the financial broker - brokers ireland · spring 2017 3 we’ve told monthly policy fees where to...

official magazine of the professional insurance brokers association (piba)

The Financial Broker

REGULARSChairman’s Report .............................................................. 1Editorial ................................................................................ 3PIBA CEO ............................................................................... 5PIBA Compliance Manager ......................................... 16PIBA COO ........................................................................... 31PIBA Member Profile: Marie Ainsworth, Mount Street Group ....................................................... 35Crossword ........................................................................... 36

OTHER ARTICLESSpring Cleaning ................................................................... 8Innovation – from Driverless Cars to Client Management .................................................... 9Overview of new Regulations on Beneficial Ownership ...................................................... 10How going back to Basics can build Success .......... 11Qualifying for the State Pension ................................. 12MyFolio – The Difference is in the Detail ............... 14Investing in Uncertain Times ..................................... 17Financial Broker Conference 2017 [photo spread] ................................................................. 18Short-term Life vs. long-term Futures ........................ 21Capital Acquisitions Tax Changes in Finance Act 2016 ...................................................... 22How do you build effective Partnerships with Accountants? ........................................................... 23PIBA Winter CPD Bootcamp 2016 [photo spread] ................................................................. 26The changing Role of Underwriting ....................... 28Financial Planning matters for Clients on Separation or Divorce ............................. 29Who is Future Cashflow Planning for? ................... 30Can you objectively justify your Mandatory Retirement Age? ..................................... 33The Importance of understanding your Policy Obligations ................................................. 34

NEWSIndustry Round-Up ......................................................... 24PIBA Update ...................................................................... 32

A level Playing Field PIBA Meets … Dermot Gaskin Establishing Trust in Brokers

spring 2017

56

FEATUREDA level Playing Field ............................................................ 5PIBA Meets … Dermot Gaskin ........................................ 6Establishing Trust in Brokers ......................................... 13

Contents

Personalised Pension Guidepath Broker Ad 1216.indd 1 22/12/2016 10:40

Committee MembersRóisín Clarke ChairmanRodney Croly Vice ChairmanCathal Coates SecretaryCiaran Blackall TreasurerJoe BruenDuncan DukeDermot MartinSamantha NagleMark Nugent

Sub-Committee ChairpersonsLegislation & Compliance Mark NugentBroker Representation Duncan DukePR & Communications Samantha Nagle

Chief Executive: Diarmuid Kelly

The Financial Broker14B Cashel Business Centre, Cashel Road, Crumlin, Dublin 12, D12 PN23Tel: (01) 492 2202 • Fax: (01) 499 1569Email: [email protected] • Website: www.piba.ie

Editorial Group Sarah Nolan, Rachel McGovern, Frank D’Arcy, Samantha Nagle, Mark NugentEditor Donal Milmo-Penny

Publisher: Salient International Group, Naas, Co. Kildare, W91 KR8WTel: (045) 866057 & (087) 254 3463Design: Salient Print Management, Naas, Co. Kildare, W91 KR8WTel: (045) 866057 & (087) 254 3463

Views expressed by contributors or correspondents are not necessarily those of PIBA* or the Publisher** or Designer*** and neither PIBA nor the Publisher nor Designer accepts any responsibility whatsoever for them in any form.*Professional Insurance Brokers Association. ** Salient International Group. *** Salient Print Management.

NO ONE CAN.HOWEVER 1 IN 3 FAMILIES STILL HAVE NO FINANCIAL PROTECTION.

IRISH LIFE PRESENTS

redicting the FutureP

Your number 1 supporter Information correct at January 2017.Research conducted by Red C research company.Irish Life Assurance plc is regulated by the Central Bank of Ireland.

That’s how many parents say they have no Life, Specified Illness or Income Protection, whatsoever. To help support you to change that, we’ve launched a major national advertising and PR campaign. The key message is your clients can be better prepared by making sure their income is protected.

To find out more about the range of supports available, ask your account manager or visit bline.ie today.

ILA 12908 (NPI 01-17).indd 1 19/01/2017 19:34

investment funds

New Ireland Assurance Company plc is regulated by the Central Bank of Ireland. A member of Bank of Ireland Group. The Company may hold units in the funds mentioned on its own account.

Warning: The value of your investment may go down as well as up.Warning: These funds may be affected by changes in currency exchange rates.Warning: If you invest in these funds you may lose some or all of the money that you invest.

newireland.ie Talk to your Broker Consultant

€1.3 Billion A.U.M.*

Access to over 15 Funds

10 Global Fund Managers

Celebrating 3 Strong Years

* Source: New Ireland. Assets Under Management as at 1 January 2017.Terms and conditions apply.


Spring 2017 1

róisín clarkePIBA Chairman

We include a number of articles in this spring 2017 issue of the magazine that relate to some subjects addressed at our recent Financial Broker Annual Conference. For example, we have an article from Ipsos MRBI regarding strengthening client trust in the Broker, one from PwC in relation to the ongoing PIBA project on the standardised CRM data set, and also one from Harvest Financial on the very topical subject of financial planning following a relationship breakdown.

The Financial Broker conference itself, which was held in Citywest Hotel on the 23rd of February, was very well received – with at least one Broker stating afterwards that they wished the conference was longer. It was indeed a very good opportunity to reflect on Broker business, and on what we can do to adapt to the ever changing environment in which we carry out our business.

In this issue of the magazine we also have articles from, amongst others, Tara Grehan of Datalytics on spring cleaning our database, Rachel McGovern, Chief Operations Officer of PIBA on the new Help to Buy scheme for first time buyers, Eamonn Twomey of StepChange on building effective partnerships with accountants, and our CEO, Diarmuid Kelly on trying to achieve a level playing field.

I hope that you have also had the opportunity to read the recently issued Financial Broker Guide to Information Technology and Cybersecurity Risk. In this magazine, our PIBA Compliance Manager, Elizabeth Smith Wright addresses some of the important areas covered within the guide.

I recently attended the first BIPAR Academy, which was held as part of the BIPAR mid-term meetings in the Shelbourne Hotel, Dublin on the 16th of February 2017.

PIBA has been a member of BIPAR, The European Federation of Insurance Intermediaries, since 2010.

Our membership of BIPAR allows PIBA to give input at the initial stages of the formation of EU legislation: legislation that will eventually impact both on Financial and on Insurance

Brokers in Ireland.The session was opened by the current Minister for

Financial Services, Eoghan Murphy, who spoke about how Financial Services are integral to the Irish economy.

We also heard from some interesting and informative speakers. David Cowan from EIOPA (European System of Financial Supervisors) spoke in relation to technical advice on delegated acts such as the IDD (Insurance Distribution Directive) and other level 2 and 3 measures, and Evert van Walsum of ESMA (European Securities and Markets Authority) spoke on the topic of the financial intermediation market in 2020.

This was followed by a talk about the impact of cognitive technology on the insurance sector from Stefan Mueck, CTO Cognitive Solutions Team Financial Services (Europe) of IBM. Coming from outside of the insurance world, Stefan gave an interesting and sobering forecast of how it is expected that information and advice will be delivered in the future, in our increasingly technology-dependent world.

Sophie Nerbonne, Director of Compliance Directorate, CNIL (the French Data Protection Authority) then spoke about data protection and the impact of the General Data Protection Regulation (GDPR), which will come into force on the 25th of May 2018.

The last speaker of the day was Bernard Sheridan, Director of Consumer Protection with the Central Bank of Ireland. Bernard spoke about the minimum competency requirements, how Intermediaries are paid, and product oversight governance.

While we watch and prepare for, and also inform ourselves regarding changes in our business world, we know that the basics of advising our customers well, and guiding them towards long-term financial security is, and always will be, fundamental to our success as Financial Brokers.

Go n-éirí libh.

Chairman’s Report

We’ve told monthly policy fees where to go. So you know where to come.

Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is also regulated in the UK: by the Prudential Regulation Authority

for prudential rules and, to a limited extent, by the Financial Conduct Authority for applicable UK conduct rules. Registered Branch Office in Ireland (No 906464) at One Park Place, Hatch Street, Dublin 2. Tel (01) 898 7910 Web www.avivabroker.ie Registered in England (3253947) at Wellington Row, York, YO90 1WR.

At Aviva, we’re committed to making our Savings, Investments and Pensions as clear and simple as possible.

That’s why we’re removing the monthly policy fee and some other charges for new and existing customers.

It’s just one way we’re proud to lead the market in simplifying our products.

Get the details: See www.avivabroker.ie or speak to your broker consultant

So long. Farewell.

Auf Wiedersehen.

Goodbye!So long. Farewell.

Auf Wiedersehen.

Goodbye!

IBA policy fee removal feb '17.indd 1 17/01/2017 15:41

Spring 2017 3

We’ve told monthly policy fees where to go. So you know where to come.

Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Aviva Life & Pensions UK Limited, trading as Aviva Life & Pensions Ireland, is also regulated in the UK: by the Prudential Regulation Authority

for prudential rules and, to a limited extent, by the Financial Conduct Authority for applicable UK conduct rules. Registered Branch Office in Ireland (No 906464) at One Park Place, Hatch Street, Dublin 2. Tel (01) 898 7910 Web www.avivabroker.ie Registered in England (3253947) at Wellington Row, York, YO90 1WR.

At Aviva, we’re committed to making our Savings, Investments and Pensions as clear and simple as possible.

That’s why we’re removing the monthly policy fee and some other charges for new and existing customers.

It’s just one way we’re proud to lead the market in simplifying our products.

Get the details: See www.avivabroker.ie or speak to your broker consultant

So long. Farewell.

Auf Wiedersehen.

Goodbye!So long. Farewell.

Auf Wiedersehen.

Goodbye!

IBA policy fee removal feb '17.indd 1 17/01/2017 15:41


donal milmo-pennyEditor

EditorialLonger days, Cheltenham, Six Nations rugby, coats off: it’s spring. And spring is business season. Make hay now and you’ll roll on through to a good summer and a good year.

Activity breeds activity. Activity leads to more business and success. Pick up the phone, talk to your clients and get out to see them. Drink more coffee, eat more lunch, go for a pint or to a match and talk. Pick up contact with old friends and acquaintances and talk. Talk – and get on point. It’s amazing how often I find myself not communicating well about what I do. When you meet new people they often ask “What do you do?”. Giving a glib response like “Oh, I’m in financial services”, or “Pensions, very boring stuff really” is a waste of time. I’m not suggesting you try to sell stuff to everyone you meet but why not leave them with a positive impression of what you do? Sound positive, project enthusiasm for your work, hint at success. Irish reticence and bashfulness is endearing, but moderate these instincts when it comes to your work.

Here’s a simple idea for you that’s worked a treat for me. Write a simple sales and marketing plan. Nothing fancy, just a page or two of what you are going to do to bring home the bacon. We did this last autumn. As well as focusing the mind, it also helped us prioritise. In a small office you only have so much time so this needs to be focused on the most worthwhile of activities. Your plan does not have to be a thing of beauty: it’s an internal document. We did ours over a coffee one Tuesday morning; it took two of us a half a day, most of it spent drinking coffee and talking through ideas. Talking strategy as opposed to talking directly about business can in itself be refreshing. If you have a business partner or someone in the business do it with them. If you are a sole practitioner then buddy up with another Broker you know, or a friend or acquaintance who is in business themselves who could provide some external perspective.

We started by writing up a list of ideas: and we threw the kitchen sink at it. This list contained myriad ideas, from on-site visits with clients’ businesses, to social media activity, to campaigns on kids’ savings, to family life insurance, to ideas around sponsorships and website development: nothing was ruled out, even the obviously bizarre. It genuinely doesn’t matter what’s on your list, just write it down. Next carve it up. Ask what

each idea will cost, how long it will take, how much it will make. Park the ‘nice idea, but’ stuff firmly at the bottom of the list, then park the stuff that sounds great and may or may not work out somewhere just above this. Next take the stuff you know you can achieve but you will make very little from and put that down. This probably makes your plan but as a low priority item: we made this a level 3. Next came level 2, which was stuff we knew we could achieve that was financially rewarding. Level 1 were items that were profitable, that we knew we could deliver on and perhaps could do so in volume, and that were packaged in a manner that differentiated our service from that of the next guy. Our level 1, 2 and 3 priorities made our plan, with level 1s being given priority for business development activity.

We did all this in the context of having a client proposition document that outlines what we do, what we believe, how we do it and what we charge. Having a client proposition is key these days: if you don’t have one, put one together. The Financial Broker project material on the PIBA website will assist you with this, and the life offices can also be supportive. If you have the budget, there are also a number of consultants who could assist. Whatever way you approach this, you will benefit from having proposition material to give to new clients. Don’t forget that when people look in from the outside they often don’t properly understand our business. Making things as clear as possible from the off helps to define the relationship and allay suspicions or doubts they may have in engaging you. It also helps keep the messers away: if they don’t like your proposition, then you probably don’t want them as a client.

For us, spending a little time on strategy has caused us to spend less time on low value activity and more time focusing on profitable business. A little strategy and a positive demeanour, I believe, can go a long way for any of us. Combining internal business planning with larger industry initiatives such as the Broker technology project, which will deliver considerable administrative efficiency to Brokers and insurers alike (these were outlined by Malcolm Craig of PwC at the Financial Broker conference lately), can deliver a bright future for any of our Brokerages. Summer here we come!

CONCEPT K – IMPRESSIVE PERFORMANCE SINCE LAUNCH Having only launched in Ireland in May 2016, Concept K hasn’t been on the Irish market for as long as some of the other Friends First funds. But it has certainly made an impression! Since its launch it has racked up returns of 10.07%, which is very strong compared to its peer group.

But Concept K is no “newbie”. Concept K is a multi-asset absolute return fund, focused on providing a return, not just beating a benchmark. It invests in a strategy called Concept Kaldemorgen which has been managed by Deutsche Asset Management since 2011 and has in excess of €5 billion in assets under management. In fact the team managing the fund have been managing money using the same risk aware approach used for Concept K since 2002.

It’s been seven years since Friends First launched Ireland’s first range of target risk portfolio funds in March 2010. Target risk funds make sense as they are much better at aligning what a customer wants and needs from their investment with what the fund manager is trying to do. It is no surprise that target risk funds now dominate retail investments.

Friends First approach is unique as not only are their portfolio funds multi-asset, but they are also multi-manager and multi-strategy. The benefits of this flexibility can be seen over the last year where the funds gave very strong risk adjusted returns despite a turbulent year in markets with significant shocks such as Brexit and Trumps presidential victory. The Magnet range has a preference for actively managed underlying funds and absolute return strategies in particular, whilst the Compass range has a bias towards efficiently run indexed funds.

FRIENDS FIRST ADD ‘MADRID’ TO IRISH COMMERCIAL PROPERTY FUNDThe Friends First Irish Commercial Property fund is one of the oldest in the market and has been investing in quality Irish properties since 1981. But, no – they haven’t gone all continental!

The fund, which was the top performer in its peer group in 2016, has recently added to its portfolio with the purchase of the ‘Madrid Portfolio’. This collection of 9 mixed use commercial buildings is in Dublin 2, close to Grafton Street, Ireland’s premier shopping destination. The fund also acquired 35 Henry Street during the quarter, a prime retail building on a long lease to mobile phone provider ‘3’.

Expertise Choice Performance Expertise Choice Performance Expertise Choice Performance Expertise Choice Perfor

Friends First is part of Achmea Friends First Life Assurance Company dac is regulated by the Central Bank of Ireland.

Friends First have built an investment platform which has choices for each of your clients individual pension and investment needs. Whether accessing a structured product via the Self Directed Investment Option (SDIO), investing in specialist property funds or leaving the risk management to the experts with one of a choice of target risk portfolio funds, Friends First offer expertise and choice.

PEDIGREE WITH PERFORMANCE

(Source: Financial Express, performance 5/5/2016 – 17/2/2017)

23.71%(ESMA 6)Magnet Adventurous

6.76%(ESMA 3)Magnet Cautious

(ESMA 4) 12.39%Magnet Stable

18.32%(ESMA 5)Magnet Portfolio

25.05%(ESMA 6)Compass Adventurous

6.58%(ESMA 3)Compass Cautious

(ESMA 4) 12.49%Compass Stable

19.78%(ESMA 5)Compass Portfolio

3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies









3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies









3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies

Warning: Past performance is not a reliable guide to future performance.

Warning: The value of your investment may go down as well as up.

Warning: Funds may be affected by changes in currency exchange rates.

Warning : If you invest in this product you may lose some or all of the money you invest.

THE ORIGINAL TARGET RISK FUNDS CONTINUE TO DELIVER

(Source: Financial Express, 12 month performance to 17th February)

For more information on the Friends First range of investment funds please contact your Account Manager or visit brokerfirst.ie

Spring 2017 5

diarmuid kellyChief Executive

PIBA

A level Playing FieldI often wonder why we, as an insurance industry, are not more outraged by the tax treatment of the valuable products that we supply to consumers. The latest incarnation of this is with the investment industry, where we have suffered under the 1% levy and now the exit tax has been decoupled from the DIRT regime, skewing the market in favour of non-insured products and bank based investment products.

In last year’s budget, Minister Noonan announced a cut in the DIRT rate on deposits from 41 per cent to 39 per cent, with a further two per cent to be cut annually to bring the rate to 33 per cent by 2020. Unfortunately however, no change was made to the exit tax on investment products, which is still levied at a rate of 41 per cent. It means that tax on investment funds is now the highest, with income on deposits facing tax of 39 per cent, and gains on individual shares liable to Capital Gains Tax at a rate of 33 per cent. Previously, DIRT rates and exit tax had been levied at the same rate since 2002.

Insurance based investments offer a number of benefits to ordinary consumers. They give diversification of investment portfolios on relatively small investments. They give higher expected returns for long-term investments. They give advice through Financial Brokers on suitability, aligning products with need.

Compare this with approximately €96 billion languishing on deposit in personal accounts with the banks yielding little or no return for these consumers. Based on the Minister and his Government’s policy to “encourage saving and improve the return to the small saver”, I would assume that the Minister and his Government don’t want to unfairly penalise people who are prudently saving for a home, their children’s education, a rainy day, or other life necessities.

Therefore, government policy should not be to punish people who are looking to get a better return on savings and investment when they choose to invest in alternative

investment products rather than the standard bank deposits. The reason behind this may be because the Government, as shareholder in the banks, would like to encourage consumers to invest in deposits rather than investing in equities and bonds and other asset classes with the various life companies.

Many in the insurance and Broker industry may see this as the banks having a more competitive advantage over the Financial Broker or life company. Brokers are essentially losing out as consumers may be persuaded to take out these non-insured and bank based investment products in order to avail of the more favourable tax treatment. This could be perceived by many in the industry as another attack on the Broker market.

We are not asking for favourable treatment against the banks, but is it too much to ask for a level playing field?

We feel that it is now time to recognise the improving fiscal circumstances, and the significant and growing contribution already made by the 41% exit tax levied on the same policies, by removing the discriminatory 1% temporary levy on life assurance premiums and applying the same internal tax treatment as non-insured and bank based investment. PIBA, in advance of last year’s budget, lobbied both the Minister for Finance and the Finance Committee but regretfully no action was taken to remedy the situation.

I suggest that all life companies should direct their PR and lobbying efforts to this priority for the year ahead. The Financial Broker community can also assist the life companies with their efforts by raising the issue directly with TDs and ministers they know: PIBA can supply relevant briefing papers for members to get more active.

We are six months away from this year’s Budget so I believe that the time for action is now. For any members that are willing to get involved in this effort, I’d appreciate them directly contacting me at [email protected].

CONCEPT K – IMPRESSIVE PERFORMANCE SINCE LAUNCH Having only launched in Ireland in May 2016, Concept K hasn’t been on the Irish market for as long as some of the other Friends First funds. But it has certainly made an impression! Since its launch it has racked up returns of 10.07%, which is very strong compared to its peer group.

But Concept K is no “newbie”. Concept K is a multi-asset absolute return fund, focused on providing a return, not just beating a benchmark. It invests in a strategy called Concept Kaldemorgen which has been managed by Deutsche Asset Management since 2011 and has in excess of €5 billion in assets under management. In fact the team managing the fund have been managing money using the same risk aware approach used for Concept K since 2002.

It’s been seven years since Friends First launched Ireland’s first range of target risk portfolio funds in March 2010. Target risk funds make sense as they are much better at aligning what a customer wants and needs from their investment with what the fund manager is trying to do. It is no surprise that target risk funds now dominate retail investments.

Friends First approach is unique as not only are their portfolio funds multi-asset, but they are also multi-manager and multi-strategy. The benefits of this flexibility can be seen over the last year where the funds gave very strong risk adjusted returns despite a turbulent year in markets with significant shocks such as Brexit and Trumps presidential victory. The Magnet range has a preference for actively managed underlying funds and absolute return strategies in particular, whilst the Compass range has a bias towards efficiently run indexed funds.

FRIENDS FIRST ADD ‘MADRID’ TO IRISH COMMERCIAL PROPERTY FUNDThe Friends First Irish Commercial Property fund is one of the oldest in the market and has been investing in quality Irish properties since 1981. But, no – they haven’t gone all continental!

The fund, which was the top performer in its peer group in 2016, has recently added to its portfolio with the purchase of the ‘Madrid Portfolio’. This collection of 9 mixed use commercial buildings is in Dublin 2, close to Grafton Street, Ireland’s premier shopping destination. The fund also acquired 35 Henry Street during the quarter, a prime retail building on a long lease to mobile phone provider ‘3’.

Expertise Choice Performance Expertise Choice Performance Expertise Choice Performance Expertise Choice Perfor

Friends First is part of Achmea Friends First Life Assurance Company dac is regulated by the Central Bank of Ireland.

Friends First have built an investment platform which has choices for each of your clients individual pension and investment needs. Whether accessing a structured product via the Self Directed Investment Option (SDIO), investing in specialist property funds or leaving the risk management to the experts with one of a choice of target risk portfolio funds, Friends First offer expertise and choice.

PEDIGREE WITH PERFORMANCE

(Source: Financial Express, performance 5/5/2016 – 17/2/2017)









3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies









3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies









3.50 Multi-Manager

1.00 INVESCO

10.07% Concept K

Irish Life

Standard Life

New Ireland

Aviva

Zurich

Friends First

-0.59

AIMS

-0.58 BNY Mellon

0.82

Global Stratagies

Warning: Past performance is not a reliable guide to future performance.

Warning: The value of your investment may go down as well as up.

Warning: Funds may be affected by changes in currency exchange rates.

Warning : If you invest in this product you may lose some or all of the money you invest.

THE ORIGINAL TARGET RISK FUNDS CONTINUE TO DELIVER

(Source: Financial Express, 12 month performance to 17th February)

For more information on the Friends First range of investment funds please contact your Account Manager or visit brokerfirst.ie


“Insurance based investments offer a number of benefits to ordinary consumers

”

6 Issue 56

The Financial BrokerThe Financial Broker

PIBA Meets …Dermot Gaskin, Brokerage Director, Irish LifePIBA: By way of background, could I ask you to take us on a whistle stop tour of your career to date, one that has led to your new position as Brokerage Director in Irish Life?

Dermot Gaskin: This could take a while! I joined Irish Life straight from school so I’m what’s known in the company as a ‘Lifer’. Virtually my entire career has been spent in one Broker facing role or another, from Pension Consultant through to Regional Manager during the 80s and 90s. Since 1997 I’ve worked in a range of leadership positions, culminating in the role of Head of Broker Sales in 2011. I was also the lead for Irish Life Brokerage on the merger processes with Progressive Life in 1999 and more recently with Canada Life in 2013. Having an in-depth understanding of the importance of Brokers was key to the success of both integrations.

I suppose you could say that after a 30-year apprenticeship I’ve worked my way up to the new role and I’m really looking forward to continuing to work with Financial Brokers to achieve better outcomes for all.

PIBA: You have been preceded by some notable people. During Tony Lawless’ tenure, the market experienced a period of considerable disruption and indeed Tony’s approach differed from his predecessor Willie Holmes. Should we expect a notable shift of strategy or direction under your tenure?

Dermot Gaskin: I’m passionate about our Broker business and I think my appointment underlines Irish Life’s commitment to the Broker market. My predecessors brought their own style to the role and I very much intend to do the same. I think that after some challenging times there is a very positive future ahead for Financial Brokers. In Irish Life we want to work with people with whom we share common goals, and I don’t think this will change going forward.

PIBA: Irish Life has long been a key provider for Financial Brokers in Ireland. With that in mind can I ask you about Irish Life’s vision for the Broker distribution channel moving forward?

Dermot Gaskin: Brokers are at the heart of Irish Life’s business and are still the dominant distribution channel. In terms of vision we firmly believe that Financial Brokers provide a vital professional service in protecting and improving people’s financial futures and that this is a service with real value built over a lifetime relationship with clients. We want to support Financial Brokers in delivering this service on a sustainable, scalable and repeatable basis, and we are investing heavily in our systems, our processes, and our people to bring a compelling proposition for the Broker market. We firmly believe that price erosion doesn’t serve anyone in the long term, least of all Brokers or their clients, as it devalues the professionalism of what we do as an industry.

PIBA: Can I ask you about your ‘preferred provider’ proposition, whereby you have looked to form closer relationships with certain firms?

Dermot Gaskin: Our preferred provider proposition (Onesource) is aimed at supporting those individuals or firms who believe they can best serve their customers by concentrating on one provider’s product range to meet their needs. This reduces their advice risk, streamlines their processes and allows them to dedicate more time to their customers. For advisers who view ‘independence’ as less important to their clients, this can be a better business model for them. At Irish Life we have always believed in providing services that advisers have asked us for and Onesource is actually a great example of this.

PIBA: Irish Life is by some distance the dominant force in the bank assurance market. Drawing on your unique position in Irish Life, can you perhaps ponder for a moment how Financial Brokers can best differentiate themselves from their local retail bank’s assurance proposition?

Dermot Gaskin: Our business is one that is centred on delivering tailored financial planning advice to clients throughout their lifetime. I think that Financial Brokers are best positioned by far to deliver that sort of proposition.

Dermot Gaskin (left) with Donal Milmo-Penny (Editor, The Financial Broker)

Spring 2017 7


This is because the majority of advisory firms are typically proprietary, with trust at the core of the offering. Financial Brokers are uniquely invested in their clients at a very privileged and personal level and grow with them as their needs evolve. We typically see that Brokers’ clients are a similar age to themselves so they bring real empathy to their clients on a lifelong professional basis. I think this is the Financial Broker’s USP. Bank relationships tend to be more transactional, more transient and less personalised.

PIBA: Irish Life has long been the largest player in the market and its business these days is prospering and profitable. Can you comment on how you see the market evolving in post recessionary Ireland?

Dermot Gaskin: I think that there are a number of unknowns going forward. Regulation and legislation will undoubtedly have an impact, with CPC, data protection, PRIIPS, pension simplification, automatic enrolment etc. All of these things add cost to our business and provide challenges, but they also provide some opportunities for us all. We’re advocating strongly with the authorities to influence the direction of regulation so that we and Financial Brokers are best positioned into the future. Whatever happens we know that Financial Brokers are resilient and will remain relevant in any scenario, as they have done many times in the past. I think technology too has had a massive impact over the past number of years. Clients are more educated and empowered than ever before. Information and experiences can be rated and shared in an instant, and all this can be consumed at any time in any place. I can only see this digital impact increasing going forward. Some of it will be disruptive, but similarly technology also enables Financial Brokers to deliver on their client proposition.

PIBA: Can you comment on whether you have any international learnings acquired through your parent Great-West Lifeco that the Broker on the ground could benefit from understanding?

Dermot Gaskin: It’s fantastic to have a committed, financially secure parent in our corner. Certainly we are benefiting from investment in our business. In a marketing sense we are leveraging this by seeking to grow the market for Financial Brokers through our MAPS and Protection campaigns, and the creation of Irish Life Health will be a massive addition to the business in the years ahead. These days there is a great buzz around Abbey Street, with 2,500 staff across the Group now on campus, and with our plaza refurbishment nearly complete we are making a positive statement of GWL’s intent and long-term commitment to the locality.

In terms of leadership, the appointment of David Harney, another ‘Lifer’, as Group CEO is a massive endorsement of how GWL views the capability of Irish Life’s people. In addition a number of senior executives (most notably Gerry Hassett) have moved to Canada to take up key positions in the businesses over there.

We had thought at the time of the merger, like you, that we would leverage insights, technology and products from the Canadian experience, but in reality the Canadian market is very different to ours in an environmental, regulatory and commercial sense. GWL are actually looking to us for learnings as they see the Irish market as being ahead of Canada in many respects. For example they currently face the issue of disclosure for the first time and are seeking our input, as typically advisers in Canada take 1% or higher as ongoing fees for their services. In the technology space they are really happy to invest in and ‘greenhouse’ digital projects in Ireland to further develop the growing advice led environment here.

In terms of product, they have taken our ‘Dynamic Share to Cash’ (DSC) model from our MAPS funds and overlaid it on a number of their funds, as they see it as a great innovation and a real value add.

PIBA: Finally Dermot, I’ll leave this one to you and ask simply if you have any thoughts or ideas you would like to share with our members?

Dermot Gaskin: I think it is becoming pretty clear that there will be a regulatory focus on the justification of future trail / advice fees in the short term. Financial Brokers can and should position themselves to take full advantage of the opportunities that will present themselves rather than the perceived threats of that scenario occurring. I believe that we need to work together to ensure that we support and enable the advice process so that we can all grow while giving the best possible experience to the client.

On a final note I just want to thank all Financial Brokers for the support we’ve received in the past and to say that we will continue to work hard to win that support in the future.

PIBA: Dermot, thanks again for taking the time to meet us today, and I wish you all the best in your new role.

Dermot Gaskin (left) with Donal Milmo-Penny (Editor, The Financial Broker)


8 Issue 56

Spring CleaningI moved house last year and one of the rooms became a junk room, where anything that did not have a place was left to be sorted out at a future point in time. That point in time finally arrived last weekend. I put on some good music and set to work. I pulled most of the items out onto the landing and only put back into the spare room the things that belonged there. Everything else was given a new home, either in my house, my sister’s house or the bin! I felt a huge sense of achievement and delighted in moving freely about my spare room, able to find things again!

Your database is a bit like my spare room. Over the years you’ve added data and information about your clients and perhaps not removed the old information. You may have created a second record for an existing client because some of the sales data did not quite match. We have worked on many financial advisers’ databases over the years and have compiled a list of the top five things to do to clean up your database.

1. Get all of the data in one place

You may have some data sitting on an old legacy system and more data on the provider websites. Ideally, you need all of this data in one place so that you can see what’s going on for that client. Download reports from the providers, run an extract from your CRM or legacy system and begin to pull these separate files together into one master sheet on Excel. You may not need all of the columns of data each provider includes on their report, so look for the common columns across each report and work with these.

2. Run a completeness report

Once you have the data in one place, use the filters in Excel to count up how many rows of data have information in them and how many are blank. In addition, you’ll need to look at the data to make sure it’s sensible and not junk. Create a report on how complete the data is and consider how you can clean the gaps up. (Looking at your email inbox is a great place to start gathering missing email addresses and telephone numbers!)

3. Remove the duplicates

Duplicate records are the Achilles’ heel of many databases – we think we have more clients than we actually do and we can also underestimate a client’s business with us if it is split across two records.

Excel and YouTube are a phenomenal combination – once you know what you’d like to do in Excel, search for it in YouTube and there is bound to be a tutorial to explain how to do it. The first thing you might want to do is use the ‘concatenate’ formula to join the client’s name and address. Then you want to run a ‘remove duplicate’ routine to take out the exact matches.

To become more advanced at removing the duplicates, you’ll have to apply fuzz matches that will identify close (not only exact) matches. This overcomes spelling errors, typos and so on.

4. Link up couples, families and business partners

With the duplicates cleaned up, the next task is to link the couples as one entity. They may have joint and single policies, but in the client database it is important to see them as one buying unit. You know your client base better than anyone, so make a decision on whether family members should be linked or kept separate on your database. It’s a similar situation with business partners – they may have both business and personal policies with you and you don’t want to over link them!

5. Update the database

Finally, we have seen many situations where the advisers know more about their clients than the database would lead you to believe. Information gets stuck in emails, fact finds, diaries, and meeting notes, and never gets transferred to the database or CRM system. Take some time to update the database as it is a very valuable asset for the company. A clean and accurate database can dramatically enhance sales opportunities, client services and business growth.

Ultimately, your database spring clean is about quality, not quantity – it’s better to know that you have 1,000 unique customers than to think that you’re operating with 2,000 including the duplicates, dormant, and inactive clients.

Just as I can move more easily around my spare room, with a cleaner database it will be much easier to find the warmer sales leads, the clients in need of retention and the cross sales opportunities. Go on, pop on your earphones and get cleaning!

tara grehanManaging Director

Datalytics

“A clean and accurate database can dramatically enhance sales opportunities

”


Spring 2017 9

Innovation – from Driverless Cars to Client ManagementThe pace of innovation has never been higher. Our lives have changed rapidly in a short period of time. Twenty years ago, only 4.1% of the Irish population had Internet access. It is hard to imagine a life today without it. Twenty years ago, Facebook did not exist: it was released as recently as 2004 and only a decade ago it was still a relatively niche innovation with only twenty million users. Today it has over two billion users. The iPhone was released in 2007, the first of the smartphones and an immediate game changer in how we bank, how we shop and how we live. If we look to the future, how will our lives change in the coming decade and what innovations will support that?

The next wave of changes will be supported by innovation in the ‘Internet of Things’ and linked to that will be driverless cars, allowing greater use of the sharing economy. Again, these will impact our livelihoods and the way we live our lives, from how we shop to how we commute. The fantastic technology that drives these innovations is underpinned by data: data that transfers seamlessly from one system to another, from the vendor to the consumer, from the software house to the retailer. Consistency in the presentation of this data and the understanding of it by all parties is key. Without this, the systems and the related innovations will fail.

In 2016, PIBA commissioned a report from PwC regarding enablers to improved operational efficiency for the Financial Broker. The issue of poor data quality was highlighted as one of the core underlying issues experienced by all stakeholders. This led to PIBA engaging PwC to assist with the agreement of a consistent dataset, with clearly defined data points, for use across the industry. As we reviewed the linkage of data from the life companies through the value chain to the CRM companies, the Broker and ultimately on to the customer, the same point was repeatedly referenced. Ambiguous, incomplete and varied datasets are causing confusion and thereby limiting Brokers’ ambitions to provide a quality service to their customers. The root cause of this position has been the piecemeal and varied requests that have come from a variety of CRM providers over the years that created inconsistent datasets.

To achieve the agreement of a common dataset, there were a number of steps involved. Firstly, PwC engaged with all of the life companies to gain copies of the datasets currently being provided to the CRM companies. Upon review of these, it was noted that they varied in completeness, clarity and timing. The combined datasets were then compiled into one summary document. Then through engagement with all stakeholders, the dataset was slowly refined down to a core set of well-defined data that answered the needs of the Broker community and would provide a solid base for CRM providers to develop the functionality of their applications.

The dataset has been circulated to each of the life companies. It has been conservative in its nature, with a focus on creating a consistent baseline rather than developing new

data points. This should help adoption as the life companies who need to produce this data should only need to extract existing data and not create new data. The response across the board has been positive from the life companies, with many welcoming the consistency. It will reduce their operational overhead as they will no longer have to create bespoke datasets for a variety of CRMs all requesting similar but differing datasets. Also, improved data quality will filter down the value chain, giving greater clarity to Brokers and their customers and thereby reducing inbound queries to the life companies and improving operational effectiveness.

The greatest risk to this project is that of non-implemen-tation. The benefits can really only come to fruition if the life companies embrace the opportunity to support their Broker channel by developing and distributing the revised dataset. This piece does not have the glamour and groundbreaking innovation of the driverless car in the sharing economy, but it does rely on the same core foundation: consistent, well under-stood data.

malcolm craigInsurance and Fintech Advisory Leader

PwC

“Poor data quality was highlighted as one of the core underlying issues experienced by all stakeholders

”


10 Issue 56

eugene hayesDirector

Midwest Corporate Services Limited

Overview of new Regulations on Beneficial OwnershipBackground

The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the Regulations) were enacted on the 15th of November 2016 to implement certain provisions of the Fourth Anti-Money Laundering Directive EU/2015/849 (the 4AML Directive) relating to obtaining and maintaining beneficial ownership information on clients/customers.

The 4AML Directive is due to be transposed into Irish law on the 26th of June 2017. However the Regulations have transposed the requirements of Article 30(1) (relating to beneficial ownership information requirements) in advance.

The Regulations have immediate effect from the 15th of November 2016. They are not to be confused with existing money laundering legislation in that they require you as a Broker operating as a limited liability company to maintain a register showing the beneficial owners of your company.

Centralised Register

The 4AML Directive, on implementation, will require that beneficial owner information is held in a centralised register, and the Regulations were enacted early to allow the relevant data to be collated. It is a big step towards transparency in identifying the ultimate owners of these companies: who they are and where they are from, and indeed if they are on any sanctions list or are politically exposed persons.

It is not yet clear what form the centralised register will take, and whether it will be publicly accessible or whether access will be restricted to appropriate parties such as entities carrying out customer due diligence, EU regulators, financial intelligence units, and others that can demonstrate a legitimate interest. An Irish centralised register is not expected to be in place before Q3 2017. In the UK, where the legislation was enacted in June 2016, the register is free and accessible to all as open data.

Application

The Regulations apply to any Irish corporate entities and accordingly impact members who are incorporated. It will not affect members who are partnerships or sole traders.

Requirements

With effect from the 15th of November 2016, relevant entities are required to maintain a register of their beneficial owners (the Beneficial Ownership Register), also known as PSC (People with Significant Control).

Beneficial owners are natural persons who ultimately own or control a legal entity through a shareholding/ownership interest of more than 25%. This can be through a direct holding by the natural person or indirectly through a corporate entity or entities under their control.

Details to be obtained and placed on the beneficial ownership register include each beneficial owner’s

(i) name (ii) date of birth (iii) nationality (iv) residential address, and (v) the nature and extent of the interest held.

The information must be kept up to date.If a Broker has reasonable cause to believe a natural person

is a beneficial owner, it must serve a notice requiring that individual to state whether or not that is the case and, if so, to confirm or correct any particulars that are included in the notice and supply any that are missing.

Notices must also be served on existing beneficial owners where the relevant entity has reasonable cause to believe that particulars in the beneficial ownership register have changed, and on any person (natural or legal) that the relevant entity has reasonable cause to believe is aware of the identity of any individual who is a beneficial owner of the relevant entity.

Beneficial owners have a parallel obligation to notify relevant entities of their beneficial ownership status and relevant particulars where the beneficial ownership register is incomplete or inaccurate for more than one month and no notice is received from the relevant entity.

Where, having exhausted all possible means and provided there are no grounds for suspicion by the relevant entity, no beneficial owner is identified, the Regulations require that the ‘senior managing officials’ of the relevant entity be entered on the beneficial ownership register (e.g. the board of directors).

What to do next

In order to comply with the Regulations, relevant entities need to undertake the following:

• Put in place a beneficial ownership register and arrange for this to be maintained.

• Where there is a shareholder/investor holding more than 25% of shares, the required information will need to be obtained for inclusion on the beneficial ownership register (unless such shareholder/investor is a public company). Relevant notices may need to be issued.

• If there is no beneficial owner (including if the relevant shareholder/investor is a public company and there is therefore no beneficial owner), the board will need to be identified in the beneficial ownership register.

• Going forward, the position as determined will need to be monitored for changes.

“Relevant entities are required to maintain a register of their beneficial owners

”

Spring 2017 11

How going back to Basics can build SuccessWe truly have lived through a most extraordinary decade. I think this holds true in particular for those of us working in the financial services industry. It is hard to believe that the Celtic Tiger drew his final breaths ten years ago and that by early the following year, 2008, Ireland had fallen into a severe recession followed by an economic depression by 2009. As we are all only too aware, this was compounded by the Irish financial crisis during the same period.

However, by late 2014 green shoots were beginning to once again emerge. Although this has been a slow rebuilding process over the past number of years, Ireland is now displaying the internal signs of a strong and robust economy. Unfortunately, there are a number of external factors and economic developments outside of our control, naming Brexit and Donald Trump as just two examples, which may have a dramatic impact on this recovery. But we remain optimistic that precautions have been taken and that we can continue to grow and strengthen.

So how does a medium sized life assurance company weather this type of tumultuous storm to grow by 25% in 2016 in a flat market? What enabled us to overcome these challenges and once again prosper?

We went back to basics. We put a strategic roadmap in place to enable us to focus on the core areas that would make a difference and then we followed it. The map was straightforward but implementation was not always easy. Reverting to basic principles, we ensured that we built the right platform to meet current demands and to position us for future growth. We invested in and are continuing to invest in our products; and in promoting them, our people, and our processes to ensure that we would not only recover but prosper.

We have experienced solid growth in demand across our product range over the past year and this has been reflected in the increased market share (year on year) at the end of 2016 across all product lines. We have been the leading provider of income protection for many years through our strong claims record, promotion and strategy. Our broad investment platform, including our market leading portfolio fund range, allows us to present a very strong offering to Financial Brokers and their clients.

Our increased focus on, and promotion of not just our brand but our key product offerings through traditional media, TV, radio and print, has resonated with our distributors and customers alike. We have also embraced the digital arm of our marketing strategy with our new website, our approach to analytics and our increasing presence across social media channels.

It has also been extremely important to ensure that we have the right people in Friends First to support our efforts. Over the past two years, Friends First has recruited upwards of 30 staff across all areas of the business and at all levels within

the business to expand our already highly experienced and professional staff. This expansion is set to continue in 2017, with over fifteen roles currently planned, and is being driven by business needs.

In addition to our standard operating costs, we are also making a considerable investment, in excess of €3 million, in our business. This investment covers work on our Head Office to bring it up to today’s standards in terms of employee facilities, work environment, and energy efficiencies. It also includes the infrastructure and upgrade to our technology systems and web platforms, making it easier for our customers and distributors to do business with us. This makes us more productive, allowing our staff to focus on more value add services. Our customers and distributors have also been pivotal to our success and through research and consultation we have bridged some of our knowledge gaps and adapted our services to meet their needs better.

It was this combination of factors that drove our stellar performance in 2016 and that presented an overall proposition that resonated, and continues to do so in 2017. In a competitive market, depending on the one big silver bullet is dangerous as it is easily replicated. Hard work on a number of fronts, while it clearly can be copied, is not as easy to implement and, more importantly, to get right.

jp hughesChief Commercial Officer

Friends First


“Depending on the one big silver bullet is dangerous as it is easily replicated

”


12 Issue 56

ger tyrrellTechnical Services

Zurich

Qualifying for the State PensionAt Zurich, we came across an interesting insight recently. We discovered that one of the most common things that people search for on Google is information relating to the State pension. Questions such as who qualifies for the State contributory pension and what PRSI contributions must be made in order to meet the requirements are common. However, what was most concerning was a lack of information from pension providers on this same topic!

In order to qualify for the State contributory pension, an individual must have made a certain minimum number of weekly PRSI contributions.

The main sectors of employment that can potentially qualify for the contributory pension are:

• private sector employees (PRSI Class A),• public service employees recruited after the 6th of April 1995

(also PRSI Class A), and• self-employed sole traders, partners, and proprietary directors

(PRSI Class S).

Those who pay PRSI under Classes E, F, G, H, and N are also eligible.

Workers that don’t qualify for the State contributory pension are generally public service employees recruited before the 6th of April 1995 (PRSI Classes B, C and D). However, it is important to note that individuals who have spent part of their working life in the public service and part in the private sector paying social insurance contributions are deemed to have a ‘mixed insurance record’ and may still qualify for the contributory pension on a pro rata basis.

For individuals who have worked in Ireland and one or more other EU States, the social insurance contributions paid in these EU States can be added to your Irish social insurance contributions in order to qualify for the contributory pension.

Ireland also has bilateral social insurance agreements in place with Canada, the US, Australia, New Zealand, Japan and the Republic of Korea. These agreements generally

provide that social insurance contributions paid in Ireland and in the other country can be combined to help people qualify for the State pension. In general, the method of calculation is similar to the EU rules.

Due to the complexities involved, individuals who hope to qualify for the State pension on the basis of ‘mixed insurance records’ or social insurance contributions paid in other States should contact the Department of Social Protection to determine their entitlement to this pension.

Time to benefit

In order to qualify for some level of benefit, an individual must have started paying PRSI before the age of 56. They must also have paid at least 520 weekly contributions, of which no more than 260 of the 520 may be voluntary contributions (a lower limit for voluntary contributions applies if a person commenced making voluntary contributions before the 6th of April 1997).

In addition, an individual must satisfy the average yearly contribution limit, which can be satisfied where they have paid a yearly average of at least 48 paid credited or full-rate contributions from 1979 to the end of the tax year before they reach age 66; or they have paid a yearly average of 10 or more credited or full-rate weekly contributions from 1953 (or the time they started insurable employment, if later) to the end of the tax year before they reach age 66. For the purpose of calculation the average contribution for a full year is 52 weeks.

The State contributory pension is payable from a retirement age as determined by the Department of Social Protection. This retirement age has been increased in recent years and could yet be subject to further increases in the future. Currently, for those born in the years prior to and including 1954, the benefit is payable from the date of a person’s 66th birthday. For those born between 1955 and 1960, the benefit is not payable until you reach age 67, and for all those born in 1961 and thereafter, the benefit is not payable until your 68th birthday.

If you ever have any questions in relation to any aspects of pensions, just speak to the Zurich Technical Services Team on 01-209 2020 or email [email protected]. Alternatively, you can contact us through LinkedIn – just search for Zurich Life (Ireland) Technical Services.

Zurich Life Assurance plc is regulated by the Central Bank of Ireland. The information contained herein is based on Zurich Life’s understanding of current Revenue practice as at January 2017 and may change in the future.

Source: Zurich Life/CSO, February 2017.

“An individual must have made a certain minimum number of weekly PRSI contributions

”

Spring 2017 13

Establishing Trust in BrokersOne of the standout findings from recent research conducted by Ipsos MRBI for PIBA is that only 34% of respondents agree that Brokers are trustworthy. Those who have used a Broker previously trust them slightly more than those who have not, but still only two in every five people who have previously used a Broker agree that they are trustworthy.

Are these startling findings? Probably not. Trust in the financial industry has been badly shaken by the economic crisis, and by a variety of scandals that have occurred in the sector. Daily reporting of court procedures, negative equity and pension shortfalls are ongoing reminders of darker days within the financial sector. Rarely do we hear anything positive about the financial industry, and our interactions with financial professionals often relate to things we would rather not have to deal with.

The financial sector is not unique in this respect. Many other industries and professions suffer similarly negative perceptions of trust, and the 2017 Ipsos MRBI Trust in the Professions Survey shows that, for example, 42% trust journalists to tell the truth and that only 21% trust politicians to tell the truth.

Maybe we don’t trust anyone any more: only three out of five people trust the ordinary man or woman in the street to tell the truth.

Why should we be worried about low levels of trust? Back in the year 2000, David Maister wrote in The Trusted Advisor that the most important key to professional success is the ability to earn the trust and confidence of clients.

Failing to retain trust then is seriously detrimental to future business success. Lost trust creates space for others to step into our place and start to establish relationships that disrupt our business and world view: witness the lost trust in political systems in the United States and Britain, and the space that this created for the election of President Trump as well as the factors leading to Brexit.

At Ipsos we work with a variety of global brands to help them understand their corporate reputation. They recognise that having a strong reputation helps an organisation to perform more effectively in the present and builds a reservoir of goodwill to draw upon in future crises. To measure reputation, we often use a combination of five metrics: awareness, familiarity, favourability, trust and advocacy. Simply put, a company must be known to be liked; must be liked to be trusted; and must be trusted before a person is willing to recommend it to others: central to operating successfully as a financial advisor.

So how do we re-establish trust with our clients and potential clients?

Trust needs to be built on the initial building blocks of awareness, familiarity and favourability. Without establishing these we simply cannot establish trust. Converting favourability into trust is very significant because this is when one starts to affect people’s behaviour. Where favourability is

emotional, trust is cognitive: favourability is simply a reaction to a positive experience, but trust leads to an expectation of further positive experiences.

David Maister simplifies trust into a simple equation with four variables. The first three – credibility (the words that we say), reliability (the things that we do), and intimacy (the safety and security that people feel when dealing with us) – enhance our ability to perform as a trusted advisor. The fourth – self-orientation (focusing on ourselves rather than our client) – diminishes it. Measuring every engagement we have with a client or potential client against these variables provides a strong understanding of how well we perform at building and maintaining trust.

Trust is the pivot through which reputation really swings. When their trust has been gained, people will engage with us more and will usually be more forgiving of negative experiences. The key challenge for all of us is that trust is lost more easily than it is gained.

kieran o’learyDirector

Ipsos MRBI


“Trust is the pivot through which reputation really swings

”


14 Issue 56

MyFolio – The Difference is in the DetailOver the last number of years, multi asset funds have been one of the fastest growing areas for investors in both Ireland and the UK. These funds have effectively replaced traditional managed and balanced funds, which have fallen out of favour with investors and advisers. So how best to choose from the growing range of funds available?

The difficulty in making comparisons

Unlike traditional managed funds, it’s difficult to do a like for like comparison when it comes to risk targeted funds, because each fund has its own set of risk and return parameters and objectives. On the other hand, managed funds that are managed to a consistent benchmark, such as a sector average, can easily be compared to funds in the same sector. One of the flaws of traditional managed funds was that outperforming the sector average can sometimes lead to taking on higher risks than investors had originally expected. With risk targeted multi asset funds, the risk parameters are clearly defined, meaning that risk targeted multi asset funds can address consumer needs more effectively than managed funds, particularly when it comes to investment volatility.

It may be easy but it is certainly not correct to compare two multi asset funds from two different companies just because they both have the same number, such as comparing Company A Multi Asset Fund 3 with Company B Multi Asset Fund 3. Most likely the two funds will be managed within different volatility range bands and different return targets. It’s important that each risk targeted fund or family of funds is analysed in its own right before making any relevant comparisons with competitor funds, as is the case when analysing and contrasting absolute return funds.

One of the first and most successful risk targeted range of funds is MyFolio, where Standard Life currently manage over

€15 billion of assets. The Irish MyFolio range, launched in 2012, now have assets exceeding €1billion.

So what makes MyFolio different?

• choice of investment styleAt Standard Life, we offer investors two suites of MyFolio Funds – five MyFolio Active funds and five MyFolio Market funds. The key difference is their investment style.

– The underlying funds of the MyFolio Active range are actively managed by Standard Life Investments and they invest across all major asset classes including absolute returns.

– The underlying funds of the MyFolio Market range are predominantly passively managed by Vanguard, a world leader in passive investment management.

• robust investment processGiven the critical importance of asset allocation when it comes to investment return, the investment process for MyFolio places significant resource in this area, and specifically in relation to strategic asset allocation. Each MyFolio fund targets the highest total return achievable for your chosen level of risk.

Reassurance and predictability

Each of the MyFolio Funds are managed to a volatility risk band. This ensures that over the longer term, the performance behavior of each fund will be consistent with their respective risk/reward characteristics. (This is demonstrated by the past performance of each MyFolio Fund). The table here shows the risk bands of the MyFolio Active and Market Funds. Due to the absolute return holdings of the Active Funds, they are managed to a lower risk range than the Market Funds.

brendan barrHead of Investment Solutions

Standard Life

Spring 2017 15

• linear risk and rewardUltimately the success of risk targeted investment is dependent on the long-term performance, the risk characteristics, and critically the relative risk/reward of each fund. Since MyFolio Funds were launched, they have behaved in exactly the way we expected – with the higher risk funds outperforming each respective lower risk fund over the longer term – this line chart illustrates this clearly. This sends a very strong and clear message to investors: the greater the risk, the greater the return, which is what risk targeted investing is all about.

Find out more

For more on MyFolio funds go to www.brokerzone.ie/myfolio.

Past performance is not a reliable guide to future performance. The value of this investment may go down as well as up and may also be affected by changes in currency exchange rates. The period of performance shown does not reflect the long-term nature of investments.

Standard Life Assurance Limited is authorised by the Prudential Regulation Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. Standard Life Assurance Limited is registered in Dublin, Ireland (905495) at 90 St Stephen’s Green, Dublin 2 and Edinburgh, Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH.©2017 Standard Life, images reproduced under licence.


Source: Longboat Analytics. Performance from 12 June 2012 to 1 January 2017. Net of annual management charge.

Source: Standard Life Investments January 2017


16 Issue 56

elizabeth smith wrightCompliance Manager

PIBA

Information Technology and Cybersecurity RisksThe Central Bank published its Cross Industry Guidance in respect of Information Technology and Cybersecurity Risks in September 2016. At a recent breakfast seminar in relation to this area, one of the key messages was that you must assume that your firm is a target, and that just because nothing is happening visibly, it doesn’t mean that a breach is not being attempted or happening. The security and resilience of IT systems, their governance, and their management must improve to reflect this reality.

It is clear that some members have already been targeted by a recent encashment email scam. A number of members were contacted from a client’s correct email address requesting that an encashment be made, and requesting that funds be transferred to a particular account. Copies of ID and bank statements were also received in order to make the encashment. It transpired that these were fraudulent attempts and the clients had no knowledge of the encashment request.

In order to assist members to understand their responsibilities and achieve compliance in this area, PIBA in association with Saros has published a Financial Broker Guide to Information Technology and Cybersecurity Risk and relevant template documents, which are available on the PIBA website. The Central Bank has indicated that this area will be a focus for on-site inspections in the future, so the purpose of this guide is to inform all members of the requirements in this area.

PIBA recognises that the issues and requirements raised by the Central Bank for members will vary in accordance with the business model, size, and technological complexity of each member firm, and the sensitivity of its information and data. Consequently, for smaller firms, i.e. sole traders and one or two person firms, some of the more specific aspects of the following sections may not be directly applicable.

The important thing is that, firstly, all members regardless of the size of the firm need to identify and appoint a person within the firm who is responsible for IT. This person should be sufficiently senior and report to the Board. If the firm is a sole trader, the person responsible will be the sole trader.

The next important stage in any IT compliance project is an assessment of the current IT position. For smaller firms or where it is felt that there is nobody within the firm with the required expertise to undertake this assessment, it would be recommended to enlist the services of a third-party provider. It is important that the firm should undertake due diligence when selecting a third-party provider, i.e. assess a range of suitable providers, compare pricing, establish what service level agreements (SLAs) are available, and seek references from similar firms who have worked with the provider before.

Following the assessment phase a gap analysis should take place, i.e. identify what shortfalls exist, and remediation,

i.e. action to be undertaken and new systems/measures to be put in place to reach the required compliance standard.

Remediation generally impacts:

• IT infrastructure, i.e. all physical hardware, machines, office equipment, models/versions, renewal dates, security (anti-virus), firewalls, disaster recovery, and business contingencies.

• Applications that reside on internal or external IT infrastructure.

• Governance, e.g. the Standard Operating Procedures within the firm that govern IT.

• IT strategy: if there is an established strategy or action plan in place.

When a status of compliance has been achieved, it is incumbent upon an organisation to maintain that level of compliance. This covers the monitoring and auditing of the IT environment. Examples of adherence activities include, but are not limited to, audits, change management surveys, and reviews of standards and policies.

PIBA would recommend that all members read the guidance and take the time to put the necessary procedures and systems in place. In order to assist members further, we have agreed an arrangement for PIBA members with an IT provider, Diacom. Diacom can provide IT infrastructure and support as outlined in our Financial Broker Guide at a reduced rate for PIBA members. Details of the services Diacom can provide for your Brokerage are also available on the PIBA website.

“All members need to identify and appoint a person within the firm who is responsible for IT

”

Spring 2017 17

andy ivory corrHead of Investment Sales

New Ireland Assurance

Investing in Uncertain TimesA normal end, an interesting journey

For anyone who has been living on a desert island for the last twelve months, a quick glance at the returns of global equities last year (11.1%*) would possibly suggest that, in terms of long-term trends, 2016 was a normal year for stock markets. The final outcome may well have been normal, but the journey to get there was anything but.

When you consider the key events that 2016 will be remembered for – the price of oil capitulating and rising again, Brexit, the election of Donald Trump – it truly was an interesting journey. Dig deeper and we find that since the lows of the 11th of February 2016 when investors worried about banks’ solvency, falling energy and commodities prices, the effects of the strong dollar, capital flight from China and the trajectory of US interest rates, global equities actually rose by 27.5%.*

That’s what was: what lies ahead for 2017?

While Donald Trump’s presidency is not the only factor that could affect investments in 2017, it is potentially a major one. President Trump’s plans to boost employment, rebuild infrastructure and bring businesses back to the US could have significant repercussions, both positive and negative, for global trade and growth.

His policies have already had an effect. Inflation expectations and stock markets have risen while bond prices have fallen.

But there are risks. What if Trump cannot pass his policies through Congress? And even if he does, is there any guarantee that they will have the growth-boosting effect that many are now predicting? There remains the issue of debt too, with both government and consumer borrowing still historically high in many Western nations. This may slow the pace at which rates may rise and inhibit economic growth.

Let’s not forget the various issues facing Europe this year. Elections will be held in some of the largest EU Member States and could see a continuation of the populist theme (France, Germany, the Netherlands). Italy continues to face a number of issues, none more so than the woes of its banking system; and there is always Greece.

But what does this all mean for retail investors?

The path ahead will be uncertain and unpredictable. Traditional investing, if we can use that term, assumes that investors can withstand the ups and downs of markets because the end justifies the means. But the global financial crisis of 2007/08 challenged that presumption. For many of today’s individual investors, the journey is just as important as the end result. At New Ireland we believe that a smoother investment journey is essential to investors achieving their goals. A smoother journey will help investors remain invested for longer and ultimately earn the type of returns they had hoped for. Being able to manage the ups and downs of the journey – through managing currency risk, tackling bond duration head on, making use of

derivatives in a non-complicated way etc. – have become key requirements for satisfying that goal.

Risk managed solutions

Since 2010, we place risk management at the heart of our investment and pension offerings. We look to mitigate risk, so investors have the confidence to remain invested and benefit from the long-term returns.

Managing money the way customers want

iFunds customers enjoyed solid risk adjusted returns in 2016 and superior risk management through what was a complex year. The level of risk across financial markets generally has undoubtedly risen. In a low growth unpredictable world, fund managers require greater levels of sophistication to generate returns for investors going forward. This could be through the use of derivatives to protect against losses, active stock selection to avoid overpriced markets, or the ability to navigate a complex bond market. Our iFunds range has access to fund managers with a proven track record in all these areas!

In an environment of uncertainty we believe risk managed funds are paramount to providing your clients with solutions for their truly long-term goals.

To find out more about iFunds and our other risk managed funds, please talk to your New Ireland Broker Consultant.

* Source: New Ireland. Performance of global equities is represented by the performance of the New Ireland World Index Fund (Unhedged) from 1 January 2016 and 11 February 2016 to 1 January 2017 respectively, and is quoted gross of tax and charges.

warning: The value of your investment may go down as well as up.warning: These funds may be affected by changes in currency exchange rates.warning: If you invest in these funds you may lose some or all of the money you invest.warning: Past performance is not a reliable guide to future performance.

Terms and conditions apply. The content of this article is for information purposes only. All opinions and estimates constitute best judgement at the time of publication and are subject to change without notice. Please note that mention of specific stocks/shares or investments is not a recommendation to trade in those stocks/shares or investments. The views and opinions expressed are those of the author and are not necessarily the views and opinions of New Ireland.

New Ireland Assurance Company plc is regulated by the Central Bank of Ireland. Member of Bank of Ireland Group. The Company may hold units in the fund mentioned on its own account.


“A smoother investment journey is essential to investors achieving their goals

”


18 Issue 56

Financial Broker Conference 2017Citywest Hotel, Thursday the 23rd of February

Michael McMahon (M. McMahon & Co.), Pat Mackin (Bridge Financial Services) Anthony Jones (AMJ Financial)

Irish Life exhibitor standDavid O’Connor, Denis Kelleher (New Ireland) John Henderson (Lifespan Financial Services Ltd)

Daniel Hardiman (Hardiman Life & Pensions) Gerry Guiney (Plan B Life)

Kieran O’Leary (Ipsos MRBI) addresses the crowd

Ciaran Blackall (Blackall Financial) David Crowley (Independent Financial Consultants) Seán Gallagher (Guest Speaker) Mark Gallagher, David Walsh (Smart Financial)

authorJob Title

Company


Spring 2017 19

Zurich exhibitor stand

Aviva exhibitor stand New Ireland exhibitor stand Royal London exhibitor stand

Friends First exhibitor standJohn Murray (Park Worth Financial Ltd), Luke Hedderman, Maurice Hedderman Mark Hedderman (Hedderman Financial Solutions Ltd)

Philip Brennan (PM Brennan Financial Brokers Ltd) Róisín Clarke (PIBA Chairman) Liam O’Sullivan (O’Sullivan Tierney Financial Management Ltd) Standard Life exhibitor stand

Diarmuid Kelly (PIBA Chief Executive), Seán Gallagher (Guest Speaker) Anthony Jones (AMJ Financial)

Financial Broker Conference 2017

Page 1

Considerations in Evaluating Investment Platforms - A Guide for Financial BrokersA Guide to Developing Business Strategy for Financial Brokers

Page 01

Financial Broker

Creating your success through Financial Planning

Financial Planning & Guidance

Considerations in Evaluating Investment Platforms


One - Unified Voice

A guide for Financial Brokers

Financial Broker

Creating Your Success Through Financial Planning

Page 1

A Guide to Group Pensions and Group Risk Benefits for Financial Brokers




One – Unified Voice

A Guide for Financial Brokers

Financial Broker Guides

www.financialbroker.ie


Financial Broker


Page 1

A Guide to Accountancy and Tax Issues for Financial Brokers






Page 1

A Guide to Developing Business Strategy for Financial Brokers

Page 01

Financial Broker



AddressingInvestment Risk


One - Unified Voice


OUVFinancial Planning & Guidance

A guide to thefinancial securityof life companies

One - Unified Voice



A guide to writing a Customer Value Proposition




Page 1


Page 01

Financial Broker





One - Unified Voice



Page 01

Financial Broker



OUVA Guide to Developing Business Strategy for Financial Brokers


One - Unified Voice

Financial Broker


Page 1

A Guide to Digital Marketing and Social Media Planning





Connecting online and offline sales and marketing plans to deliver incremental and sustainable growth and profit


Page 01

Financial Broker



OUVA Guide to Eliminating Provider Bias for Financial Brokers


One - Unified Voice

Page 1


Page 01

Financial Broker



Investment Recommendations and Reviews





Page 01

Financial Broker



A Guide to Financial Planning Recommendations and Statements of Suitability


One - Unified Voice

A Guide to Marketing your Business for Financial BrokersFinancial Broker


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A Guide to Marketing your Business for Financial Brokers



How to develop and deliver a structured and creative marketing plan to boost the income levels of your business

A Guide to Legal Issues for Financial BrokersFinancial Broker


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A Guide to Legal Issues for Financial Brokers




Page 1


Page 01

Financial Broker



Meeting Client Investment Needs





ComplianceMarketing Guidelines


Financial Broker

Page 1


Page 01

Financial Broker



A Guide to Protection for Financial Brokers


One - Unified Voice

The above guides are available to download from the Financial Broker website, www.financialbroker.ie.

For further information, please contact Kimberley Hyland on 01 492 2202 or email [email protected].

Spring 2017 21


Short-term Life vs. long-term FuturesOne of the problems with comprehensive life insurance is the time it takes to get a quote. We live in an age of instant gratification with a need to have answers straight away. In the ‘old days’ a letter would have arrived in our offices, we would carefully consider the contents and then draft a response, perhaps dictating it to be typed. I do accept that there was even a period when we were reliant on carrier pigeon or mail coach to get messages sent, and also a time when I would have needed to sharpen my quill pen to draft a response (they do still use a quill pen to enter ships’ names in the Lloyd’s loss book but that is another story), but I am referring to that time that we can remember (not that long ago!) when people did not expect an answer immediately and were happy to wait. In the 70s it was the telex and then in the 80s it was faxes, but even though communication was quick there was a drama and formality to correspondence that just doesn’t exist today and there was an expectation that it would take at least a few hours if not days to reply. These days we receive an e-mail and can expect to be chased for an answer if we haven’t responded within the hour.

People, quite rightly, want us to deal with an enquiry straight away but what they do not always realise is that insurance is actually quite a complicated business. Life insurance, particularly for larger sums insured or for people with complex medical issues to address, does not always have a simple or instant answer. Doctors can’t be hurried and without a medical report final terms can’t be issued.

Well, to an extent that is true, but Pulse Short Term Cover does offer a solution for people who need cover quickly and can also be a way around the roadblock put up by the need for reports. The typical situations that we have addressed include:

• Business executives who have a short gap in employment between roles

• A client who is waiting for a GP report and wants 30 days’ cover whilst waiting for the report to be returned and assessed. This cover can be extended should it be required.

• A client travelling abroad for work and wanting two weeks’ life insurance cover whilst in that country, perhaps because their current life insurance provider excludes travel to a particular destination.

This is the solution we can offer now, but what about tomorrow?

I am sure like many others working in life insurance the prospect of underwriters’ roles being usurped by robots and/or artificial intelligence is both exciting and challenging. In travel insurance, intelligent modules that interpret customer information and give an accurate analysis of risk are now driving pricing and conditions. Simpler life insurance underwriting is already highly automated and whilst the risk analysis and assessment needed for an impaired life insurance policy is much more complex there are a number of companies that are now working on solutions. Does that make experts like us redundant? Absolutely not.

I recently attended a talk where the speaker was comparing the rise of intelligent software in insurance with the changes in the travel industry that have taken place over the last few years. These days we all go online to buy our cheap flights or accommodation: surely, in that environment, travel agents are just an anachronism hanging on to survival by their fingernails? The reality is actually somewhat different. In fact the travel market has doubled in size in just one generation. While the mass market has gone online, the number of people working in travel has fallen by just 10% (50,000 to 45,000) and travel agents are on average more profitable than before. The surviving intermediaries have adapted and moved up the value chain.

I would hope that this is the model for us too. The robots are coming but I believe we can run faster than they can. We need to be smart to help our clients. If that means making more use of niche solutions like Pulse’s clever interim cover solutions whilst you are waiting for the mainstream market to catch up and provide a quote then so be it!

Pulse Insurance Limited is a specialist provider of life and protection cover for individuals and groups. Pulse helps people with health problems as well as those needing larger sums insured, working overseas or in a hazardous occupation. For more information go to www.pulse-insurance.co.uk.

torquil mcluskyManaging Director

Pulse Insurance Limited

Short Term Cover: Case Study– Female, 52, non-smoker– Awaiting scan results– Heart palpitations– €750,000– 2 months– €1,340 single premium

Cover is available for up to one year on this short-term basis.

“The robots are coming but I believe we can run faster than they can

”

Financial Broker Conference 2017

Page 1


Page 01

Financial Broker





One - Unified Voice


Financial Broker


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Financial Broker Guides

www.financialbroker.ie


Financial Broker


Page 1







Page 1


Page 01

Financial Broker



AddressingInvestment Risk


One - Unified Voice



A guide to thefinancial securityof life companies

One - Unified Voice



A guide to writing a Customer Value Proposition




Page 1


Page 01

Financial Broker





One - Unified Voice



Page 01

Financial Broker



OUVA Guide to Developing Business Strategy for Financial Brokers


One - Unified Voice

Financial Broker


Page 1






Connecting online and offline sales and marketing plans to deliver incremental and sustainable growth and profit


Page 01

Financial Broker



OUVA Guide to Eliminating Provider Bias for Financial Brokers


One - Unified Voice

Page 1


Page 01

Financial Broker



Investment Recommendations and Reviews





Page 01

Financial Broker



A Guide to Financial Planning Recommendations and Statements of Suitability


One - Unified Voice

A Guide to Marketing your Business for Financial BrokersFinancial Broker


Page 1


A Guide to Marketing your Business for Financial Brokers



How to develop and deliver a structured and creative marketing plan to boost the income levels of your business

A Guide to Legal Issues for Financial BrokersFinancial Broker


Page 1


A Guide to Legal Issues for Financial Brokers




Page 1


Page 01

Financial Broker



Meeting Client Investment Needs





ComplianceMarketing Guidelines


Financial Broker

Page 1


Page 01

Financial Broker



A Guide to Protection for Financial Brokers


One - Unified Voice

The above guides are available to download from the Financial Broker website, www.financialbroker.ie.

For further information, please contact Kimberley Hyland on 01 492 2202 or email [email protected].


22 Issue 56

barry mccutcheonProtection Marketing Manager

Aviva Life & Pensions Ireland

Capital Acquisitions Tax Changes in Finance Act 2016The 2016 Finance Act was passed into law on Christmas Day. The increases to the tax-free thresholds that apply to gifts and inheritances that were announced in the last Budget are included. These increased thresholds apply to gifts and inheritances taken on or after the 12th of October 2016.

CURRENT CAT THRESHOLDS (FROM 12 OCTOBER 2016)

Group A : €310,000

(increased from €280,000)

Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.

Group B : €32,500


Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.

Group C : €16,250


Applies in all other cases.

There was no change to the Capital Acquisitions Tax rate of 33 per cent.

The Finance Act 2016 also includes significant changes to the rules governing dwelling house relief granted under section 86 of the Capital Acquisitions Tax Consolidation Act 2003. Amendments made to the relief by the Act considerably narrow its scope so that, with effect from the 25th of December 2016, the exemption no longer applies to gifts of dwelling houses unless the gift is made to a dependent relative of the donor. Prior to the Act, the relief applied to gifts of any dwelling house to any recipients. However, section 52 has significantly restricted the relief, particularly in relation to the ability to make tax-exempt gifts of dwelling houses. In addition, in the case of an inheritance, the exemption now applies only to the principal private residence of a disponer.

Dwelling House Exemption now applies where residential properties are bequeathed by individuals who live there to successors who

1. have lived there for a specified period of time before the inheritance,

2. will continue to live there for a specified period of time after the inheritance, and

3. have no beneficial interest in any other residential property at the date of the inheritance.

A dwelling house will now qualify for the exemption where

• it was occupied as the only or main residence of a disponer at the date of his or her death,

• it was occupied by a successor as his or her only or main residence for the three years preceding the date of the inheritance or, where the dwelling house for which the exemption is claimed replaced another dwelling house as

the successor’s only or main residence, the combined period of occupation was at least three years falling within the four years preceding the date of the inheritance,

• it is the only dwelling house in which a successor has a beneficial interest at the date of the inheritance, and

• it transferred by way of an inheritance except in the case of a gift of a dwelling house to a dependent relative,* or

• a gift that becomes an inheritance when a disponer dies within two years of making the gift.

A dwelling house will cease to be exempt where, within the period of six years beginning on the date of an inheritance,

• it is sold or otherwise disposed of by a successor, or• a successor ceases to occupy the dwelling house as his or

her only or main residence.

If a dwelling house ceases to be exempt, then tax is chargeable as if it had not qualified for the exemption at the date of the inheritance. The inheritance must then be taken into account under the aggregation rules when computing tax on later gifts or inheritances within the same group threshold. However, a sale, disposal or cessation of occupation does not result in the withdrawal of the exemption in the following circumstances.

• The proceeds from a sale are re-invested in a replacement dwelling house that will be the only or main residence of the successor. If less than the full proceeds are re-invested there will be a proportional clawback.

• The successor was 65 years of age or older on the date of the inheritance.

• The successor was required to reside somewhere other than the dwelling house because of an infirmity certified by a doctor.

• The successor was required to live somewhere else, whether in the State or abroad, in order to perform their duties of employment.

Where a person who was 55 years of age or older received a gift or inheritance of a dwelling house prior to the 25th of December 2016 and satisfied the other qualifying conditions for the exemption at that time, there will be no clawback of the exemption as a result of the age threshold being increased to 65 years by Finance Act 2016.

* Dependent relative means a relative of the donor who is incapacitated to such an extent that they are unable to maintain themselves by earning an income from working or who is aged 65 or over.

“The Finance Act 2016 also includes significant changes to the rules governing dwelling house relief

”

Spring 2017 23


How do you build effective Partnerships with Accountants?Developing a network of accountants that will potentially refer clients to you is an important goal for many Financial Brokers today. Unfortunately that’s only half the battle: the other half is getting them to actually refer those clients to you on an ongoing basis.

So here are a few thoughts on how you can build profitable accountant relationships, with accountants referring clients to you regularly.

Develop your accountant value proposition

Lots of you have used the tools made available under the Financial Broker programme and have now done the work of developing your client value proposition (CVP). However you’re not quite finished yet! After all, your CVP is the articulation of the value experienced by your clients. You now need to be able to communicate the value experienced by accountants in dealing with you. Your CVP starts with understanding your clients and, in a similar vein, your accountant proposition starts with understanding accountants: their challenges, the value that they seek in partnerships; and defining how the services you provide will deliver this value to them. If you can help them to solve the problems that they face every day, then they will place enormous value on your services!

Communicate your value time and time again

You then need to get in front of the accountancy partners time and time again to remind them of the value that you can add, and to get regular client referrals. There are many ways you can do this; here are a few examples:

• Add the partners to your own communication programme: Connect with the partners on LinkedIn and also get their permission to be added to your newsletter subscriber list. Let them see the expertise and thought leadership that you have to offer.

• Develop bespoke presentations: These are for the initial meeting with each partner and should focus very much on the role of the accountant and how you can assist them in their own role. Personalise each presentation to the role of the particular partner’s area of specialism – for example the presentation to the tax partner should focus on pension reliefs, tax efficient protection products and other tax angles that you can bring to the table. This shows knowledge, understanding and willingness to engage in their areas of challenge with their clients.

• Case studies: Prepare a number of case studies of innovative solutions that you’ve implemented and that you know are relevant to challenges that are typically faced by the accountant. Don’t leave them guessing as to how you can help: join the dots for them!

• Briefings for partners: Keep the accountants briefed on issues within the life and pensions industry that they need to be aware of, but may not pick up on themselves. This can be through email contacts, lunchtime meetings or other such channels.

Develop joint marketing activities

And then you need to also promote the accountancy firm and help their bottom line! First of all, refer clients to them whenever possible. If you give them new clients, they are certainly going to try harder to reciprocate. Offer the accountant the opportunity to include guest posts in your newsletter. This gives the accountant welcome exposure to your clients. You can also look at hosting joint events to which you both bring clients, take a speaking slot to impress the guests: all of this with a view to you and the accountant meeting each other’s clients and building new relationships.

Prove your value with clients

Of course the biggest barrier to accountants referring clients to you is fear: fear that you will somehow mess up and as a result cause difficulties for the accountant with their client. So when they do take the leap and finally refer a client to you, it’s imperative that you do a good job (as you do!) and then make sure the accountant is aware of it. How do you do this? You might seek a testimonial from the client, which you then share with the accountant. Alternatively you can email the client a few weeks after the end of your work with a short client satisfaction survey – again you will share the results with the accountant.

These are a few thoughts on how Financial Brokers can build profitable relationships with accountants. Win their trust, remove their fears, align yourself to their proposition and demonstrate your value time and time again. And then you will be well on the way to breaking the back of that search for new clients!

StepChange works with Financial Brokers, helping them transition from transactional businesses into valuable advice based businesses.

eamonn twomeyStepChange Ltd

“You need to be able to communicate the value experienced by accountants in dealing with you

”


24 Issue 56

Industry Round-Up

New Ireland announces Millennial Board AppointmentsNew Ireland has announced the establishment of a new Millennial Board working alongside the senior management team to develop new ideas, services and supports for younger generations. The Millennial Board will focus on the financial needs of younger consumers who are becoming increasingly conscious of their financial future.

The Millennial Board is made up of thir-teen appointees, including Niamh Bushnell, Dublin Commissioner for Startups; Brian Corish, Millennial Board Chairman and Chief Customer Officer Bank of Ireland; Stephen O’Leary, Founder of Olytico; and, from New Ireland, Shane Carr-agher, Sean Roe, Serena de Stacpoole, Thomas Moran, Patricia Murphy, Claire Beattie, Philip Howlin, Padraig Mooney and Sarah McDaid.

Discussing the Millennial Board announce-ment, Mick Sweeney, Interim Managing Director, said: “The appointment of our Millennial Board demonstrates our commitment to ensuring our products and services are consistently relevant to younger consumers who are starting to finan-cially plan for their future. Today’s 18-35 year olds could live as much as a third of their life in retire-ment and as an industry we have a responsibility to ensure we are supporting them appropriately in line with their evolving needs and requirements.”

Aviva Life & Pensions: removing monthly Policy Fees to make their Products more straightforwardAviva Life & Pensions have stated that they’re committed to making their products as clear and simple as possible. That’s why they’ve removed the monthly policy fee and some other charges to make their savings, investments and pensions

more straightforward. They’ve already removed the fund-switching charge and administration charges for taking regular, partial and full withdrawals (where applicable). Now they’ve gone one step further and removed the monthly policy fee for unit-linked existing customers.

Aviva is leading the market in simplifying their products by saying goodbye to monthly policy fees. To find out more, give your Broker consultant a call or visit www.avivabroker.ie.

Introducing Royal London’s new Underwriting and Claims Lead

Colette Houton joins Royal London as Underwriting and Claims Lead, where she will be responsible for strengthening the firm’s position in relation to underwriting and claims payment. Colette has 24 years’ experience in the

insurance sector in Ireland. She has a BA in Insurance Studies from the University of Limerick, an ACII Diploma in Life & Disability Underwriting (DLDU), a Diploma in Life and Disability Claims (DLDC), and she has completed the Professional Diploma in Financial Advice (QFA).

Zurich’s Digital Toolkit for Financial Brokers Your website is the first point of contact for many of your customers and it’s well known that potential clients are very likely to visit your website before visiting your physical location. To support your digital presence, Zurich recently made it even easier for Financial Brokers to enhance their website by simplifying access to its web videos, tools and calculators. Over the last 18 months many advisors around the country have availed of Zurich’s suite of videos and simple customer calculators – and feedback has been hugely positive.

To encourage even greater take-up, it’s now even easier to ‘embed’ these onto your own website. Simply go to zurichlife.ie/broker-centre/calculators and choose from the wide menu of calculators and videos. Then grab the relevant ‘embed’ code, which is clearly outlined, and

place it in the text editor of the CMS (Content Management System) for your website. Of course, you could also ask your web developer to do this for you!

The new menu of choice makes it incredibly easy for Financial Brokers to download these tools and calculators. These will enable you to enhance your website for next to zero cost and ensure that your digital shop window looks great!

For more information on how our Digital Toolkit can support you, just speak to your Zurich Broker Consultant.

Irish Life raises another Record Amount for Irish Charities in 2016Ireland’s largest life assurance company, Irish Life, announced recently that it had broken its own record by donating a phenomenal total of €344,000 to two Irish charities: The Down Syndrome Centre and The Laura Brennan Trust.

Each year the charities are selected by the employees and various fundraising initiatives take place, which in 2016 included ‘The Great Irish Life Bake Off’, a Christmas CD, the ‘Last Man Standing’ soccer prediction competition, and ‘Hell & Back’ at Kilruddery Co. Wicklow.


Spring 2017 25

The Down Syndrome Centre was founded by Peter Gaw and his wife Mary as a result of their frustration at not being able to access relevant services for their two youngest children, both of whom have Down Syndrome. The couple run a services led centre for children with Down Syndrome and their families, providing speech and language therapy sessions, occupational therapy and family support services.

The Laura Brennan Charitable Trust was set up to raise much needed funds to support children up to the age of 18 suffering from serious, life-threatening or life-limiting illnesses across North County Dublin. The charity was set up in memory of Laura Brennan, who died in 2008 after a short illness, and provides vital services to families with sick children.

Commenting on the donation by Irish Life, David Harney, Group Chief Executive, said: “Irish Life is delighted to donate this significant amount to two very worthy charities this year. The spirit of serving the communities in which we’re based and supporting those in need is a key part of our Irish Life culture. I’m proud to lead a team that really gets behind this initiative each year, giving their time, energy and support in a way that makes a real difference.”

Friends First Claims Statistics GuideIf your clients have an illness or injury that results in them being too sick to work and therefore losing income, it could impact their everyday financial needs. That’s why your clients need income protection. With Friends First, you can be reassured that you have chosen a company that will treat your clients fairly and pay out when you need them to.

Friends First Claims Statistics Guide provides some valuable insights into Friends First claims experience:

• We paid over €33 million to 1,400 people in 2016.

• €88,370 was the average total payment per claimant – that’s a lot of financial security.

• €1,840 was the average amount we paid out per month – enough to pay the mortgage and keep on top of the bills that matter.

• Four years was the average claim duration – that’s a long time to be without an income if you don’t have cover.

• Men are on average 50 years old when they need to claim and almost 24% of male claimants needed to claim within five years of taking out the policy.

• Women are on average 45 years old when they need to claim and 27% of female claimants needed to claim within three years of taking out the policy.

Meet some of our customers who were able to maintain their lifestyle with income protection in our testimonials section. And if your client needs to claim, our ‘How to Claim’ video explains the process. All of these support tools are available on brokerfirst.ie within the Marketing Supports – Protection section.

Pax Financial Planning and Marie Keating Foundation Partnership rounded upPax Financial Planning were delighted to round up their partnership with the Marie Keating Foundation with a final donation of €7,141.97 to Directors Linda Keating and Elizabeth Yeats in January.

The South Dublin Brokerage, also with offices in Newcastle West Co. Limerick, partnered with the charity organisation in raising cancer awareness and the importance of protecting against the financial implications of a cancer diagnosis.

During a campaign that lasted almost 18

months, Pax donated 100% of commission earned on all Zurich Cancer Cover policies established for their clients under the initiative.

The Marie Keating Foundation runs extensive support services for cancer sufferers, and tying in with a life assurance benefit that aims to alleviate these burdens directly proved a worthy initiative.

Paul Merriman, CEO of Pax, spoke of his delight at being able to give back directly to organisations like the Marie Keating Foundation. “As financial advisors, it’s our responsibility to ensure that our clients are protected against the cost impact of serious illness through benefits such as cancer cover and specified illness. It’s been great to link up with such an excellent charity as the Marie Keating Foundation, who run important support services such as the Comfort Fund, helping those that may not have adequate supports in place”, he said.

New Aviva Retirement Bond joins the Aviva Pensions familyAviva Life & Pensions delivered a new range of market-leading individual pension products in September 2016. This was followed up with the launch of the Aviva Retirement Bond, which was made available from December.

• Aviva Retirement Bond customers get amongst the most competitive packages in the market. Aviva now gives customers access to annual management charges as low as 0.45% for single contributions.

• Each of their pension products has the full range of Aviva investment funds available to it and customers can switch between funds at any time, with no charge for doing so.

• Aviva’s pension products do not have any policy fees: the only charge is a fund management charge.

The launch of the Aviva Retirement Bond is another milestone on Aviva’s journey, which has been all about offering straightforward solutions for Financial Brokers and their customers. Financial Brokers can set up retirement bonds directly through Aviva’s innovative new system WriteNow Pensions – meaning that you can key a policy in as little as seven minutes and have the policy put live, with documents emailed to your customer, in less than 30 minutes.

Find out more at www.avivabroker.ie or speak to your Aviva Broker Consultant.


26 Issue 56

PIBA Winter CPD Bootcamp 2016in association with Irish LifePIBA in association with Irish Life held three CPD bootcamps on November 22nd, 23rd and 24th in Cork, Athlone and Dublin respectively.The topics covered included pensions, investments, protection, mortgages, compliance and ethics.

Richard Crowe (Richard J. Crowe Financial Services) Sean Supple (Actual Insurances), Keith Matthews (Omega Financial Management)

Colin Foran (Actual Insurances) Kevin Fitzsimons (Irish Life), Roger Carragher (Actual Insurances)

Michael Judge (CMCC Financial Solutions Ltd) Tom Mulligan (Independent Financial Broker Ltd)

Cillian O’Dea (Wealth Options Ltd) Tommy Coyne (Thomas Coyne Insurances)

Bartle Landy (Bartle Landy Financial Services) Claire Battersby (Simon Shirley Advisors Ltd)

Barry Corcoran (Arena Financial Services) Dermot Martin (Mortgage & Investment Brokers)

Gordon Dooley (Integritas Financial Services Ltd) John Kilroy (John Kilroy and Associates Ltd)

Elizabeth-Anne Lillis (Veritas Financial Advisers Ltd) Brendan Costello (Talk Financial Ltd)


Spring 2017 27

Noel O’Loughlin (Noel O’Loughlin Insurance Services) Niall Lynch (Niall G. Lynch Insurance Brokers)

Dermot Walsh (Fundamental Life and Pensions Ltd) Liam Byrne (Abacus Finance)

Cormac Farrell (Cormac Farrell Financial Planning) Denis Healy (Denis Healy Financial Ltd)

Gerry Ward (Moneybrain Ltd), Enda Kelly (Kelly Mortgage & Financial Services) Stephen O’Grady (Advance Financial Services)

Tony Fisher (Kilcoran Financial Services), John Kearney (Kevin Condon Financial Brokers Ltd) Noel Woods (Woods Financial Services)

Declan O’Boyle (DSOB Financial Services Ltd) Tom Kennedy (BRM Financial Services) Brendan Kelly, Trish Kelly (Financial Planner) Michael Sheerin, Michael Martin (Royal Irish Insurance)

Diarmuid Kelly (PIBA Chief Executive), Geraldine Layden (Summit Finance)Kathleen Power (KP Financial Services), Sean Ahern (Irish House Owners Association Ltd), Sandra Power (KP Financial Services)


28 Issue 56

colette houtonUnderwriting and Claims Lead

Royal London

The changing Role of UnderwritingThe role of underwriting is synonymous with the insurance business: the industry just would not exist without the ability to evaluate and accept risk, and to price and issue policies. In recent years it’s a function that has been influenced by profound technological advancements, resulting in automated underwriting that has more robust analysis and sophisticated risk-profiling techniques. This means that underwriters now have more freedom to take on higher-value analytical work and concentrate on relationship building. For Financial Brokers, like you, the changing role of underwriting means quicker turnaround times, less onerous requirements due to data insights and increased engagement directly with those making underwriting decisions. And at Royal London we are committed to continuing to modernise our operations when it comes to underwriting to better meet rising demand from you and your clients.

Underwriting has changed

The focus of underwriting as a function has moved away from being an internal process and specific transactions and more towards in-depth analysis and market-facing relationships. Underwriting has certainly changed dynamically since I began my career more than 24 years ago: many will remember those large paper manuals and the requirement to review every case individually. It’s an automated process to a large extent now. Stronger rules and predictive modelling over the last decade have meant that the question has been posed by some: will human underwriters be replaced entirely in the future? In which case, I’d suggest that claims might be the more secure career path! Joking aside, I have no fear for the underwriting role, but the role has and certainly will continue to change.

There will always be the need for underwriters to assess complex cases. And the advent of online systems means that vast quantities of data are now at our disposal. As I see it, the role of the underwriter has moved towards data analysis and being able to interpret large amounts of data into key insights. For instance, we used to get Personal Medical Attendant Reports (PMAR) on all clients with blood pressure issues, but not anymore. Data insight has allowed underwriters to review long held opinions on health conditions and validate the need for medical evidence. Now blood pressure is assessed via questionnaire, reducing the need for medical evidence and resulting in a speedier turnaround time for you and your clients.

Underwriting at Royal London

Since taking on my role at Royal London, I’ve set strategies in place to strengthen the firm’s position in relation to underwriting and claims payment. And I’ve been impressed with the agile and service driven people here. My hope is to continue to improve every aspect of the journey from new business to claims. One way in which we aim to do this is through our plans

to overhaul our claims procedure and determine quicker ways of paying out our claims to your clients. Royal London already has one of the best automated underwriting systems available to Financial Brokers and we plan to continue to review and improve our online system capabilities. We also actively want to reduce medical evidence based on data analytics, which will result in even quicker turnaround on applications.

I’ve had the opportunity to meet with some of you already to discuss the plans afoot. And if I had to provide Financial Brokers with any insight or advice around underwriting I would say:

• Encourage DisclosureEncourage your clients to disclose their full medical history. You can assure them that in the majority of cases people will still get cover while the main reason for non-payment of valid claims is due to non-disclosure. In 2016, 88% of policies were accepted at ordinary rates by Royal London. Overall in 2015 the Royal London Group paid 98% of life claims and 93% of specified serious illness claims.*

• Collect all the information from the outsetWhether it is cholesterol readings, blood pressure readings or histology reports, get it all from your client at the beginning. Cases can be delayed by a period of up to six weeks in some circumstances if waiting for information from a GP.

I’m looking forward to meeting you throughout the year, and also to the launch of many exciting developments that will help improve our underwriting and claims services. I’d also like to encourage you to get in touch and share your feedback on our improvements and on what you’d like to see in the future. If you have any questions or queries around underwriting feel free to email me at [email protected].

* Group protection figures Royal London UK Intermediary protection business and Royal London Ireland claims paid (1 January 2015–31 December 2015).

“The role of the underwriter has moved towards data analysis

”


Spring 2017 29

emer kirkHead of Business Development & Marketing

Harvest Financial Services Limited

Financial Planning matters for Clients on Separation or DivorceFinancial planning for clients who are separating or divorcing can be complex, especially where there are significant assets or a first and second family to consider. As Financial Brokers we can significantly improve the outcome for our clients by identifying and managing the financial issues that can arise.

Two of the most common areas where Financial Brokers will be involved are in structuring life cover and pensions.

1. PROTECTING MAINTENANCE PAYMENTSWhere the separation or divorce requires that one party puts life cover in place to provide maintenance payments for children in the event of death while the children are still dependant, the potential Capital Acquisitions Tax (CAT) liability needs to be considered. In the event of a claim the beneficiaries are subject to inheritance tax on receipt of the sum assured. Where an ex-spouse is the beneficiary they are entitled to the ‘strangers’ (Group C) CAT threshold, while for children it is the Group A threshold.

2. PENSIONS Pensions can be complex at the best of times, but add them in to separation or divorce proceedings and the complications are multiplied. While there is no automatic entitlement to a share of a pension in the event of a judicial separation, divorce, dissolution of a civil partnership, or ending of a relationship with a qualified cohabitant, an application for a Pension Adjustment Order (PAO) may be made to the courts.

A PAO is a court order that awards a portion of the member’s pension benefits to the non-member spouse or for the benefit of a dependant member of the family.

Once the PAO has been granted the benefits for the non-member can remain in the existing pension scheme, or may be transferred to a separate arrangement for the non-member’s benefit.

‘Earmarked’ benefit – non-member spouse does not transfer out

Where the designated benefit is ‘earmarked’, the timing of accessing the retirement benefits under the PAO by the beneficiary (non-member) will be decided according to when the member decides to take their retirement benefits.

The beneficiary of a PAO is independently entitled at the member’s retirement to the same retirement options as the member in respect of their retirement benefit. The beneficiary can independently choose how they wish to access their retirement benefits, e.g. where an occupational pension scheme provides the Approved Retirement Fund (ARF) option the member may choose the ‘traditional benefit’ option, i.e. taking a lump sum within Revenue limits and using the balance to purchase an annuity, while the beneficiary may exercise the ARF option in respect of their share of the pension fund.

Non-member spouse establishes an independent benefit – ‘split’ benefit

Where the fund is ‘split’, and the designated retirement benefit is transferred out to a pension arrangement in the name of the non-member, they can decide when to take the retirement benefits. The non-member can generally access the retirement benefits in the new arrangement at the earliest time the member can access their benefits, e.g. the member’s 50th birthday, for retirement benefits transferred from an occupational pension scheme.

Your client can choose how he/she wishes to access their retirement benefits, e.g. lump sum, ARF or annuity.

Retirement lump sums

The retirement lump sum paid to each party under the terms of the PAO is treated as a separate lump sum. This means that the tax-free limit of €200,000 applies individually and the extent to which a party is charged the standard chargeable amount, i.e. the portion of the lump sum in excess of €200,000 which is subject to income tax under Case IV of Schedule D, is based on the amount of the lump sum paid to that party.

PAOs and Standard Fund Threshold/Personal Fund Threshold

The amount awarded to the non-member spouse under a PAO remains part of the member’s fund for threshold purposes. This means that when the member takes retirement benefits the calculation should be done as if the PAO had not been granted. If the non-member’s designated benefit was transferred out to an independent benefit before the member takes their benefit, the amount that was transferred out is revalued based on the fund growth it would have achieved had it stayed in the member’s fund. If the member’s pension exceeds the threshold the tax due on the excess fund will be split between the member and the non-member spouse in the same proportion as their share of the fund.

An amount awarded to the non-member spouse under a PAO does not form part of the non-member spouse’s fund for threshold purposes.

Financial Brokers have a critical part to play in helping their clients to understand the value of their pension benefits, both before and after any settlement is made, and in ensuring that both parties continue to plan for a secure and comfortable future.

The information contained herein is based on Harvest Financial Services Limited’s understanding of current Revenue practice as at January 2017 and may change in the future. The legislative information contained herein is based on Harvest Financial Services Limited’s understanding of current practice as at January 2017 and may change in the future.

This material is not intended to provide advice and is provided for general information purposes only.

“The beneficiary can independently choose how they wish to access their retirement benefits

”


30 Issue 56

stephen browneManaging Director

Voyant Ireland

Who is Future Cashflow Planning for?Future cashflow planning is probably the biggest innovation in the financial planning industry over the last decade. Seventy-eight per cent of Financial Brokers in the UK believe it to be essential to true financial planning (Financial Planning Today 2016 poll). It’s been a game changer for Financial Brokers here also, as they move from being transactional product sellers to positioning themselves at the heart of a client’s personal financial affairs. For many firms, future cashflow planning has been the key factor in driving up trail commission / recurring income levels and, as a result, significantly adding to the value of the business.

Future cashflow planning is described in many ways. Here are a few other descriptions you may have come across:

• Cashflow modelling• Financial forecasting• Lifestyle financial planning.

They all amount to the same thing: using a software programme to build your client’s financial picture for every year from now until death. Cashflow planning takes account of income, expenditure, assets, liabilities, future planned expenditure and purchases, future windfalls etc., and plots all of this out into the future.

Is cashflow planning just for the wealthy?

Let’s nail this one from the start! It definitely is not just for the wealthy! Some Financial Brokers see it as only for the wealthy, as they see the following scenario:

1. It takes a good bit of time to set up a client’s record, so2. You have to charge a fee for it, and3. Only wealthy people pay fees.

At Voyant, we don’t agree with any of these statements! If you’ve put time into learning how to use the system, client plans can be built really quickly: in fact in minutes. They then change the client conversation every year into the future, which can be justified by increased trail commission amounts.So, if future cashflow planning is not just for wealthy people, who is it for? We’ve come up with three types of clients that really benefit from cashflow planning.

The future thinkers

Some clients are very focussed on today. However, more people now want more clarity and financial certainty about the future, right into their later years. They want help to make choices: will they be able to afford a holiday home in ten years’ time?

Future cashflow planning enables you to build that picture for them.

The ‘have I enough’ crew

How much is enough money? The amount will vary for all of us,

but it’s a figure we need to know. Many people, even wealthy people, have simply no idea if they have enough. So they keep on saving, often at the expense of living a better lifestyle today: one that they actually can afford.

Other people have bits and pieces everywhere and need to see what it all adds up to. Have they enough? Plenty? Being able to answer all of your clients’ questions and concerns on the spot is a very powerful (and valuable) position to be in! Clients will want to see you each year for continued comfort about their future financial security, which leads to more revenue for you over a longer period. As future assets become liquid you will also be best placed to advise on and manage them.

As a result of future cashflow planning, some people need to be told it’s time to spend – they have more than enough to achieve all of their future objectives! It’s game over here for product sellers as there are no product needs. But your client will pay you as they seek to ensure their financial situation stays healthy each year into the future.

The decision makers

Some people have a big decision to make and want to know what the long-term financial implications of each outcome will be. They might be planning the sale of their business, now or in five years’ time. They might want to interrogate the amount of life cover they have: is there enough to maintain a lifestyle upon the death of a partner?

Cashflow planning will give you the full picture in making these decisions. And now your client will see that they are receiving professional financial planning, rather than product selling based on a point in time. Client trust is shown to increase with the more scientific nature of the process.

Future cashflow planning is not just for wealthy clients. It will open up a world of information to many of your clients, and in the process will build lasting client relationships and drive up the future income of your business.

“More people now want more clarity and financial certainty about the future

”

Spring 2017 31


HTB IncentiveOn the 25th of December the President signed into law the Finance Bill 2016, which set out the provisions of the new Help To Buy (HTB) incentive. The HTB incentive is designed to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house or apartment to live in as their home. It does this by providing for a refund of income tax and DIRT paid over the previous four tax years to these first-time buyers.

A first-time buyer of a house or apartment who purchases or self-builds a new residential property between the 19th of July 2016 and the 31st of December 2019 may be entitled to claim a refund of this income tax and DIRT.

The first-time buyer must not have, either individually or jointly with any other person (directly or indirectly), previously purchased or built a property. Where more than one individual is involved in purchasing or building a new home, all of the individuals must be first-time buyers.

The property must have been purchased or built as the first-time buyer’s home. The incentive does not include properties acquired for investment purposes. It must be a new build and the construction must be subject to VAT in Ireland. Properties that have never been used as a dwelling and are now being converted for residential use may qualify.

The property must be occupied by the first-time buyer, or at least one of the first-time buyers in the case of multiple first-time buyers (a group), for a period of five years from the date the property is habitable.

Where the property is a new build purchase the contractor must be approved by the Revenue Commissioners as a qualifying contractor for the HTB incentive. First-time buyers should ensure that the contractor is a Revenue approved qualifying contractor before purchasing the property if they wish to avail of the HTB incentive.

Applicants looking to avail of the rebate should first ensure that their tax affairs are up to date. They can do this by logging onto Revenue systems myAccount (for PAYE employees) or ROS (for self-employed).

How do applicants apply for HTB?

The applicant must apply for HTB online.

• If they are a ROS business user (self-assessed) they can apply through ROS.

• If they are a PAYE employee only, they can apply through myAccount.

Applicants can submit their claim from the 3rd of January 2017.

After the applicant has applied for HTB online, they will be issued with an email that will give them an application code, the applicant’s HTB access number, confirmation of the maximum relief available (subject to a mortgage of >70% and an amount no greater than 5% of the purchase value of the residence) and the expiry date (one year from the date of the application).

The applicant should provide the application code and HTB access number to the qualifying contractor and to the mortgage provider.

The mortgage provider can use this to check the maximum relief the applicant is approved for.

Qualifying contractors will also need these details to log on and confirm the property details prior to any payment. The maximum relief may change based on the final purchase price/valuation of the property.

How to Claim for HTB

There are a number of requirements that must be verified online in order for a claim to be made. Some of these include a copy of the signed contract, confirmation that the balance of the deposit is paid, the total deposit, property details, purchase price etc.

Once the claim is submitted, as part of the claim stage, before the refund will be paid the details will need to be verified by:

• the developer/contractor in the case of the purchase of a new build, or,

• a solicitor acting on the applicant’s behalf in the case of a self-build.

The refund will be paid as follows:

• Retrospective customers (those who purchased between the 19th of July 2016 and the 31st of December 2016 inclusive): the tax refund will be paid directly to the first-time buyer

• Purchasers of a new build after the 1st of January 2017: the tax refund will be paid to the qualifying contractor

• Self-builds after the 1st of January 2017: the tax refund will be made to the claimant’s bank account, which must be held with the mortgage institution. If the claimant does not have an account with the mortgage institution, he/she will need to open one with them.

The HTB rebate will take the form of a repayment of income tax and DIRT paid in the years selected for refund by the applicant from the four tax years prior to making an application. Where a contract is signed for the purchase of a new dwelling in the period from the 1st of January 2017 to the 31st of December 2019, the refund will be paid directly to the contractor as part of the deposit required from the purchaser. This will be treated by the contractor as a credit against the purchase price of the qualifying residence.

rachel mcgovernChief Operations Officer

PIBA

“The property must have been purchased or built as the first-time buyer’s home

”

PIBA Update


32 Issue 56

Financial Broker Conference 2017The conference took place in Citywest Hotel, Saggart, Co. Dublin on Thursday the 23rd of February 2017. The day consisted of seven sessions: four on the main stage and three breakout sessions. The topics covered included consumer perceptions of Brokers, financial planning following a relationship breakdown, taxation, social selling, and creating a standardised set of customer information for the Financial Broker community. There were approximately 300 delegates in attendance on the day.

Spring CPD Seminars in association with Zurich LifePIBA ran a series of Spring CPD seminars in association with Zurich Life on March 21st, 22nd and 23rd in Cork, Galway and Dublin respectively. Topics covered included pensions, investments, protection, compliance and mortgages.

Upcoming EventsPIBA AGM 2017This year’s AGM will be held on Thursday the 18th of May 2017 in the Clayton Hotel, Ballsbridge, Dublin 4. Further detail on the agenda will be circulated to members in the coming months.

PIBA May CPD Seminars in association with Friends FirstPIBA will be running a series of CPD seminars in association with Friends First on May 23rd, 24th and 25th in Cork, Athlone and Dublin respectively. These seminars will include presentations on ethics, pensions, protection and investments. Registration for these seminars will open in the coming months.

For more information on PIBA events please con-tact [email protected] or visit the events section of our website, www.piba.ie/events.

SubmissionsBrokers Ireland made its submission on the Central Bank’s Consultation Paper on the Review of the Minimum Competency Code 2011 on the 15th of February 2017.

MeetingsDepartment of Finance — Brokers Ireland met with the Department of Finance on the 12th of January in relation to the transposition of the IDD.Central Bank — A delegation from PIBA attend-ed the Central Bank’s Breakfast Seminar on IT and Cybersecurity Risks facing the Financial Services Industry, which took place on the 24th of January.BIPAR mid-term meetings — A delegation from PIBA attended the BIPAR mid-term meetings in Dublin on the 16th and 17th of February.

Updates were provided on the current state of play in respect of:

• ESMA’s recent developments in regulation• Impact of digitalisation• Data Protection – the impact of the GDPR on

the insurance distribution sector.

Eoghan Murphy, the Minister for Financial Services spoke about the importance of the financial services industry in Ireland and the openness of Ireland to business.

Bernard Sheridan, Director of Consumer Protection, Central Bank of Ireland provided an update on the current regulatory framework in Ireland.

13th of January – Legislation & Compliance sub-committee meeting.17th of January – PR & Communications sub-committee meeting.19th of January – Broker Representation sub-committee meeting.24th of January – Main committee meeting.3rd of March – Legislation & Compliance sub-committee meeting.7th of March – PR & Communications sub-committee meeting.9th of March – Broker Representation sub-committee meeting.14th of March – Main committee meeting.

PIBA in the Press23/11/16 – Cut to Exit Tax is unaffordable, says Minister [The Times online]23/11/16 – First Time Buyers no longer need 20pc Deposit [Thejournal.ie]24/11/16 – Rule change set to spark off Building Surge [Irish Independent]23/12/16 – Plan your Financial Year now [The Sunday Business Post]08/01/17 – Flood of Applications for Help-to-Buy Scheme [The Sunday Business Post]08/01/17 – Bank of Ireland to use Brokers again to sell Mortgages [The Sunday Times]13/01/17 – Irish Mortgage Rates almost twice Eurozone Average [RTÉ]15/01/17 – Shield your Savings [The Sunday Times]15/01/17 – Retirees have just 10 Days to save Funds [The Sunday Times] 17/01/17 – Help-to-Buy ‘will fuel House Price Rise’ [Thejournal.ie]17/01/17 – We need more Houses … the Average Price is now €250k [Irish Daily Mail]31/01/17 – SME Lending up 5pc but Cost of Credit stays high [Irish Independent]31/01/17 – SMEs bemoan Lack of lending Competition [Newstalk]05/02/17 – Mortgage Drawdowns jump by 14 Per Cent [The Sunday Business Post]19/02/17 – Saving is not a Luxury, so make Tax Rates the same for All [The Sunday Times]

Events Compliance & Legislation PIBA Committee Meetings

Can you objectively justify your Mandatory Retirement Age?In Ireland there is no single fixed retirement age for employees. The statutory retirement age for some public servants who joined the public service before the 1st of April 2004 is 65. Since the 1st of January 2013, the minimum retirement age for new entrants is 66, rising to 68 in 2028 in line with the State contributory pension.

If you want your employees to retire at a certain age, you need to express this in writing on hiring. This is usually written in a contract of employment, or in a Company Handbook, or both. For the private sector, each employer can decide the normal retirement age (NRA) for their company. At present, this is usually 60 to 66 years old. The most common NRA at present is 65. Whatever age is decided, you must be capable of reasonably and objectively justifying it if ever challenged by employees as being discriminatory on grounds of age.

Employers often question what constitutes objective justification of a retirement age, as there is no clear statutory guidance on this point. Instead, many of the objective justification ‘tests’ have been set out in case law both from the Irish Courts and in the Court of Justice of the European Union. There are NRA industry norms that can assist greatly in removing the risk of your NRA being challenged, and it would be recommended that you do not deviate too far either side of these.

Some examples of objective justification are:

• Inter-generational fairness• Dignity• Balancing diversity in the workplace• Maintenance of dynamism and motivation• Preservation of an age balance of an organisation, provid-

ing a wider mix of skills and experience and allowing for the recruitment of people with newer and differing skill sets and experience

• Providing opportunities in the labour market that can include some succession planning

• Ensuring levels of service are maintained at a certain quality

• Health and safety concerns – not every working environ-ment carries with it the same risks to health and safety, especially office based roles that would be common in Financial Services.

You should keep the retirement age under constant review and apply it consistently across the company. When determining your NRA, make sure to consult with an expert to ensure it is fair and not discriminatory. The Courts take matters on a case by case basis and so the NRA needs to be objectively justified across a number of areas. This may mean that some roles’ ages are older than others based on the activities they perform.

If you do not have a written retirement age for your company in place, this can be added at a later stage in agreement with your employees. The age profile of the company would greatly impact the ease of implementing an NRA below 65. If there are employees already at or near the NRA you wish to implement, this becomes more complex and you would need to consult with a HR expert to ensure that this is done correctly and that you do not place the company at risk of litigation.

This is a highly complex and very important topic. Ensure you know where you stand with all your employment relationships to avoid unnecessary risks to your business.

Kala Management Solutions Limited offers a wide range of HR services. Visit www.kala.ie for a full outline of our services. For a free consultation contact us on [email protected], (01) 406 1475.

gillian knightManaging Director

Kala Management Solutions

Spring 2017 33


“You should keep the retirement age under constant review and apply it consistently across the company

”

34 Issue 56


The Importance of understanding your Policy ObligationsIf you are fortunate, you may never have to make a claim against your insurance policy. However, when things do go wrong and you are involved in civil proceeding, breach of duty or other loss that is covered by your professional indemnity (PI) insurance policy, you can look to your PI insurer for cover to protect you. Most policyholders do not appreciate the value of their insurance policy until they need to use it: that is, to make a claim.

Anyone engaged in the provision of professional services, whether this be advice, consultancy, or representation, has a potential exposure to a claim being made against them by a client as a result of an alleged breach of professional duty.

Trust me, the business that you have worked so hard to achieve can be easily damaged by the interference and costs of a professional indemnity claim. The comfort and peace of mind that your professional indemnity policy provides in such a circumstance can be invaluable.

The value of an insurance policy needs to be appreciated. You do not want to fall at the first hurdle simply because you did not review the terms and conditions of the policy prior to relying on them. These terms and conditions form part of the contract between you and the insurance company and it is important that you read and understand them.

The reasons why financial advisors should have professional indemnity insurance are very obvious. They are hired to provide financial advice, so any potential negligence or errors made in the advice given could potentially lead to financial loss for their client. Given that financial advisors provide advice about high value products such as pensions, life assurance, and investments, the financial loss for a client can be significant and so the threat of legal action is very real.

An insurance policy written on a ‘claims made’ basis meets claims that are made and reported during the policy period for work undertaken after the retroactive date shown in the policy. The ‘claims made’ underwriting basis is the market prevalence for professional indemnity and other liability policies such as directors’ and officers’ liability and pension trustee liability.

The requirement of a ‘claims made’ policy to have claims reported during the policy period is very onerous upon the insured, and the insurer will usually ask for a no claims declaration at each renewal stating that, after investigation, there are no known claims or circumstances that could give rise to a claim that have not been reported. This needs to be signed by a person authorised to make that declaration.

Failure to report a claim in the correct policy period may lead to the claim being declined. There is no similar requirement for a no claims declaration for a ‘claims occurring’ policy, but the policy will contain claims conditions that need to be complied with in order for a claim to be met.

A typical claims condition will require the insured to notify a circumstance that may give rise to a claim, in writing to the

insurer, as soon as is practical during the policy period. In some cases, the insured’s obligation is a condition precedent to liability whilst in other cases there may be a time-defined deadline for reporting, e.g. seven days after you become aware of the notifiable matter.

Under a ‘claims made’ policy, claims are covered only if they are notified to the insurer in the correct policy period, which is the period in which the claim is first made against your firm or the period during which you first become aware of an intention to claim against you. Your firm could be exposed to liability for the full amount of a claim if you do not notify the claim at the right time, i.e. during the correct cover period. Claims conditions are fundamental to insurance policies and failure to report a circumstance in the correct period may lead to a claim being declined.

If you are fortunate, you will never have to avail of the cover afforded by your PI policy; however in the event that you do, it is vital that you have read your policy carefully, cover to cover, and fully understand your own obligations under the terms and conditions.

“Insurance companies sell what might happen tomorrow. Historians sell what certainly happened yesterday.”

— Mokokoma Mokhonoana

For further information or if you require a PI quotation through our dedicated facility, please contact Sinéad Roche, Lockton Companies, on (01) 858 5201 or [email protected].

sinéad rocheProfessional Indemnity Manager

Lockton

®

“The value of an insurance policy needs to be appreciated

”

Member Profile


Spring 2017 35

marie ainsworthManaging Director

PIBA Member Marie Ainsworth

Company Name Mount Street Group

Location Sandymount Village, Dublin 4

Established 2008

Background

I established Mount Street Group nine years ago, specialising in investment advice, trusteeship, and pensions advice.

Our clients include intermediaries, where we are engaged to provide trustee services to the intermediaries’ own clients (group company pension plans or self-administered schemes). We also have our own group clients to whom we provide trusteeship and pensions consultancy advice; and we offer a wider range of services to private clients, such as protection and personal investment advice, and longer-term financial planning.

I have been in the life and pensions industry at a senior level for over 20 years and have extensive experience of structuring, administration and legal aspects of corporate pension schemes. I started my career in Irish Pensions Trust and went on to work in Canada Life, AON, BCP, and Liberty, holding several directorships, prior to establishing Mount Street Group.

I am a Fellow of the Irish Institute of Pension Managers, a Graduate of the Marketing Institute of Ireland, a Retirement Planning Advisor (RPA), a Qualified Financial Advisor (QFA), a QPT (Qualified Professional Trustee) and a Pensioneer Trustee.

How has our organisation grown?

Mount Street Group have continued to grow year on year, increasing our portfolio of personal clients, group pension schemes and small self-administered schemes. Our trusteeship business has seen significant growth, as existing trustees are being advised by their advisors to opt for the independent trustee route due to the fact that it is a very specialised and responsible role. The hidden costs of being a lay trustee (opportunity costs, time out for training etc.) in nearly all cases far exceed those of engaging a professional trustee.

What we offer as independent trustees

We work closely with competent and professional Financial Brokers, with a clear commitment to acting as trustees. We are, of course, required to fulfil our regulatory and governance duties.

In terms of investment oversight our duties as trustees are to ensure an adequate default fund option and also to ensure that a range of investment strategies is available and communicated to members appropriate to their risk preferences and life cycle. However, in all situations to date, the financial advisor has already put in place the correct strategies, with Mount Street Group effectively signing off on same.

Challenges for the Broker industry in 2017

There are many challenges that face the Broker industry in 2017, the most dominant being the continued soft market, complying with all regulation, and keeping on top of emerging risks.

Top tips for consumers

If you haven’t already engaged with an independent advisor then do so.

Just as you already understand that you must save for a holiday, you must also save for that time when you aren’t or don’t want to be working full time – there are both significant tax incentives and long-term growth that make it easier than you might think.

What we hope to achieve in 2017

• To partner with more intermediaries, particularly on trustee business.

• To grow our renewal income.• To continue to enjoy my work and my clients.

Hobbies and interests

I love to ski (actually, I really, really love to ski) with my children and friends.

I also love to run along Sandymount Strand a couple of times a week, and also around the forests in Stepaside and Kilternan.

Quarterly Crossword Competition


36 Issue 56

how to enterSimply complete the crossword puzzle and send your entry along with the form to: Crossword Competition, c/o Salient Print Management, 37 Woodlands, Naas, Co. Kildare, W91 KR8W.

Entries to arrive not later than 30th April 2017.

Name: ..................................................................................................................................................................

Company: ..................................................................................................................................................................

Address: ..................................................................................................................................................................

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Phone: ..................................................................................................................................................................

WIN a two night stay* at the Portlaoise Heritage Hotel* Includes two nights bed & breakfast and one evening meal.

The newly renovated and designed Portlaoise Heritage Hotel offers complete luxury in an opulent setting. The all new Portlaoise Heritage Hotel has earned itself the reputation of being the most sought after hotel in Ireland. Nestled in the heart of Portlaoise town, this sophisticated urban setting is perfect for business or pleasure. Its striking entrance creates an impressive sense of space and classic modern elegance. The hotel features 114 bedrooms, a choice of unique dining experiences, and a White Flag 5* Health and Leisure Club.

The all new dedicated conference wing offers a choice of meeting and banqueting rooms with varying capacities from 5 to 500.

The experienced conference and event team at the all new Portlaoise Heritage Hotel assures you of their best attention from initial enquiry to the successful completion of your meeting, conference or exhibition. They are ready to share their expertise, to help you organise your event, and to advise you on various options for team building and leisure programmes for partners.

The Portlaoise Heritage Hotel boasts what is undoubtedly the finest conference and meeting facility in the midlands in one of the most accessible locations in Ireland. The hotel is only one hour from Dublin, just off the M7 motorway, and has excellent rail and road access to any part of the country.

Tel: (057) 867 8588. www.theheritagehotel.com.

General Knowledge Crosswordacross6 Famous musical set in Berlin in 1931 (7)7 See 1 Down9 Italy’s most famous fashion city (5)10 Card game of Uruguayan origin using two packs of cards (7)12 Female British boxer who won Olympic gold in 2012 and 2016 (6,5)14 President of the USA (6,5)18 Song which is sung to send a child to sleep (7)19 ‘______ On The Tracks’, a classic Bob Dylan album (5) 21 He scored a hat-trick in the 1966 World Cup Final (5) 22 Republic in north-western Africa (7)

down 1 And 7 Across. Ricky Gervais’ most famous comic character (5,5) 2 Highly seasoned sausage (6) 3 Hard, black, semi-precious variety of lignite (3) 4 Task or chore (6) 5 Branch of science concerned with the bodily structure of humans (7) 8 Soldiers fighting on horseback (7) 11 City in Andalusia, renowned for its architecture (7) 13 Founder and first king of Rome (7) 15 Peter, the BBC’s ‘Voice of Golf’ for many years (6) 16 Playwright who wrote ‘The Crucible’ and ‘Death Of A Salesman’ (6) 17 Rock star who died in January 2016 (5) 20 North American red deer (3)

SOLUTION to the Winter 2016 CrosswordCONGRATULATIONS to competition winnerMaurice Burke QFAWindmill Financial Services Ltd,3rd Floor,River Front,Howleys Quay,Limerick.

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NO ONE CAN.HOWEVER 1 IN 3 FAMILIES STILL HAVE NO FINANCIAL PROTECTION.

IRISH LIFE PRESENTS

redicting the FutureP

Your number 1 supporter Information correct at January 2017.Research conducted by Red C research company.Irish Life Assurance plc is regulated by the Central Bank of Ireland.

That’s how many parents say they have no Life, Specified Illness or Income Protection, whatsoever. To help support you to change that, we’ve launched a major national advertising and PR campaign. The key message is your clients can be better prepared by making sure their income is protected.

To find out more about the range of supports available, ask your account manager or visit bline.ie today.

ILA 12908 (NPI 01-17).indd 1 19/01/2017 19:34

Personalised Pension Guidepath Broker Ad 1216.indd 1 22/12/2016 10:40

the financial broker - brokers ireland · spring 2017 3 we’ve told monthly policy fees where to...

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