the policyholder so the solution remains appropriate and efficient.
This tool may also offer a flexible and wide range of underlying assets, such as external and internal collective funds, as well as dedicated funds that allow discretionary management according to the policyholder’s personal objectives. Another interesting feature is that such solution allows clients to withdraw at any time a portion of their original investment if needed. It also gives the possibility to keep the same investment manager and custodian bank for the underlying assets during the policy lifetime.
In summary, life assurance might be the best option for international players living in Europe to structure and manage their wealth. At OneLife, we promote research into the challenges that lay ahead in dealing with professional football players’ finances. By supporting this initiative, we strongly desire to make stakeholders within this industry aware that a sophisticated approach is imperative to succeed when dealing with the future of football players. We cannot wait to hear from you!
Author: Taïza Ferreira 
