liam carberry PIBA Chairman
Dear fellow Brokers, it seems like only yesterday that I gave my last report to you in this magazine. Since then PIBA have undertaken the following activities on behalf of members. We had the media launch of Financial Broker, with radio advertising between September and November, and it was particularly rewarding to bring this three-year project to fruition. An overwhelming 350 Brokers joined financialbroker.ie and paid the voluntary contribution, but please note: this project is for all Brokers. We urge all Brokers to use the title ‘Financial Broker’ and the marks (logo, strap lines etc.) The more these messages are used and reinforced with consumers the better. * I would like to also thank the companies who are using the ‘Financial Broker’ term and we are currently in discussions with them about how we can expand this project in the New Year. Over the past three years, PIBA has put an enormous amount of work into pensions policy together with the Life Industry Forum. The budget crystallises the work on the tax relief issue but it is clear that pensions will continue to be a key priority for a long time to come (the DSP charges report and the auto enrolment debate being pivotal for advice based pensions). A significant number of members requested assistance with online returns in June and at the time of writing, compliance queries have stepped up for the Fitness & Probity staff deadline (1st of December) and Minimum Competency Requirement – Statement of Grandfathered status (31st of December). This year we have increased our compliance unit to three full time staff (Elizabeth Smith Wright, Áine Whelan and Sarah Nolan, who joined this year). We continuously invest in the education and training of our key staff and both Elizabeth and Áine are fully ACOI qualified. I should also mention that our CEO recently obtained a Graduate Diploma in Financial Planning (the gateway course for the CFP designation).
IMD II and commission bans are a key focus for us. A delegation from the Board of PIBA and the Legislation and Compliance Subcommittee met Irish MEPs in Brussels on the 3rd of October 2012. We impressed upon them the importance of the commission system in delivering choice and value to consumers and competition in financial services. We received a good hearing and we will be maintaining these key contacts as the legislative process unfolds. We also met the Department of Finance on the IMD II issue and they will have a key role as Ireland assumes the EU presidency in January for six months. There has been a lot of talk about the business model for distributing life assurance (see CEO article page 5). Some changes appear inevitable in this regard but you can rest assured that PIBA will be to the forefront in helping members meet the challenges brought by this. Our membership stands at an impressive 870 Brokerage firms and I would like to thank every single one of you for your support during these difficult times. The work that we do is critical for the very survival of SME Insurance and Financial Brokers, and PIBA delivers real and tangible benefits to our sector — compliance support, 180 deals, the promotion of Brokers, lobbying and member support. On your behalf, I would like to thank all our Board and Subcommittee members, who give their time on a voluntary basis. A special word of thanks goes to those members travelling to attend our meetings, rising at 5am and driving long distances to the PIBA office. I would like to thank our staff for their dedication and hard work throughout the year. Finally, a word of thanks to our supporters in insurance companies. I wish you all a Merry Christmas and, dare I say it, a prosperous 2013.
* Subject to compliance with the CPC (i.e. 75% of turnover based on advice given on a fair analysis basis).
Liam Carberry PIBA Chairman
Winter Spring 2012 1
Editorial The abyss, a void, nothing: whether it’s a good place or a bad one depends on your point of view. So, what if you could start again? What would you be? What would you do? Imagine if we could re-imagine our industry; what would it look like? How would you design the life and pensions market from the ground donal milmo-penny Editor
Have you really figured out how you’ll grow your pension business? Irish Life have launched a major new pensions crusade to help you grow your pension business. Over €1 million has been invested in a full campaign including TV, press and a range of sales supports. There’s consumer pension guides and online tools to help you grow your business. Guides
up? As the client-facing part of that world, who would you be, how would things work? What would people think of you and our industry? How would you get paid? How would you spend your day? Would it look much the same as today or would it be quite different? These are big questions to ponder: ones we seldom have the time to consider. The thing is, change is always inevitable and nothing stays the same forever. If you buy into the whole Darwinian school of thought we are constantly evolving in tune with our environment. This is also true of our industry; we have come a long way rather quickly in recent times. From a world of paper, we now work largely electronically. We communicate with our clients and life company colleagues by email, we submit proposals online, we use CRM software in place of filing cabinets and that’s only skimming the surface. Entrants to our business have to take professional exams and we all have to participate in continual professional development. Despite all the things that are fundamentally the
same such as our business being one about people, gradually, but constantly, we must move forward and look to the future. In my own practice, we recently implemented a number of new software products. This meant learning a new way of doing things. It was tiresome and given my diminishing youth I had internal conflicts about embracing change. However, when I did, change improved my business. Oftentimes, positive progress involves change that we may not initially wish for or look to embrace. It is undeniable that there is a breeze currently blowing across our industry which carries a desire for a level of structural change. Some prominent voices have for some time been proclaiming that “the business model is broken”. Regardless of how strongly you agree with this or otherwise, it seems clear that there are issues. What is undeniable is that the model in which we operate needs to work for all the key stakeholders. Firstly, it needs to work for our clients, but it also needs to work for us as Financial Brokers as well as for the life offices. The interview with Friends First’s new luminaries in this issue is interesting in this regard. The matters raised will become very topical in our community in the period ahead; it goes without saying that PIBA will be active participants in the debate.
ILA 9806 (NPI 09-12)
Go to bline.ie for full information on our range of supports or please contact your account manager for ideas on how to grow your pensions business.
Irish Life Assurance plc is regulated by the Central Bank of Ireland.
Your No. 1 supporter
Winter Spring 2012 3
“Zurich Broker Commitment Programme. The tools for success.”
At Zurich we believe that, when you do better, we do too. That’s why we launched our programme of specific broker commitments, and why we continue to measure our performance against those benchmarks. Every aspect of our service is being consistently improved, so that we can provide you with the tools to achieve greater success. For more on our Broker Commitment Programme talk to your Business Development Executive or visit zurich.ie/brokers
New Model Army The proposers of the “the model is broken” theory seem expert at identifying problems with the current business model for the distribution of life and pensions products. But they never appear to have any answers to the problems and issues they highlight. Could the reason for this be that they think Financial Brokers and their clients won’t particularly like the new model? diarmuid kelly Chief Executive PIBA
A trip down memory lane Most Brokers will remember initial units (also called capital units; also called fund A units: we have at least three names for the same thing in this business). These were the mechanisms that life companies used to recoup initial costs (including commission) up to the mid to late 1990s. Usually the first two years’ pension contribution on a regular premium pension went into these units, which were charged an excess management fee. If you measured these initial units by the amount of single premium you would need to invest at the start of the policy to compensate for this cost, it would be 150% of year one premium where the contract had 30-40 years to run. Equitable Life memorably described this as “two year hello money that you could say goodbye to”. I can recall some Brokers saying that when disclosure of commissions was introduced, some clients were surprised to see how little they were getting in commission, having been conditioned to believe that most of the upfront charges went on commissions. The other system of charging was “non/nil allocation periods”, where no investment took place for the initial period of the policy. Not alone were charges a multiple of Broker commissions but these contracts made the policies inflexible for increasing and decreasing contributions and for career changes and breaks. But they did have lower annual management charges (AMCs) than those that prevail today.
100% allocation or bust? After a brief dalliance with factory gate pricing in the mid to late 1990s, most life companies gravitated towards contracts with no upfront charges and where charges were more or less level through the term of the policy. The key points are: • Upfront costs are spread forward into the AMC.
• There is a level charging structure throughout the policy making them highly flexible to change. For life companies to recoup upfront costs they must maintain a high persistency rate, but this is simply not happening. Exit charges on clients and clawback of commissions to Brokers are an attempt to manage this but the business model is still highly challenged. Let’s be clear about one thing — life companies set their pricing structures and Brokers simply respond to this, giving best value to their customer. Sometimes companies update and reprice their contracts and don’t give the better terms to
existing clients. If there is no cost of change, the Broker must rebroke the contract to give the better value to the client — or a competitor will. Financial Brokers will be tempted to say that life companies created their bed and they should lie in it. However we should learn from the mortgage market and lead, not follow, this debate. The inevitable outcome of the broken model will be a return to some form of upfront pricing, albeit with reasonable charges and avoiding the inflexibility of initial unit style charging. In simple terms there will be a clear and transparent charge to the customer for setting up the policy. It will require a lot of change in current industry practices to achieve this change. The life companies will be the major beneficiaries of this and must therefore be prepared to undertake the necessary investment in the Financial Broker market to ensure Brokers can successfully change to a new model. I would like to thank all PIBA members for their support during 2012 and I wish you and your families a happy and peaceful Christmas.
Zurich Insurance plc is regulated by the Central Bank of Ireland. Winter 2012 5
Industry Round-Up Zurich reaches its €100k fundraising target for the Jack and Jill Foundation 18 months ahead of schedule Zurich Insurance employees raised €100,000 for the Jack and Jill Foundation in just 18 months. To celebrate this tremendous achievement the company hosted a special festival event which was also attended by Jack and Jill CEO Jonathan Irwin and former Dublin GAA star and supporter of the charity, John O’Leary. Jack and Jill was chosen by employees as Zurich’s main charity partner because of the great support it provides in the form of home nursing care to families with sick children. Maurice Cullen, Chief Marketing Officer, Zurich Insurance said, “The commitment shown by our employees to the Jack and Jill Foundation over the last 18 months has been fantastic. We originally set a fundraising target of €100k that we’d hoped to achieve within three years and the fact that we have reached this goal within 18 months is testament to the huge efforts made by our entire team across a range of fundraising initiatives including sponsored runs, stair climbs, raffles, dress down days, cake sales and office Olympic challenges.” Speaking at the event, Jonathan Irwin also thanked Zurich employees for their fantastic achievement to date: “€100,000 allows us to nurse 300 babies for one month, so every year
the Jack and Jill Foundation has to raise funding of up to €3 million. We also act as an advocate for our families, ensuring they receive the support and services they are entitled to. The fantastic fundraising efforts of the entire Zurich team will make a huge difference to the work we do, allowing us to continue to support our Jack and Jill families to ensure they can spend quality time at home together.”
Standard Life Financial Confidence Index edges lower In Standard Life’s most recent quarterly survey of more than 1,000 adults, the overall index fell 0.6% over the last quarter from 51.2 to 50.6. The index hit an all time high of 66.7 in March 2008, and is currently hovering just above its all time low of 50.5 set 12 months ago. The index measures how financially secure people feel out of a total possible score of 100. The least financially confident age group is 35 to 44 year olds, scoring just 45.9 of a possible 100. “This age group is probably the most financially pressurised with significant mortgage repayments, childcare costs, and education expenses”, said Brendan Barr, Head of Marketing at Standard Life. “People’s financial confidence levels are down again probably due to worry about the
impact of the upcoming Budget with significant speculation about cuts in children’s allowances and higher property taxes.” added Barr. People aged 65+ continue to be the most financially confident, scoring 58. However they experienced a sizeable drop over the quarter from 59.6. The largest drop in confidence levels over the quarter was the 25 to 34 year olds whose confidence levels fell almost six points from 54.9 to 49.1. Men continue to be more financially confident at 51.6 with women’s financial confidence at 49.7. However the gap continues to narrow with women’s confidence falling less than men’s in the last quarter. Dublin remains the most confident region, scoring 54.4 (up 1.7 over the quarter). All other regions decreased: Connaught/Ulster 50.6 (down 0.4) Rest of Leinster 48.5 (down 2.0) and Munster 48.7 (down 1.8).
60% place significant value on independent financial advice When asked how important independent financial advice is when it comes to making a major financial decision, 39% believe it’s important whilst a further 21% believe it’s very important. Only 13% of people believe independent financial advice is not important.
Caledonian Life — Helping to put a Smile back on your face …
Standard Life Investments wins Investment Manager of the Year
Caledonian Life appoint new Managing Director
Over the last 12 months, Caledonian Life have been doing their very best to try and give you and your clients a little something to smile about. “We know it’s a very challenging environment and can be tough out there, but we hope that this year our revamped product range, price-matching initiatives and new commission offerings have helped you and your business throughout 2012.” Now with the backing of our financially strong and stable parent company, Royal London, the UK’s largest mutual life and pensions company, we’re again looking to end the year as we began it — supporting and assisting you, our Financial Broker partners. Some further new improvements to their product range include:
Global fund manager Standard Life Investments collected the Investment Manager of the Year award at the Irish Pensions Awards 2012 in Dublin on the 21st of November. Key factors highlighted for their win included:
Jon Glen has been appointed Managing Director of Caledonian Life. He has stepped into the role following Hugh McKee’s promotion to Chief Executive for Royal London Intermediary Business. For a full interview with Jon turn to page 18.
• Up to 200% Commission for Indexed policies • Indexed policies can now be price-matched against the cheapest level premium available in the market * • More affordable indexation rates in the current economic climate • Conversion Option for Stand-alone Specified Serious Illness • Extended terms for Convertible Term Assurance and Pension Term Assurance. * Price-match for indexed policies is against the cheapest level premium (as displayed on Best Advice, Adviser Plus or Money Advice) and applies for the first year, after which the premium will increase by 4% per annum. Price-match only applies to applications submitted via eSP and is subject to sum assured limits and Caledonian Life’s minimum premium. Price-match does not apply to annual premium policies and can be withdrawn at any time. The final pricematch will be based on the premium applicable on the date of policy issue and applies only to the ordinary rates premium. The price-match premium will be used as the base rate where a rating applies.
• global resources and local presence • stable performance in challenging times • ability to meet clients’ challenges • commitment to building long-term relationships • innovative approach in the Defined Contribution arena. Standard Life Investments was also shortlisted for the award for Innovation, on the basis of its flagship absolute returns investment strategy, which has returned 8.2% annualised since launch, with volatility of just 6.0%.1 The Standard Life Ireland staff pension scheme also won Best Defined Benefit Pension Scheme of the Year. This win comes hot on the heels of being ranked first for most consistent investment performance by Financial Brokers in Ireland in PIBA’s Excellence Survey 2012. Source SLI, gross performance from 12/06/2006 to 30/06/2012
JP Hughes appointed CCO, Friends First
JP Hughes has been appointed to the role of Chief Commercial Officer at Friends First. He has assumed responsibility for all sales and marketing activities as well as product development and product management. Other key new appointments to the Commercial team include: Shane Quinn, formerly Regional Sales Manager East, who has been appointed Commercial Distribution Director with direct responsibility for the Friends First team of Account Executives nationally. John Corr, formerly Regional Sales Manager West, who has been appointed Commercial Transition Director with responsibility for managing the change programme in the new Commercial Division.
Lavinia Morris, Friends First, receiving her award from Martin Whelan (Director of Standards at NSAI) and David Kerr (Chairman of the Board of the IIA)
Friends First Celebrate Award Win
Conor Brennan, Director of Broker Distribution Zurich, and his team celebrating the €100k achievement. (l-r) Lorcan Harding, Conor Brennan, Paul Kane and Liam Duggan.
6 Issue 39 36
Ken Norgrove, CEO Zurich Insurance, proudly presents the €100,000 cheque to Jonathan Irwin and John O’Leary
Friends First are delighted to announce that Lavinia Morris, Senior IT Manager has won an IIA NetVisionary Award for her work with the NSAI (National Standards Authority of Ireland) in the development of the first National Standard for Cloud Computing here in Ireland. She was also shortlisted in the Top Six out of 150 for the WMB Woman in Technology of the Year Award for 2012 for her work in technology at Friends First and her contribution to the Cloud Computing industry over the past year. Lavinia is responsible for aligning and driving the Friends First Group’s IT strategy. She has also worked for Fujitsu and AIB, and has a degree in electronic engineering from NUI Galway. She is currently chair of the Irish Internet Association’s Working Group on Cloud Computing.
Winter Spring 2012 7
Wishing all our Brokers and customers a very Merry Christmas and a Happy New Year.
Budget 2013 – Pension Changes Government pension policy, as stated by the Minister for Finance:
tony gilhawley Technical Guidance Ltd.
• using the net AVC funds to pay off part of a tracker mortgage may make little financial sense, unless the individual is under severe pressure.
“The pensions sector is a very important part of the financial services industry in Ireland and provides a service to enable people to make provision for their retirement and for their old age. As it is in everyone’s best interest the Government wishes to encourage as many citizens as possible to continue to invest in pension schemes.
• if the individual hopes to use the Personal Insolvency regime, they might be better off not touching their AVCs now; creditors can’t touch AVCs in trust schemes. Once money is taken out of AVCs, creditors can get at the funds.
However, some people have been allowed by previous Governments to benefit from hugely generous pension arrangements subsidised by the taxpayer. While this Government wants to encourage those on lower and middle incomes to save for pensions, it will not allow pensions of the scale previously allowed to be accumulated at the expense of taxpayers whose actual earnings are, in many cases, a fraction of those large pensions.”
While it is clear that no change to the current €2.3m Standard Fund Threshold regime will apply in 2013, it’s less clear what will replace it in 2014.
The main relevant changes announced in Budget 2013 are as follows:
No change in marginal rate pension tax relief Clients should maximise their pension funding potential in 2012 and 2013, to benefit from marginal rate income tax relief.
Commitment to not extend pension levy beyond 2014 The Minister for Finance gave this commitment re the pension levy: “The Pension Levy announced as part of the Jobs Initiative will not be renewed after 2014.”
No change in Standard Fund Threshold for 2013; proposed €60,000 pension limit in 2014
The Minister for Finance stated: “The current arrangements governing the maximum allowable pension fund at retirement for tax purposes of €2.3 million still allow for very generous pensions for higher earners through taxsubsidised sources, particularly by way of Defined Benefit schemes in both the public and private sectors. Therefore, the necessary arrangements to give effect to the Programme for Government commitment to effectively cap taxpayers’ subsidies for pension schemes that deliver income of more than €60,000 per annum will be put in place in 2014. Consultation on the specific changes required to the existing regime will continue with, among others, the pensions sector and the Departments of Public Expenditure and Reform and Social Protection.”
Early access to AVCs A scheme is being introduced to allow individuals of any age to make a ‘once off’ withdrawal of up to 30% of the value of their AVCs, without having to retire. The withdrawal will be subject to marginal rate tax, but it’s not clear yet whether it will also be subject to PRSI and USC. The withdrawal option will be available for three years from the passing of the Finance Bill 2013, possibly the end of March 2013 to March 2016. While this scheme may suit some financially distressed individuals, it will not suit everyone for a number of reasons:
Friends First would like to thank all of you for your business and support in 2012. We wish you and yours a Merry Christmas and a Happy New Year.
It seems like the current Fund limit system may change to a pension limit system, but how this might work for individuals with DC funds is anyone’s guess, i.e. would DC funds be converted to equivalent pension at 20:1 or other such factor? A 20:1 factor that applies to value defined benefit pensions at present would give a DC fund limit of €1.38m if the convention of valuing the public sector tax free lump at three times pension is maintained, i.e. 20+3=23 x €60K = €1.38m.
• it is only available to employees with AVCs; it is therefore not applicable to the self employed or company directors, most of whom don’t hold AVCs. • part or all of an individual’s AVCs may be tax free at retirement; by taking them now the individual pays tax at the marginal rate on funds that might be tax free if held at retirement.
Investments Winter 2012 9
Friends First Life Assurance Co. Ltd. is regulated by the Central Bank of Ireland.
gary connolly Principal iCubed
“To your clients that commit lump sums to the stock market, every one of them is pre-disposed to undermining their return through their own actions.”
10 Issue 39
“We have met the enemy, and he is us”
2013 – Plan to find More New Clients
This is a quote attributed to Pogo, a comic strip character created by American cartoonist Walter Kelly. Pogo may well have been referring to investors, who it would seem are their own worst enemies when it comes to making investment decisions. Every year a company called DALBAR produces a report observing investor behaviour, and quantifies the extent to which investors help or hinder their returns by their own behaviour. The report makes for uncomfortable reading. The average stock market investor over the twenty years to the end of 2011 earned a return of 3.5% versus the average fund return of 7.8%. Less than 50%! Are you leaving more than half the stock market’s return on the table? People make poor investment decisions because they are human. We all come with mental software that tends to encourage us to buy after results have been good and to sell after results have been poor. This is exactly the opposite of what we are told to do, i.e. buy low and sell high. This can be seen clearly in the analysis of time-weighted versus money-weighted returns for funds. The time-weighted return, which is what is typically reported, is simply the return for the fund over time. The money-weighted return calculates the return on each of the Euros invested. These two calculations can yield very different results for the same fund. Say, for example, a fund starts with €100 and goes up 20% in year one. The next year, it loses 10% (-€12). So the €100 invested at the beginning is worth €108 after two years and the time-weighted return is 3.9% p.a. Now let’s say we start with the same €100 and first year results of 20%. Investors see this very good result, and pour an additional €200 into the fund. Now it is running €320: the original €120 plus the €200 invested. The fund then goes down 10%, causing €32 of losses. So the fund will still have the same time-weighted return, 3.9%. But now the fund will be worth €288, which means that in the aggregate, investors put in €300 — the original €100 plus €200 after year one — and lost €12. So the fund has positive time-weighted returns but negative money-weighted returns. Investors’ proclivity for buying high and selling low means that investors earn, on average, a money-weighted return that is less than 50% of the market’s return (as per above). The results of our decisions with respect to timing are simply appalling. The DALBAR study also identified something even more startling. An investor committing money on a regular basis to the stock market fared even worse than the lump sum investor, with a return of just 3.2%. Cost averaging has been a central tenet of good investment advice since time immemorial. So what are we to make of this? A post on the Nerd’s Eye View investment blog run by Michael Kitces argues that the DALBAR study overstates the behaviour gap.
At this time of year, the thoughts of many Brokers have moved to trying to get a fast start to the New Year. Central to this is a welldeveloped marketing plan that will bring structure to your efforts. Assuming you’ve limited resources available, here a few areas that you should consider to both maximise your chances of success and reduce wasted time and effort.
Kitces provides two examples of ten-year investments to illustrate the point. Suppose the stock market doubled in year one and then stayed flat for nine years. Over the ten-year period, the market return is 7.2% p.a. If an investor invested €1,000 every year in an index fund that exactly matched the market, the investor would have €11,000 at the end of ten years. As a result, the investor’s money-weighted return is only 1.7% a year for ten years. The big difference between the market’s 7.2% per year return and the investor’s 1.7% per year money-weighted return isn’t caused by any performance chasing or bad market timing. Now suppose the stock market stayed flat for nine years and then doubled in year ten. Over the ten-year period, the market return is still 7.2% a year. If an investor invested €1,000 every year in an index fund that exactly matched the market, this investor would have €20,000 at the end of ten years, resulting in a money-weighted return of 12.3% a year for ten years. It’s higher than the market return because in the year when the market return was high, the investor had €10,000 invested versus only €1,000 invested in the previous example. So, depending on whether the market had higher returns at the beginning or at the end, “investors are seen either as dumb or smart even when they made no effort to time the market.” This is exactly what happened lately, according to Kitces. Market returns over the last twenty years have been more like the first example above than the second. Kitces’ analysis still doesn’t fully explain the results, as not all investors are committing money regularly to the market. For you as an investment adviser, there are a number of important implications of this report. Patterns of stock market returns are important to the regular investor. Investment strategy cannot be simply ignored if an investor is committing money on a regular basis. Are you reviewing this regularly? To your clients that commit lump sums to the stock market, every one of them is pre-disposed to undermining their return through their own actions. Emotions, like hair growth or your heartbeat, can’t be controlled. And fixing this is beyond the abilities of any one person, firm, or Lord knows, 800 word article. At a very minimum, educate yourself and your clients about these issues. Have a proper plan for investing. And start the communication process now with a newsletter using the contents of this article.
Gary Connolly is principal of iCubed, an investment training, research and consulting firm www.icubed.ie. He can be contacted at email@example.com.
Develop a plan eamonn twomey
The first critical step is to actually develop a plan for the year to ensure your marketing activities are structured and planned for the whole year. Develop a plan that is achievable for your business and capture it on only one or two pages in a way that makes it easy to track and to review frequently.
Tidy up your current marketing supports We all go through bursts of activity from time to time and, for example, do a complete overhaul of our website content. However this has to become an ongoing process. There’s nothing worse than going to a website and seeing that the most recent “Latest News” item or Newsletter is from a few years ago, and indeed time sensitive information such as Social Welfare rates etc. that are years old. Most prospective clients won’t contact you without checking out your website first. They will want an adviser who has their finger on the pulse. Out of date information will give them the opposite perception of your business and will potentially send them elsewhere.
Build the Foundations All good plans are built on a foundation of solid research. This is especially true for the competitive world of the Financial Broker. You need to understand the environment that you’re operating in and the impacts that this external world has on your Brokerage. You then need to identify the particular attributes of your business – what are the particular opportunities that are open to you or indeed the gaps that you need to close? Finally you need to get clear on who are the target customers you want to reach through your marketing plan.
Develop your Market Positioning Your positioning is how you’re going to stand out from the crowd; that is, differentiating yourself from other Brokers. It’s no accident that the more effort you’ve put into the research, the easier this piece becomes. In fact if your research phase is very strong, your market positioning will often just fall out of it! This then sets the theme for the marketing plan and will guide you as you move towards delivery of the plan.
Know your target markets I mentioned target markets earlier. You need to know who it is that you’re trying to reach with your marketing and sales campaigns. Is it individuals in a certain geographical area or is it business owners? Is it a particular occupation or a particular segment of your existing clients? Knowing your audience will shape the activities that you choose, as different activities are more likely to succeed in grabbing the attention of different target markets.
Knowing your target groups will also help you engage people much better through your communications. You’ve got to find a way to stand out from the crowd, perhaps as an expert in a particular area or as the ‘go to’ person when your target market is seeking out opinions or expert writing in relation to financial services. Build this position as a thought leader in their minds and they are more likely to come to you for your financial advice too.
Get Crystal Clear on your Objectives Are you trying to grow the brand of your Brokerage, are you trying to get new customers? Or is it all about hanging on to and developing your existing customer base? Are you looking to build a solid base of business introducers such as accountants? Until you get absolutely clear on where you’re trying to go, it’s impossible to know how best to get there. Focus on identifying the most important objectives for your Brokerage and then pick the right set of activities to achieve the objectives. In my business, in which I help Brokers with their planning and their marketing activities, this is the area where people fall down most frequently. Time spent here will save you a lot of frustration and wasted time and money down the road.
Make sure you’ve the Capacity to Deliver and Regularly Review the Plan A plan is not just a wish list of all the things you’d like to do. A plan needs to be achievable; and to make a marketing plan achievable, first of all it needs to be written down. The plan then needs to clearly identify how much money it will take to deliver and either who in your organisation will deliver it or how much it will cost to have the activities delivered externally. If need be, you then make choices to fit your budget. Now you have activities that you’re confident can be delivered. Then put dates and measures against each activity too. Yes, it can be difficult to link every marketing activity directly to sales – how do you know how much of your sales came from the monthly column you write in your local newspaper? However every single marketing activity is measurable in some form or another so a target should be set for each activity. With the explosion of online marketing activities, there is now a fantastic range of metrics available to you to help you measure the success or otherwise of your activities. These are just a few thoughts to help guide your marketing planning in 2013. Best of luck!
StepChange assists financial advisors in the development and delivery of their business growth and marketing plans. www.stepchange.ie
Winter 2012 11
A Step too far?
elizabeth smith wright Compliance Manager PIBA
“PIBA will strongly oppose both of these proposals”
There is no doubt that 2012 has been a very busy year in the world of compliance and legislation, with the implementation of the revised Consumer Protection Code, Fitness & Probity Standards, compliance with the new Minimum Competency Code and completion of the switchover to an online annual return system. Many members have also gone through the mortgage renewal process which, as many members will attest, is not an easy process - the good news being that mortgage authorisations are now issued for a ten-year period. PIBA has highlighted the issues with the mortgage re-authorisation regime to the Central Bank and will continue to liaise with them on the delays members are experiencing. Under the Central Bank’s PRISM (Probability Risk and Impact System Model) retail intermediaries are considered low impact firms. PRISM is the Central Bank’s risk-based framework for the supervision of regulated firms. It is PIBA’s long held view that regulation must be proportionate to the level of risk posed to consumers. Unfortunately this does not seem to be reflected in the raft of requirements now applying wholesale across banking institutions, product providers and intermediaries alike. In this regard it is interesting to note that at a recent conference held in Dublin on public sector reform Professor John Seddon, a British expert on regulating public services, said: “The greatest lesson from UK public sector reform has been the damage caused by ill-conceived regulation; intended to make services better, it actually made services worse.” Given that the Central Bank’s focus is consumer protection, it is worth noting that in the Financial Services Ombudsman’s annual and bi-annual reports only a small percentage of complaints relative to total complaints received are in respect of intermediaries. In the 2011 Financial Services Ombudsman’s Annual Report just 4% of total complaints received were in respect of intermediaries. This is clearly testament to the much valued service Financial Brokers provide for consumers. The Central Bank published its Strategic Plan 2013 -2015 on Tuesday the 20th of November. It indicated that the key priorities for 2013 in respect of the over 3,400 intermediaries that the Central Bank currently supervises include: • Targeted themed reviews of key consumer and prudential risk areas • Dealing with emerging risks in each sector • Developing a regulatory framework for each sector • Conducting a series of themed reviews/inspections • Prudential monitoring via online returns • Revising the Handbook of Prudential Requirements for Authorised Advisors and Restricted Intermediaries • Conducting a number of regional road shows for retail intermediaries. On the same day, the Central Bank also launched a consultation in relation to the industry funding levy. It proposes that there will be a single levy rate per impact
12 Issue 38
Aviva Health Service Launch –
How to Win Health Business in the B2B Sector
eoin o’neill Sales Director Aviva Health Insurance
category within each industry category. Under the proposals, all intermediaries, regardless of turnover, would be obliged to pay a flat fee of €847. The Central Bank is also proposing to introduce an application fee of €2,000 for firms seeking authorisation to provide financial services. This is intended to reflect the average cost involved in processing applications. PIBA will strongly oppose both of these proposals and will be making a submission to the Central Bank before the deadline of the 22nd of February 2013. We firmly believe that the use of annual turnover continues to be the most appropriate and fair basis upon which annual levies should be based. This income based model was accepted by the industry in 2004 and it has worked well so we believe it would be regressive to move to a flat fee model at this stage. The proposal of the introduction of an application fee is very worrying for the industry and will no doubt have an impact on new entrants to the Broker industry. A shrinking of the Broker market is clearly not in the best interests of consumers as Brokers hold a unique position within the market of providing independent unbiased advice to consumers. Given these proposals, 2013 is shaping up to be another busy year for PIBA; members can be assured that PIBA will lobby against both the move to an annual flat fee for intermediaries and an application processing fee. We will also continue to assist and provide guidance to our members on how to comply with the various requirements currently in place.
Our Broker partners are one of our most important routes to market for our health insurance products. Over recent times, there has been extensive media coverage of the dynamics of the health insurance market, the public health system and ongoing Government debate around Universal Health Insurance. Consumers and companies are increasingly turning to Brokers for help and advice. As a result, a large number of our Brokers have seen an increase in queries from both consumers and SME companies looking for guidance with their health insurance plans. In fact, a Broker who has seen a significant increase in call volumes in recent months is Patrick Brennan of Irish Health Insurance. Patrick said “We have seen an increase in the number of people coming through our door or contacting us by phone to seek advice about their health insurance cover. These customers aren’t just looking for a price saving, they are trying to understand their options and most importantly what is the best cover for their personal or company needs. Thankfully, as an independent Broker, we are able to help.” This increased demand for Broker advice, in addition to the feedback we receive from our Broker partners and our commitment to support them, has resulted in the development of a number of support guides, including Health Insurance Made Simple, Intermediary Guide to Retention and our most recent addition How to win Health Business in the B2B Sector. Whether you are a seasoned professional at winning B2B health insurance business or completely new to B2B health insurance selling the How to win Health Business in the B2B Sector guide will have something for you. In the 22-page guide you can find all you need to know about selling health insurance to SME and corporate customers, the key reasons why companies offer health insurance to their employees, the key drivers for corporate decision makers and the sales process itself. Your How to win Health Business in the B2B Sector guide provides you with the tools you need to start this process for your Brokerage, including a sample company introduction letter and sample questions to aid you on your fact find process. In addition to this guide, our Aviva Health Business Development Managers are available to support you with the development of your health insurance business for SME and corporate customers. We are sure you will find the How to win Health Business in the B2B Sector guide a benefit to your health insurance business going forward. Helena Hennelly of Hennelly Financial Services commented “As with all Aviva Health’s Broker support guides, How to win Health Business in the B2B Sector has really given my sales team some food for thought as to what is best practice as well as a focus on how to target this market going forward”.
Some key elements of the guide include: • The opportunities within the SME and corporate market in Ireland • Why companies offer health insurance to employees, including health cover, employee wellness and the Employee Assistance Programme (EAP) • Building your pipeline: networking, asking for referrals, making appointments by phone, writing to prospects and social media • Some insights on corporate decision makers within companies • The steps in the SME/corporate process from identifying the prospect to closing the sale • The sales process from start to finish for company paid, salary deduction and affinity schemes • How group schemes are set up including member and scheme loaders • How your Aviva Health Business Development Manager can help you achieve your goals in this market.
In addition to all the above there are sample direct mail letters and a question bank for B2B selling. We would like to take this opportunity to thank our Broker partners for their ongoing support and we look forward to a good finish to 2012 and a prosperous start to 2013. For a copy of How to win Health Business in the B2B Sector or any of other Aviva Health Broker guides call your BDM. How to Win Business in the B2B Sector
How to Win Business in the B2B Sector
Winter 2012 13
GARS demonstrates Investment Strength and Expertise at Standard Life Investments
AT GUY STERN’S GARS PRESENTATION
Standard Life Investments is a leading global asset manager, employing more than 1,000 talented professionals. They have a presence in a number of locations around the world including Boston, Hong Kong, Paris, London, Beijing, Montreal, Sydney, Dublin and Seoul. They manage €194.7 billion^ on behalf of clients worldwide, with investment capabilities spanning equities, bonds, real estate, private equity, multi-asset solutions, fund-of-funds and absolute return strategies. The Global Absolute Returns Strategies Fund is managed by the Multi Asset Investing Team at Standard Life Investments and this fund incorporates the best investment ideas across the entire team.
Nigel Dunne (Standard Life Ireand)
Guy Stern (Head of Multi-Asset Investment Team, Standard Life Investments)
^ Source: Standard Life Investments as at 30 June 2012.
Synergy Global Absolute Return Strategies (GARS) Fund Our top selling Synergy GARS fund recently celebrated its fourth anniversary and has returned an impressive 37.3%* since it was launched on the 8th of September 2008. That works out at 8.0% per annum. Over €1.5 billion** of retail and institutional money is invested in GARS in Ireland. * Source: MoneyMate, bid to bid, gross income reinvested, 8 September 2008 to 1 November 2012. ** Source: Standard Life Investments as at 1 November 2012.
The Synergy GARS fund is ideal for investors looking for competitive returns but with less of the volatility associated with stock market investment. The performance target is cash*** plus 5% per annum (gross of charges) over rolling three year periods. Bear in mind that it is not a substitute for cash or deposits. *** As measured by the six month European Interbank Offer Rate
The graph below shows how a deposit invested on a lump sum basis would have performed against the Synergy GARS fund since September 2008.
GARS is managed by the Multi-Asset Investment team, with over 20 experienced investment professionals, and is headed by Euan Munro. He has 20 years’ industry experience and has been with Standard Life Investments for 16 years. To mark the fund’s fourth anniversary, Guy Stern, Head of the Multi-Asset Investment team, gave an update on the fund’s performance and strategies in Dublin and Cork. The presentations were very well attended and advisers found it beneficial to get an update from the head of the MultiAsset Investment team.
Some quotes from Financial Advisers who attended the GARS presentation with Guy Stern:
Guy Stern (Head of Multi-Asset Investment Team, Standard Life Investments) addressing a full house at the Conrad Hotel
“Attending this presentation gave me a greater understanding of the thought process behind GARS and other absolute return funds and an appreciation of where Standard Life is at in the market place” “I now have a more informed understanding of how the product is structured and this will no doubt assist me in discussing the features and mechanics of the product with existing and new clients.”
Jim Connolly (Standard Life) addresses the crowd
This fund is not guaranteed, not a capital protected product and not a substitute for cash or deposits. In order to achieve its investment objective the fund will make extensive use of derivatives. For more information, please see the Synergy Global Absolute Return Strategies Fund brochure (GARSF). Past performance is not a reliable guide to future performance. The value of this investment may go down as well as up and may This illustration shows the gain on investment into a deposit at 4% and Synergy GARS from 8 September 2008 to 8 September 2012. Synergy GARS fund value is calculated bid to bid with gross income reinvested and assumes the fund is accessed through Synergy Investment Bond with initial commission of 3% and 0.25% fund based renewal commission applied. No taxes or early encashment charges are applied. The deposit value assumes a fixed rate of 4% p.a. applied at maturity. Deposit interest retention tax is not applied.
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also be affected by changes in currency exchange rates. The period of performance shown does not reflect the longer term nature of investments.
Winter 2012 15
QROPS – Bringing it Home
PIBA Winter CPD Bootcamp 2012
November 29th Athlone | December 3rd Cork | December 6th Dublin
UK Transfers into Irish based pension schemes are providing potential new avenues of business opportunity for Irish Brokers
ian tracy Product Marketing Executive Aviva Life & Pensions Ireland Limited
Many Irish people have spent some time in their careers working in the United Kingdom and may have built up retirement funds within the UK pension system. A lot of them may have no awareness of, or control over, their rights under these schemes, so transferring the scheme to Ireland may be of considerable advantage. In times of economic uncertainty, it is important to know that you are in control of your own assets, especially if you have a pension in a foreign country. A Qualifying Recognised Overseas Pension Scheme (QROPS) allows customers to transfer their pension from the UK and choose where and how their money is invested. A QROPS is a pension scheme that an individual may wish to establish in a jurisdiction with favourable pension rules.
Keeping Control The main principle underlining QROPS pensions is that your customers’ money belongs to them and they keep full control over it. Unlike in the UK, where an annuity is required to be purchased at retirement, those who transfer to Ireland have the attractive choice of taking a tax-free lump sum and investing the balance in an Approved Retirement Fund (ARF) subject to certain terms and conditions (see below). The ARF option means the customer doesn’t have to buy an annuity, can take income/ encashments when they wish and can leave the money to their dependants, subject to Revenue requirements. QROPS is also important to the pre-retirement market, with many people choosing to transfer into a Buy Out Bond or PRSA.
The Opportunity For Brokers According to New Dawn Consultancy & Research, the QROPS market generated fees and commissions of more than £72m (€90m) for Independent Financial Advisers worldwide in 2011. Their research also added that the QROPS market is expected to grow at 35% to 45% annually until 2015.1 These large growth percentages are attributed to increased longevity, the demise of the defined benefit pension scheme and growing expatriation from the UK. However, QROPS are not tax-avoidance schemes! The customers’ monies will be fully subject to the tax regime of the country into which they are transferred. The Irish non-requirement to purchase an annuity means that customers can benefit from drawing down a lump sum without having to purchase an income bearing product that they do not want. However, other issues such as Irish Inheritance Tax and the temporary Pension Fund Levy should be borne in mind when giving advice.
Irish Revenue and Transfer The Revenue Commissioners will allow transfers into an Irish pension arrangement from overseas provided: (a) the individual is tax resident in Ireland (b) the foreign scheme/policy facilitates the transfer, and (c) the relevant Revenue authority in the host country approves the transfer. An individual will be regarded as resident in Ireland for a tax year if
16 Issue 39
s/he spends 183 days or more in the Republic of Ireland in that year, or if s/he spends at least 280 days in the Republic of Ireland over two tax years. (However, if the individual spends less than 30 days in the State in one of the years then this test will not apply to make her/him a resident.) UK investors must always remember that any Irish pension plan that they choose to transfer into must be on Her Majesty’s Revenue Commissioners (HMRC)’s approved list, published on their website, otherwise it could be subject to penalties.
HMRC Restrictions There are certain reporting requirements which the scheme administrator must comply with. Once the transfer has been made, the scheme administrator of the QROPS must report to HMRC details of certain events occurring if that individual was resident in the UK for tax purposes during the previous five years. The events include:
Jim Dowling, Paul Heeney (The Pension Shop Ltd.) Dermot Martin (Mortgage & Investment Brokers)
Bernadette Lynch (Irish Life)
John Shannon (John Shannon Insurance Brokers & Financial Services), Mary Moloney, Donald Moloney (D. Moloney Financial Services)
(a) The payment of benefits (tax-free lump sums, income payments and death benefits) (b) Onward transfer of the QROPS. As discussed above, ARFs may be attractive to people as a post retirement investment vehicle — but ARFs are not generally approved by HMRC for QROPS. So, a member would have to initially transfer into another Irish pension arrangement and then transfer onwards to an ARF. Such an onward transfer within five years of effecting Irish tax residency would lead to a reporting requirement as mentioned above, and could land the member with an unauthorised payment charge of 55% of the transfer value under current UK tax and QROPS rules. Because of this, it is important for customers to get advice before the transfer takes place and before taking benefits from the transferred plan.
Jim Connolly (Standard Life) addresses the crowd
Ronan O Neill (Zurich Life), Diarmuid Kelly (PIBA CEO) Liam Carberry (PIBA Chairman), Richard Temperley (Zurich Life)
The Transfer If customers have taken independent financial advice, and are happy that a transfer of funds to Ireland is in their best interests, then the transfer can be straightforward. For example, at Aviva, all of our individual pension arrangements are pre-registered with HMRC. So our requirements simply consist of the product application form and an instruction from the trustees/ policyholder to effect the UK transfer. It’s important to remember that the UK pension provider may have additional requirements and that these requirements may vary from company to company. In 2012, Aviva have handled numerous QROPS cases and our deposit and investment funds have proven popular with customers transferring in. Your Aviva Broker Consultant is available to help you find the best solution for any QROPS customer you may have. 1
Source: New Dawn Consultancy, June 2012
This article has been produced by Aviva Life & Pensions Ireland, and whilst great care has been taken to ensure the accuracy of the information it contains, the company cannot accept responsibility for its interpretation, nor does it provide legal or tax advice. This article is based on Aviva’s understanding of current law, tax and Revenue practice as at November 2012.
Denis Leahy, Paul Leahy (Leahy Investment Advisers) Sylvia Campion, Michael Kelly (Advocate Financial Services)
Pat Ryan (Canada Life)
Thomas Coyne (Thomas Coyne Insurances) Jim Hegarty , Frank Lynch (Hegarty Financial Management)
kindly sponsored by
Winter 2012 17
Thanks to Financial Brokers, Caledonian’s business grows by more than 300% Royal London Group, the UK’s largest mutual life and pensions company, recently announced its new business results for the nine months to the 30th of September 2012. Thanks to the many Financial Brokers who have been supporting them this year, out of all the businesses within the Royal London group, Caledonian Life posted the strongest year on year growth in new business sales. As a result of this phenomenal support from Financial Brokers, new business protection sales at Caledonian was up 382% on the same period last year. The Broker magazine recently met Caledonian Life’s newly appointed Managing Director Jon Glen in their offices on St Stephen’s Green to outline how Caledonian hopes to maintain their upward momentum in the Irish Financial Broker market. The Broker: Jon, nice to meet you. Could you tell us a little about yourself and your background? JG: Well I’m from Scotland and live just outside Edinburgh. I’m married to Louise and we have a three year old daughter, Ayla. Following the end of my full time education, I worked for a variety of multinationals outside of financial services, as both a Sales and Commercial Manager. I came to work for Royal London initially as a Consultant and then was delighted to be asked to join them full time as Commercial Director for their Protection companies, Bright Grey and Scottish Provident. Over the last six years, I’ve worked with a variety of different teams including Operations, Underwriting, IT, Finance and Actuarial. So I think, modestly, that I’ve got a decent grasp and understanding across a breadth of functions of what’s needed for a Life company to design, plan, implement and deliver superior offerings to our Financial Broker business partners. On another note, I’m a big rugby fan, but I’m not sure yet how much I’m looking forward to Ireland’s visit to Murrayfield in the New Year!
The Broker: Were you surprised by the strength of the new business figures? JG: To be honest, not really. Here’s why I say that: Caledonian has always been close to its supporting Financial Brokers, so when Royal London Group acquired the business in July 2011, the Irish management were pretty quick to outline the key
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elements required to enable us to rebuild its market share. Their view was simple: if we respond quickly and make these changes, Financial Brokers will support us, and they were right. Considering the challenging economic environment in Ireland, the business has performed remarkably strongly so far this year, with new business volumes up significantly on the corresponding period in 2011. New business for Q3 2012 was up a further 36% on Q3 2011.
The Broker: What were the key factors behind the growth in new business? JG: Caledonian has enjoyed substantially enhanced support from Financial Brokers in the Irish market over the last 12 months. That’s something, to mirror the theme of our marketing campaign, that makes us very happy indeed. The reasons for this increase in support are, to be honest, relatively simple. We listened to what Financial Brokers wanted in order to support us. We took these suggestions and feedback on board and along with our own internal ideas we delivered on a number of key areas — competitive offerings through price matching and enhanced and improved products along with greater choice and superior commission offerings. We honestly believe that this now allows us to provide one of the best offerings on the market for Financial Brokers and their clients. It’s something we will focus all our efforts on incrementally improving, with some further new improvements to our product range:
• Conversion Option for Stand-alone Specified Serious Illness • Extended terms for Convertible Term Assurance and Pension Term Assurance. I hope you’ll excuse the advertisement! But we are genuinely very happy that we continue to offer Financial Brokers the ‘best in class’ and will continue to do so.
The Broker: So, what developments have you in mind to ensure that you continue to grow? JG: We are very conscious of how challenging it is for Financial Brokers with so many of their clients under tremendous financial pressure. This impacts of course on their ability to make financial decisions, whether it’s to make an investment or to apply for protection. So we’ve sought to eliminate as many of the ‘objections’ as possible, by providing their clients with the cheapest premiums on the market, coupled with extremely comprehensive products and all backed up with a first rate dedicated and personal service. That level of support will continue and we are conscious that we will have to continue to increase our commitment and offerings to Financial Brokers if we expect an increase in business from them. Without giving too much away, this is something Financial Brokers can absolutely expect Cale to deliver upon in 2013. I know it’s a terrible cliché — but watch this space! The Broker: What can Royal London bring to the table? JG: Well, they are both a mutual and a company that does a significant amount of their business through Financial Brokers. So our focus as an organisation is totally on delivering superior value and performance in all that we do, for both these stakeholders — Financial Brokers and their clients. Furthermore, we’re not distracted by the demands of institutional investors or share price performance, as we are a mutual. We grow our business by increasing revenue and profitability by meeting the needs of our Financial Brokers and their clients. That’s totally imbedded in our culture and drives all that we do — it’s not every company in any sphere of business that can honestly say that.
We also understand that it is very important, particularly in the current environment, that your readers and their clients have total confidence in the companies they place their business with. The Royal London Group has been in operation since 1861, has €60bn in funds under management and has actually been increasing their turnover and profitability over the last number of years. So it has the requisite history, strength and expertise to meet this client ‘security’ requirement. You might think “of course he would say that”. But this was in fact independently validated by the ratings that the Group has achieved and indeed improved upon, over the last 12 months. • Standard and Poor’s ratings, September 2012 (counterparty credit rating) A• Moody’s ratings, August 2012 A2 • AKG (overall financial strength) ratings, B+ So we think the entry and continued backing, investment and support of Royal London to Caledonian Life and the Irish market is a real good news story.
The Broker: Well best of luck in the new job Jon and we look forward to hearing more from you and Cale in the very near future. JG: Many thanks. I’m genuinely delighted to be here. It’s my first role as an MD so I’m as you can imagine, both very committed to it and very excited about it. We have a really good, talented and hard working team in Cale, who are genuinely interested in helping Financial Brokers. We know it’s a mutually beneficial ‘quid pro quo’ — what’s good for Financial Brokers is good for us, and vice versa. I’m really looking forward to getting out to meet Financial Brokers and to see more of Ireland, which I already know well. In particular I’m looking forward to getting their ideas and feedback on what we do well, but also what we can improve upon. But you can also reach me in our Dublin office where I am based at (01) 429 3333 — I’d be delighted to hear from you!
• Up to 200% Commission for Indexed policies • Indexed policies can now be price-matched against the cheapest level premium available in the market • More affordable indexation rates in the current economic climate
Winter 2012 19
Supporting Your Business
PIBA and New Ireland Investment and Pensions Seminars PIBA in association with New Ireland ran a seminar series on October 9th, 10th and 11th in Dublin, Cork and Galway, respectively. The topics covered included: Protection, Pensions, Investments and Risk Profiling and Tax Planning. PIBA also presented the new financial risk assessment initiative that it has developed to Financial Brokers.
Paul Fitzpatrick (Marino Investments) Tommy Coyne (Thomas Coyne Insurances) Frank Darcy (Personal Advice Services)
Karl Keegan (KJK Life & Pensions ), Oliver Walsh (Walsh Pension and Financial Services Ltd) Liam O’Sullivan (O’Sullivan Tierney Financial Management Ltd)
Brian Farrell and Mohneesh Jindal (M2M Financial)
Diarmuid Kelly addresses the crowd in the Davenport Hotel
20 Issue 39
Julie McNamara and Lotte Lyne (MCN Associates)
James Skeehan (New Ireland) John Hogan (John Hogan & Associates)
Paul McCarville delivering a presentation on ‘A New Approach to Investment Risk’
Aideen Noonan and Kim Brennan (Liberty Asset Management)
Enda Kelly (Kelly Mortgage Financial Services) Colm MacIonraic (Colm MacIonraic)
Crona Brady (Grant Thornton), Diarmuid Kelly (PIBA CEO), Sasha Kerins (Grant Thornton)
Gavin Brennan (New Ireland), Rory Brazil (Brazil Financial Planning Ltd) John McEntee (McEntee Financial Services Ltd), Diarmuid Kelly (PIBA CEO)
Ray McNicholas (Ethical Financial) Alan Jones (Alan Jones Insurance Brokers)
Diarmuid Kelly (PIBA CEO), James Skeehan (New Ireland) Paul McCarville (Clarus Investment Solutions), Liam Carberry (PIBA Chairman)
Deirdre Sheils (Wealth Options) Aidan Wall (Aidan Wall Financial Services Ltd)
John O’Reilly (New Ireland) Tony Bunbury (Tony Long Financial Services)
Winter 2012 21
Budget 2013 – Ireland’s Sixth Successive Austerity Budget
sasha kerins Tax Director Grant Thornton
Michael Noonan and Brendan Howlin announced Ireland’s sixth austerity budget on Wednesday the 5th of December 2012 amidst the knowledge that Ireland needed to make a fiscal adjustment of €3.5 billion. As expected, neither the income tax nor corporate tax rate increased, with Minister Noonan reiterating Ireland’s commitment to the 12.5% corporation tax rate. This will be welcomed by the FDI sector, along with enhanced changes to the Research & Development tax credit regime. There were also new initiatives introduced for the growing aviation industry in Ireland, for property and investment funds, and for the film industry. There were no changes to personal tax rates, bands or credits; however the introduction of a property tax, the abolition of the €127 tax free PRSI weekly amount, and increases in the prices of alcohol and cigarettes will squeeze already pressed taxpayers.
The key points emanating from the Budget are as follows: crona brady Tax Manager Grant Thornton
Personal Tax / USC / PRSI
• The €127 weekly PRSI allowance has been abolished. The minimum annual PRSI contribution for self-employed earners will increase from €253 to €500. Both changes take effect from the 1st of January 2013. • From the 1st of January 2013 modified PRSI rate contributors will no longer be exempt from PRSI on trading, professional and unearned income. • Employees who earn €352 or less per week continue to have no liability to PRSI. • With effect from the 1st of January 2014, PAYE employees will be subject to PRSI on their unearned income including rental, investment, dividends and bank deposit interest income. • With effect from the 1st of January 2013 the standard rate of USC will apply to those aged 70 years of age and over, earning €60,000 and above. This change also applies to medical card holders earning over €60,000. • Maternity benefit will be taxable for all claimants with effect from the 1st of July 2013. • Top slicing relief will no longer be available from the 1st of January 2013 on ex-gratia lump sums in respect of termination and severance payments where the non-statutory payment is €200,000 or over. • The foreign earnings deduction has been extended to include employment related travel to certain African countries. • From the 1st of January 2013, charitable donations from all individual donors will be treated in the same manner, with the tax relief in all cases being repaid to the charity
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at a new blended rate of 31%. Charitable donations will no longer be included in the calculation of the high earners’ restriction. • The specified interest used in calculating the taxable benefit from preferential loans, other than home loans, has increased from 12.5% to 13.5% and for home loans has reduced from 5.0% to 4.0%.
Some initiatives introduced for the SME industry were as follows:
• The Employment and Investment Incentive (EIIS) has been extended from 2014 to 2020 subject to State Aid clearance. • The Film Tax Relief Scheme has been extended to 2020 and will move to a tax credit model in 2016. • The three-year exemption from corporation tax for start-up companies is being reformed to allow any unused credits be carried forward beyond the first three years of trading with some conditions attached. • The de minimis level at which the close company surcharge applies has been increased to €2,000 from €635. The aim is to reduce the administrative burden and assist in cash flow for SMEs. • In relation to R&D, the first €200,000 of qualifying expenditure will benefit from the 25% R&D tax credit on a volume basis, with no requirement to refer to the 2003 base year spend. This is an increase of €100,000. For R&D expenditure in excess of €200,000 the relief continues to be based on incremental costs in excess of the 2003 spend.
Other measures included:
• With effect from January 2013, the existing 15% rebate of statutory redundancy payments that a company can claim is being removed.
into effect from the 1st of July 2013, with a half year charge applying for 2013. Aside from some exemptions, owners of residential properties, including rental properties, will be liable to pay the LPT which will apply on a self-assessed basis. Individuals can self-assess the value of their property or follow Revenue’s guidance on this process. The initial valuation (which must be carried out on the 1st of May 2013) is valid up to the 31st of December 2016. For the first 18 months (up to the 31st of December 2014), the national central rate of LPT will be 0.18% of the first €1 million of value with 0.25% applying to the excess. From the 1st of January 2015, local authorities will have the discretion to vary the rates by +/- 15%. The market value of the property will be divided into bands with the initial band covering €0 - €100,000. Thereafter bands of €50,000 width will apply up to €1 million. The tax liability will be calculated by applying the tax rate to the mid-point of the band. No band will apply where houses are valued at over €1 million (0.18% on the first €1 million and 0.25% thereafter). Newly constructed but unsold residential property, mobile homes, vessels, houses in certain unfinished estates and unoccupied principal residences by reason of long term mental illness or infirmity will be exempt from the LPT. There will also be an exemption until the end of 2016 for new and previously unused properties that are purchased between the 1st of January 2013 and the 31st of December 2016. The exemption will also apply to second hand property purchased by a first time buyer in 2013. The LPT is expected to yield €250 million in 2013 and €500 million for a full year charge. The household charge will cease from the 1st of January 2013 and the NPPR charge will cease from the 1st of January 2014. However, any unpaid arrears along with any interest and penalties on NPPR and the household charge that have accrued will remain a charge on the related property.
• An accelerated capital allowances scheme, over seven years, will be introduced for aviation specific facilities. This will serve to further bolster Ireland’s status as a leading player in the aviation sector.
Local property tax The much discussed Local Property Tax (LPT), which will be administered by the Revenue Commissioners, will come
• The exemption from CGT on real property bought between now and the end of 2013 if held for at least seven years was reaffirmed. • To enable farm restructuring, relief from CGT will be available where the proceeds of a sale of farm land are reinvested for the same purpose. The sale and purchase of the farm land must occur within 24 months of each other and the initial sale or purchase transaction must occur within the period commencing on the 1st of January 2013 and ending on the 31st of December 2015.
Real Estate Investment Trusts (REITs) Real Estate Investment Trusts (REITs) are to be introduced. A REIT is an established, internationally recognised model for property investment. REITs are listed companies, used to hold rental property, which provide a return for investors similar to that of direct investment in property. Qualifying income and gains of a REIT will be exempt from corporation tax at the level of the REIT company. Instead, the REIT is required to distribute profits annually, for taxation at investor level. Full details of the measure will be contained in the Finance Bill and will include features to maintain taxing rights in the State over Irish immoveable property.
• Ireland has reached agreement with the US in respect of compliance with FATCA, (Foreign Account Tax Compliance Act), which broadly seeks to facilitate the reporting of Irish accounts held by US persons, and the reciprocal exchange of information regarding US financial accounts held by Irish residents. This will be of particular interest to the financial services community.
• The current tax-free thresholds are being reduced by 10% for any gifts/ inheritances received on or after the 6th of December 2012. The current Group A tax-free threshold is being reduced from €250,000 to €225,000, the Group B tax-free threshold is being reduced from €33,500 to €30,150 and the Group C tax-free threshold is being reduced from €16,750 to €15,075.
One question to ask with regard to the above is will there be more spending cuts and tax increases? The main objective of the Budget was to ensure Ireland remained on track but to avoid damaging the prospect of economic recovery. While the true impact of the Budget will be felt from the 1st of January 2013, we now have a good idea of what to expect in 2013 and 2014. While there may be further smaller budget adjustments, it is hoped that Budget 2013 will provide a platform for Ireland’s return to economic growth over the next three to four years.
• The rates of CAT and CGT were increased from 30% to 33% from the 6th of December 2012.
Winter 2012 23
PIBA Excellence Awards 2012 November 15th 2012 - Four Seasons Hotel, Dublin 4 LIFE INSURANCE
Financial Broker Excellence 2012 (Overall Award) - New Ireland Excellence in Financial Products 2012 - New Ireland Investment Excellence 2012 - New Ireland Service Excellence 2012 - Irish Life Excellence in Broker Support 2012 - New Ireland
Excellence in General Insurance 2012 - Zurich Insurance plc Rebecca Kells, Sanjeev Kopan, Ciara McEvoy (Standard Life)
New Ireland sweep the board at the 2012 PIBA Excellence Awards
Elaine FitzPatrick & Tom MGarry (Zurich Life)
Niamh Mannion, Paul Kinsella (Friends First)
Denis Kelleher (New Ireland), Diarmuid Kelly (PIBA), Seรกn Casey (New Ireland), Liam Carberry (PIBA) Mark Nugent (Next Step Financial), Anthony Jones (AMJ Financial), Donal Milmo-Penny (SMP Financial Ltd.)
Michael Cosgrave & Maureen Breslin (Aviva Life & Pensions)
Jarlath Jordan (The MoneyButler Ltd.), Joe Cregan (Zurich Life), Seamus Dowling (New Ireland)
Sinead Spain, Deirdre Kelly, Edel Oates (New Ireland)
Eileen Meates, Declan Purcell, Liz Murray (Caledonian Life)
Denis Kelleher (New Ireland)
Diarmuid Kelly (PIBA), Gavin Brennan (New Ireland)
Eileen Meates, Declan Purcell, Liz Murray (Caledonian Life)
Irish Life win the 2012 Service Excellence Award
Zurich Insurance win the 2012 Excellence in General Insurance award
Diarmuid Kelly (PIBA), Tony Lawless (Irish Life), Liam Carberry (PIBA)
Diarmuid Kelly (PIBA), Connor Brennan (Zurich Insurance), Liam Carberry (PIBA)
Pat McEntee (PGM Financial Services Ltd.), Eamonn Phillips, Mark Shannon (Canada Life)
Declan Sweeney, Gillian Walsh, Alan McCarthy (Standard Life)
Mortgage or Loan Payment Protection Insurance — Still fit for purpose?
kevin paterson Sales & Marketing Director Assurant Intermediary Ltd.
The Irish press has been actively covering the subject of Payment Protection Insurance (PPI) recently, focusing on allegations of mis-selling by major Irish banks during the heady years of the Celtic boom. Much of this content has been driven by angry consumers who, when faced with unemployment or illness, were unable to make successful claims against their policies due to misunderstandings about eligibility. Because some Irish banks bundled this type of product with the sale of a loan, some consumers were even unaware that they had purchased the product in the first place. During better economic times when property prices were rising and unemployment was low, PPI claim levels remained small and the product attracted little scrutiny. But as the economy deteriorated, the flaws in the sale of these products were ultimately exposed. The discussion around Payment Protection mis-selling may lead to a slide in confidence about the product for both consumers and Brokers. Consumers may feel misled, and Brokers may avoid PPI due to the negative publicity. Although Brokers understand the value of the product, many may feel it’s best to avoid the attention of regulators or claims management companies who see the product only as an opportunity to make money. Whilst the vast majority of the regulators’ focus on misselling is directed at the banks, Brokers can help their clients by pro-actively reviewing their arrangements, ensuring that the cover in place remains appropriate over time. Sometimes the extra, unpaid work we do for our clients will eventually deliver the most value. As Brokers you have a responsibility to ensure your clients get the best advice. Continuous review of your clients’ circumstances to ensure that the cover they have in place remains appropriate is an ongoing commitment and an everyday part of the job. There is little doubt that many people were sold PPI policies that were unlikely ever to be useful or that they were unlikely to
remain eligible for. As the noise continues to build, I encourage you to take steps now to allay your clients’ concerns. Your attention to their fears could help your clients and potentially help you generate more business. The Central Bank has become increasingly aware of the rise in the number and activities of professional claims management firms. These firms may see the investigation announced by the Central Bank as an opportunity to make money by encouraging people to claim. Certainly there are valid claims that need to be addressed. But the activities of these claims management companies are likely to add to the general atmosphere of doubt and concern. Don’t wait until you are forced to act or defend yourself from claims firms who seek to obtain compensation for the client whilst generating a hefty fee for themselves. It is better to be pro-active by reviewing these arrangements with your clients now. The Central Bank has been clear in stating that clients who feel they have been mis-sold should have a clear path for complaint and redress without relying on a third party, and they have sought to make the process as easy as possible. Make sure that you understand the terms and conditions of the policies your clients hold, whether you gave the advice to purchase them or not. When in doubt, seek clarification from the insurers themselves. It’s more important than ever to rely on an insurer you can trust. Assurant Intermediary Mortgage and Loan Payment Protection Insurance ensures that all terms and conditions are clear and unambiguous. Assurant Intermediary also guarantees eligibility up front by manually underwriting each policy at a time when other insurers have chosen to exit the market completely. Payment Protection Insurance has always been a valuable product for many consumers, and in today’s uncertain times, it has become more important than ever.
We would like to take this opportunity to thank you for your continued support during 2012 and wish you and yours the very best for Christmas and the New Year.
Christmas closing times Aviva offices will be closed during the Christmas season on 24, 25 and 26 December as well as 1 January 2013. You can log on to www.avivabroker.ie at any time for all your information needs.
We look forward to continuing to work together in 2013 Aviva Life & Pensions Ireland Limited is regulated by the Central Bank of Ireland. Aviva Health Insurance Ireland Limited is regulated by the Central Bank of Ireland. Aviva Insurance Limited, trading as Aviva, is authorised by the Financial Services Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. 26 Issue 39
PIBA Meets … friends first Tom Browne & Brian O’Neill
chief executive officer strategic marketing director
Tom and Brian congratulations on your new appointments as Chief Executive Officer and Strategic Marketing Director respectively with Friends First and thank you both for taking the time to talk with us about changes within Friends First and, more broadly, our industry. If I could start by asking you about the recent changes in Friends First since the retirement of Adrian Hegarty as CEO? Many thanks for this opportunity to talk to you and your readers. Adrian Hegarty’s retirement also coincided with the departure of our Sales and Marketing Director, Eunan O’ Carroll. J. P. Hughes, formerly our Regional Sales Manager in Area South has been appointed to the expanded role of Chief Commercial Officer and is responsible for Sales, Product Development and Product Marketing. J.P. is supported by Shane Quinn, who has been appointed as Commercial Distribution Director, responsible for our team of Account Executives nationally and John Corr, who has been appointed as Commercial Transition Director. Brian’s new role as Strategic Marketing Director reflects the need to have a senior executive focused on the overall repositioning of Friends First in the market and preparing us for further change. We also have announced our intention to close our Dublin and Galway branches. The lead in time to June 30th 2013 will ensure that there is no adverse impact on our service delivery to affected Brokers who avail of services from these branch offices in the period up to and after the changes.
In recent years Friends First has aligned itself closely with a band of supportive Brokerages; has this strategy been successful and do you plan to continue in this vein? Friends First has provided added value support to Brokers in areas where they do not have in house expertise, including marketing. Our objective was to teach Brokers how to incorporate these disciplines into their business and to become competent in them. We believe this programme, which we branded ‘Spotlight’, has worked well and that the necessary lessons have been learnt so we are now altering our focus from consulting with individual Brokers to specific knowledge-sharing with groups of Brokers. Our new knowledge-sharing programme will focus on how Brokers can transition to a revised remuneration model and will draw on international experience from the UK and the Netherlands, informed by the experience of our shareholder Achmea. Life commissions in the Dutch market have been phased out through regulation since 2010 and will be banned entirely from January 2013. Dutch Brokers will rely exclusively on payment from their clients for advice. While changes in Ireland may differ from the UK and the Netherlands, we believe there is much to learn from these markets. Achmea has developed a knowledge-sharing programme for Brokers migrating to a fee based model and includes modules on CRM, compliance and cashflow management. We believe much of this material is relevant to our Brokers and we will bring some of our Achmea colleagues over to Ireland to present on their experiences to Brokers in 2013.
The entry of additional players has not resulted in growth in the market and this product has suffered badly due to the economic downturn, resulting in a significant reduction in new business levels and an increase in lapse rates. We believe that demand will recover somewhat as the economy starts to improve slowly from 2013 on, but the price of this cover will unfortunately limit its appeal. We are providing additional flexibility for policyholders who are finding it difficult to maintain current premiums but who want to retain some element of coverage.
persistency is of critical importance to life companies. The pressures brought by the Great Recession and other factors have had a negative impact on persistency. It is in many ways now generally accepted that change is inevitable. It goes without saying that change would be of considerable significance for the Broker community at large … Can you:
Can you explain a little about your relationship with Achmea and how Friends First sits in their strategic thinking? We can confirm Achmea our shareholder remains fully committed to remaining in the Irish market through Friends First. We can also confirm that Friends First will continue to distribute exclusively through financial Brokers. The current replacement of the Eureko name by Achmea in our brand does not reflect any change in ownership. Eureko was a pan-European insurance group established and jointly owned by a number of continental insurance companies including Achmea. Achmea was a founding member of Eureko and by late 2011 was the majority shareholder in Eureko and so took over that company, changing its name from Eureko to Achmea. Achmea is a fully committed mutual organisation and operates a group of strong successful insurance brands in the Netherlands and internationally. In the Dutch market, Achmea is the largest provider of non-life, health and income protection insurance and is also a leading provider of life and pensions. Achmea employs 16,000 people across its Dutch business and insures over eight million people in a Dutch market that is one of the ten largest insurance markets in the world. Achmea operates through multiple distribution channels, including a dedicated Broker focused company in the Netherlands. Achmea is also active in seven other European countries including Ireland, Turkey, Russia, Greece, Bulgaria, Romania and Slovakia, where it employs 8,000 people and insures over five million. Achmea’s experience in the Dutch life and health markets is relevant to Friends First and we are drawing heavily on their expertise in a number of areas, including the development of our new Broker education model.
Term Insurance Product - Theoretical Profit Profile
For some time Eunan O’ Carroll when working with Friends First championed the idea that “the model is broken” regarding the structure of our industry. This relates largely to upfront costs (including commissions) being spread into AMC’s creating a situation where
Income protection has been a considerable part of your business; with more life offices entering this market, how do you see this space developing in the years ahead? We are the most experienced provider in the Irish market with extensive experience in managing claims. The average length of our PHI claims is six years, so this remains a very relevant cover for self employed and employed persons.
28 Issue 39
Tom Browne (Friends First), Donal Milmo-Penny (PIBA), Brian O’Neill (Friends First)
products recognising the considerable time expended by the Broker to advise a client and to set up a new product. But we believe that the payment of override is no longer justifiable on the grounds of transparency and will ultimately be phased out through regulation. Friends First will be redirecting more of our future resources to providing greater value for Brokers and clients who retain more of their business with us.
Term Insurance Product - Theoretical Profit Profile
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Value Increase in policy duration
(a) Give us your view on this summation?
Reduced Acquisition Costs
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Cash Change in average policy duration “Commission Competition”
Source: Friends First
The chart above explains simply why the model is broken from the insurer’s perspective. Increasing competition in commissions has led to increased acquisition costs incurred by life companies. Greater price competition has resulted in reduced downstream profit margins for providers and so policies need to stay in force for a longer term to generate a profit: up to 10 years or more. Actual experience in the market has been the opposite over the period since 2008 and we and other insurers have experienced a material increase in lapse rates across all product lines while more policies are being lapsed early, which exacerbates the issue. This is damaging the profitability of new business for life companies in a declining market for new business. Current life company pricing and commission practices have resulted in the destruction of significant financial value for all providers in the market. We would agree that increasingly complex product structures are being used to facilitate the recovery of initial costs/commissions on early exit and that this reduces transparency. We believe that the quality of financial advice can be undermined by the type and level of up front incentives offered from life companies through products. While these incentives have led to rebroked business in the best interests of customers, the current level of rebroking leads us and others to conclude that some rebroking may not be in the best interests of customers. (b) Tell us how you see this scenario playing out? We believe that in progress European Directives changes will lead to more explicit disclosure of product charges and the cost charged for financial advice. Other domestic changes including a form of ‘auto enrolment’ compelling contributions to pensions may result in a prescribed level of product charges for these new products, thereby limiting what can be paid for advice through the product. We believe that reshaping the payment of commission over the term of a policy is in the best interests of insurers, Brokers and customers by optimising the creation of value for all parties over the policy term. We are making some adjustments to commission structures in 2013 which are in line with this view and which we believe will be sensible and equitable. We will continue to pay market rates of initial commission across all our
Source: Friends First
We believe that some of our competitors will make their own changes in response to the same issues we are confronting. We believe PIBA has an important role to play in continuing its dialogue with the providers on this subject. We strongly advocate action from Brokers and insurers and that ‘continuing as is’ is not a viable option. We contend that inactivity would be followed by a regulatory response which could lead to a reduced market for independent financial advice – not an outcome we want. (c) Map out how you would see any transition in model working in practical terms? We fully acknowledge that due to a Broker’s working capital requirements, a transition to a revised model would need to be practical, workable and tailored to the individual circumstances of each Broker. The outcome should be a reduced dependency by Brokers solely on upfront product commissions. We expect to see more Brokers offering a range of payment/charging options to their clients, including upfront commissions, advisor fees and/or trail commissions. These options can be incorporated by life companies into more transparent charging structures. Preferably allocation rates would be limited to a maximum of 100% supporting ‘factory gate’ pricing, which would enable Brokers to add their upfront advisor fees and trailer fees to the base charge. This will improve clarity on the level of charges in a product including what they are for. Advisor fees based on an agreed per hour rate can also be paid by the client to the Broker if both parties agree to this. Current Commissions Model
Recurring Commission (RC)+ Trail 25%
Current Observed Split for FF
Initial Commission 75%
Failing to plan is planning to Fail = No change and Regulator imposes significant changes
Plan and implement changes on a phased basis
Agreed Advisor Fees in Policy Charges
RC + Trail
Advisor Fees paid direct by Customers Source: Friends First
The key objective is to provide more choice and clarity to clients and to ensure that the Brokers are paid fairly for their advice as agreed with the client. The product should then compete on its own pricing and performance merits and not on the basis of allocation rates or upfront commission levels.
Winter 2012 29
PIBA General Insurance CPD Bootcamp
Pensions – A New Reality …
kenny mellor Pensions Manager Irish Life
Eileen Turtle and Patricia Patton (Wright Financial Solutions)
David Holton (PIBA) Paul Fitzpatrick (Marino Investments and Insurances)
Eoin O’Neill, Alan Kavanagh (Aviva Health)
There is no doubt in anyone’s mind that the past four years have been an extremely challenging time for the pensions industry — for clients, financial advisers and pension providers. From a pension legislation perspective, we have experienced reductions in the maximum lump sum entitlements, Standard Fund Threshold and the earnings cap for income tax relief purposes. We have also seen an increase in the rate of imputed distributions on ARFs and vested PRSAs, and the introduction of a 0.6% pension levy on pre-retirement pension funds until at least 2014. All of these changes have been regarded negatively by consumers and there is no doubt that they have impacted consumer behaviour. Notwithstanding these changes, the reality is that consumers still need to plan for their retirement and financial advice is needed more than ever to help consumers navigate the pension planning landscape. All this is leading many advisers to upskill themselves on the new legislative changes and adjust their clients’ retirement plans to take these changes into account. Financial advisers are working hard to help provide solutions to clients on some really tough questions: • Am I only delaying paying tax, and if so what is the point? • I do not have enough time left to save so how can I achieve my goal? • My company profits are not guaranteed, so how should I be contributing? Let’s take each one above and explore what options or solutions might be available for clients.
Am I only delaying paying tax, and if so what is the point?
Benny Sheridan, Monica Leonard, Miriam Sheridan (Sheridan Insurances) Tom Ledwidge (National Corporate Finance Limited)
David Snow (Zurich Insurance)
Pension income is taxed as personal income in retirement. However, many consumers do not realise that their personal income exemption limits increase at age 65 to €36,000 for a married couple or €18,000 for a single person currently. The significance of this is that some consumers may pay little or no income tax when they draw down their pension fund. EXAMPLE Current Income Exemption Limit
Current Married State Pension (Contributory) at age 68 (full rate plus adult dependant)
Fund required to plug income gap and pay no income tax liability (based on annuity rate of 3.92% for a male 68 with 50% spouse’s pension, escalating at 2% per year) €340,608 Tax-free Retirement Lump Sum
John Bermingham, Brian Murray, Graham Free (Brian Murray Financial Services)
Paul Scully (Zurich Insurance)
kindly sponsored by aviva health, zurich insurance and assurant 30 Issue 39
Pascal Curran (Advice First Financial) Declan McLaughlin (Crana Financial Services Ltd) Oliver Farrell (Farrell Financial & Accountancy Services)
As you can see from the example above, clients could target the income gap in retirement, which will mean they will pay little or no income tax at the point of retirement in addition to receiving their tax free retirement lump sum, whilst also receiving up to 41% income tax relief on any personal contributions they make to their private pension. This is based on the customer not receiving any other income. Maximising this opportunity will also provide the clients with a more
realistic contribution level today that might suit their current income budget
I do not have enough time left so how can I achieve my goal? If there is not enough time left for your client to achieve their original retirement goal, then maybe there is an opportunity to show an alternative target that is both cost and tax effective. Many key employees in company pension schemes do not realise that they can receive a retirement lump sum of up to 1.5 times their final salary at their normal retirement age assuming that they have at least 20 years’ service. EXAMPLE Final Salary
Years of Service
Pension Fund at NRA 68
Retirement lump sum payable (1.5 times final salary)
In the example above, a client could target a retirement fund of €75,000 and receive it all as a tax free lump sum whilst also receiving up to 41% income tax relief on any personal contributions; and any employer contributions can be offset as an expense against company profits. Have you clients who might fit into this bracket?
My company profits are not guaranteed, so how should I be contributing? Many business owners are naturally concerned about keeping their business afloat and paying their bills and so their company pension is almost a secondary thought for them. They are concerned about committing to a large company sponsored regular premium and are looking for more flexible options that might suit their business. The answer for them might be to contribute a more realistic regular premium whilst supplementing it with single premium injections. The reality is that the majority of these types of clients have long service with their businesses and have not been contributing the maximum into their plans, and so the method of contribution payments I have mentioned above is less onerous on them long term whilst also providing the opportunity to contribute and reduce the company tax bill. To support financial advisers who provide solutions to these problems every day, Irish Life have recently launched a new ‘4 in 1’ calculator that can quickly and easily provide the figures discussed in the examples above. For more details on our new calculator, please contact your Irish Life account manager, who will be happy to provide a demonstration for you. We strongly urge clients to speak to their financial adviser for help in keeping their retirement plan on track, which may as the solutions above demonstrate require a move in a different direction that will still provide the needed result. This article should not be regarded as financial advice and figures are estimates only. They are not a reliable guide to future performance of the investment. Irish Life Assurance plc is regulated by the Central Bank of Ireland.
Winter 2012 31
Mortgage Survey Q.3 2012
rachel doyle Chief Operations Officer PIBA
“How much of the increased activity is attributable to the ending of mortgage interest tax relief in December remains to be seen.”
With mortgage tax relief coming to an end, a possible decrease in the ECB interest rate, mortgage rates rising at home, lending still declining and uncertainty around house prices, it is hard to know what to expect from the property market in 2013. The PIBA Mortgage Survey for Quarter 3 2012 gives a broad picture of the market. While some of what emerges may not be too surprising, it does indicate that stabilisation may be underway.
Access to Credit Forty-one per cent of PIBA Brokers say that over 60% of cases submitted to lenders are declined. This is slightly lower than the second Quarter of 2012 and down 14% from the third Quarter of 2011. Repayment capacity was again a huge issue, with 35% of Brokers indicating that this is the main reason for refusal of mortgage credit, up 4% on the second Quarter. Repayment capacity is the ability of the potential borrower to demonstrate the capability to make monthly mortgage repayments. It must be evidenced by a savings history, rent repayments, a current mortgage or loan that will not be in place when the new mortgage commences, or a combination of these. AIB continues to process the most applications with 51% of Brokers selecting them as top lender, up from 24% in Quarter 3 2011. AIB is followed by ICS/Bank of Ireland whom 36% of Brokers selected as second, down from 55% on the same period last year. Almost three in four Brokers say the greatest impediment to people taking out mortgages is that “Lenders are not willing to lend”. This was up slightly on the previous Quarter. However an IBF/PwC Mortgage Market Profile report published in early November showed a 23.5% increase in the number of new mortgages issued in the third Quarter of 2012 compared with the previous one and an increase of 10.4% on the third Quarter of 2011. This indicates the first year-on-year increase since Quarter 3 2006. While welcome, these figures are coming from an extremely low base and it is too early to say if they indicate a positive change in lending policy. How much of the increased activity is attributable to the ending of mortgage interest tax relief in December remains to be seen.
Application process Almost 60% of Brokers surveyed say it is now taking four months or more to process a mortgage application from beginning to cheque issue. This is up 2% on the second Quarter of 2012 but down from Quarter 3 2011 when it was at 74%.
Distressed Mortgages Some new options have been introduced for distressed mortgage holders. A review of the MARP process by the Department of Social Protection found Minister Joan Burton
32 Issue 39
announcing a new “advisory service”, limited to accountants and paid for by lenders. However, the accountants are not allowed carry out any audit or verification of the contents of the Standard Financial Statement or the Mortgage Forbearance proposal, they cannot offer mediation with the lender and are not expected to carry out research for a better alternative for the consumer. This is totally insufficient to address the difficulties of mortgage holders and PIBA has called for the process to be reviewed straight away. The Minister has agreed to review it next summer. This is inadequate and we will continue to lobby for a more urgent review. The Personal Insolvency Bill is currently going through the Oireachtas and members throughout the country are assisting us with a campaign at national and local levels to ensure that Financial Brokers will be eligible to act as Personal Insolvency Practitioners. Financial Brokers are the most suitably qualified and positioned to undertake this role. In our recent survey 66% say they are undertaking such work. The good news for those who are in difficulty is that 59% of these Brokers have indicated that lenders are willing to come to an arrangement. KBC, permanent tsb and AIB have been found to be most willing to do so. However, the current system has a long way to go before it meets the requirements of those in distress with 72% of Brokers feeling that the existing mortgage arrears code does not do enough to assist those in difficulty.
Seasons Greetings from Canada Life
Market Outlook Looking ahead 72% of Brokers believe the mortgage market will either stay the same or improve over the next twelve months. Thirty-eight per cent say they are now seeing a demand for negative equity mortgages and 52% say there is an increase in overall demand, down from 54.5% in the second Quarter of 2012. Of those who have indicated an increase in demand 31.5% have attributed this to “the budget mortgage interest relief measures.” Sixty-seven per cent say demand has increased because of “People feeling property is close to or at the bottom of the market“ and “The fact that it is as cheap to buy as rent.”
Conclusion All the indicators seem to point to market stabilisation. However, some more time is needed before this can be confirmed. With the introduction of the new Personal Insolvency Bill and the transparency in prices arising from the property register, one thing is for certain: 2013 is going to be a year to watch..
We thank you for your continued support in 2012 and we wish you and your loved ones a Happy Christmas and every success in the year ahead. Canada Life Assurance (Ireland) Limited is regulated by the Central Bank of Ireland.
With over €2bn in assets, NeW IRelANd’S IRIS range is one of the most successful lifestyle strategies in Ireland. New Ireland, in partnership with SSgA, recently concluded a major review of IRIS and are introducing a number of important enhancements as a result. 5 Years to NRA
Taking a bit less risk Figure 2 shows a breakout of the target return portfolio.
Eoin Kennedy Head of Products, New Ireland Assurance
Asset Class Developed Equities
What are the key changes? The key conclusions of the review were:
✓ The active version of IRIS should be more actively
Corporate Bonds (investment grade)
✓ The passive version of IRIS should be fully passive
Emerging Market Bonds
High Yield Bonds
✓ Both versions of IRIS should de-risk a little,
Hedge Funds / Alternative Payoff
particularly in the 5 years before retirement
✓ These enhancements should apply to existing customers as well as new customers
A criticism often levelled at actively managed funds in Ireland is that they are not actively managed enough. Why does the traditional Pension Managed Fund have a minimum of 60% in equities? Why doesn’t the fund manager take more account of market volatility? Why limit yourself to equities and government bonds? Our review concluded that IRIS should be different. As a result, a large part of IRIS will now be invested in a target return portfolio. Figure 1 shows how, for customers with 15 years or more to retirement, IRIS will look before and after this change. Current IRIS
Target return fund
Government bonds (short to medium)
Global Real Estate
• Have broad asset allocation ranges • Be more actively managed, i.e. the fund manager will use the full ranges available to them • Include a wide range of alternative assets • Target a return of cash +4%, i.e. no looking to a peer group benchmark to determine asset allocation • Focus on managing volatility as well as generating a return
What are the key changes to Consensus IRIS? The “consensus” approach to fund management is often described as passive but it isn’t really – in an era of increasing globalisation and access to world class fund managers, setting the asset and/or equity allocation of a fund based on the views of a small pool of Irish fund managers is undoubtedly an active asset allocation decision. At the same time, developments in investment markets mean currency hedging is now extremely cheap and easy to implement – there is no longer a need to have a bias towards one’s own country or currency region. As a result, New Ireland are taking the important step of moving our passive lifestyling model to a fully passive basis. This article is the last time you’ll see the fund name “Consensus IRIS” – from now on it will be known as Passive IRIS. Passive IRIS will have: • No link to active Irish fund managers • A fully passive, global equity portfolio • 75% currency hedging Overall Passive IRIS will be a simpler, clearer message for customers and pension trustees alike.
While most pensions customers have a very long time horizon and can therefore afford to take more risk, our experience in Ireland (and customer research from the US, UK and other countries) shows that when someone saving for retirement sees a sharp drop in the value of their pension fund, they can lose confidence in their pension and stop saving altogether. This is not good for anyone! Furthermore, the current default approach in the market is to have a traditional managed fund equity content up to 5 years before retirement. This can result in over 70% invested in equities at this point. We have concluded that this is too much risk too late in the day: any fall in markets will hit the portfolio hard and there won’t be enough time to recover, particularly as the traditional approach starts rapidly selling out of equities at this point. As a result, we have decided to de-risk IRIS, particularly closer to retirement.
Target return fund
Government bonds (short to medium)
Corporate bonds Cash
Figure 3 shows the old vs. new asset allocation of IRIS (active).
5 Years to NRA
Figure 4 show the old vs. new asset allocation of Passive IRIS. This new, lower risk approach should find favour with trustees and customers alike.
Current Consensus IRIS
Who manages the money?
State Street Global Advisors (SSgA) manage both the active and passive versions of IRIS. SSgA are one of the largest and most well respected fund managers in the world. Their huge scale and global reach makes them the number one passive manager – not just in Ireland but in the world! – and opens up a wide range of skills and investment opportunities within IRIS that is far beyond the reach of any domestic fund manager. State Street employs over 2,000 people in Ireland.
Government bonds (short to medium)
Keep it simple! Customers often perceive pensions to be complicated and difficult to understand. While most people know they need to take out a pension, the level of complicated investment decisions required to take out many pension products makes many people put it off indefinitely. IRIS follows the “Target Date Fund” model – the customer invests in a single fund, based on their retirement date and stays in that fund throughout their career. No switching between funds, complicated asset allocation
decisions or “what type of investor would your friends describe you as” questionnaires. In IRIS, the difficult investment decisions made by professional fund managers, not customers. IRIS is now moving from 2 year bands to 1 year bands – so a customer retiring in 2020 will now be invested in a fund only with other people retiring in 2020. As well as providing a simpler message for customers, this allows us greater precision in managing their investments.
State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Incorporated and registered in Ireland at 2 Park Place, Upper Hatch Street, Dublin 2. Registered number 145221. Member of the Irish Association of Investment Managers. New Ireland Assurance Company plc is regulated by the Central Bank of Ireland. A member of Bank of Ireland Group.
Investments made easy
PIBA Member Profile PIBA Member : Inverdea Location : Wicklow Town Established : 2002
Financial Services Ltd
• Most recently the merging and sale or potential sale of a number of our life insurers and subsequent reduction in competition in the market. And yet despite all of this change and challenge independent Brokers have not only managed to survive but have continued to grow in importance in our industry.
So what lies ahead?
Five risk-based funds
A family of multi asset funds that are risk-based.
Saves you time
Using MyFolio and the risk questionnaire is easy, freeing up your time to focus on your clients.
To keep your client’s investment on track, Standard Life Investments rebalance and monitor the MyFolio funds. For more information contact your Standard Life Business Manager or go to www.brokerzone.ie. Warning: If you invest in these funds you may lose some or all the money you invest. Warning: The value of your investment may go down as well as up. Warning: This investment may be affected by changes in currency exchange rates.
Background The company was formed in 2002 by Duncan Duke, Nicola Byrne and Joe Murphy, who between them had over 50 years’ experience gained with major insurers and Brokerage houses. The aim was to build a focused and highly professional financial advisory services business concentrating on the self-employed, business owners, SME’s, and their staff in the North Wicklow/South Dublin catchment area. The first few months of the firm’s existence were spent in compiling a detailed business plan and liaising with the Central Bank with regard to regulatory approval. Our doors opened for business in March 2003 – in the midst of the ‘Celtic Tiger’ era. Our arrival on the scene coincided with at least three other new start-ups in the town and made for plenty of healthy competition. It is interesting to note that after a decade we are the only one of the four new players from 2003 that remain in business in the town. What has happened in the interim? It is always interesting to reflect on what has happened over the intervening decade. It suddenly becomes clear how much has changed and the challenges that have been presented to our industry; and in particular the independent Broker market. For example: • We have had to deal with increasing levels of regulation and supervision resulting from compliance, fitness & probity, money laundering and consumer protection legislation.
This is a question we all ponder from time to time as we face into a new year. In short the answer must be more of the same! More compliance, more legislation, more consolidation and more complexity. This seems daunting but it is also the backdrop to our success. For example: • Increasing complexity requires us to provide our clients with well researched solutions to their financial planning needs. • This in turn enables us to demonstrate our professionalism and independence. • In these uncertain times our clients have an even greater need to protect their families against financial hardship due to illness or death; to save and build their wealth; and to manage their incomes in retirement. This requires them to enter into long term relationships with their financial advisors. • There is a growing awareness amongst our clients of the value of independent financial advice – comparison websites can only offer product. Our strength is in getting to understand our clients’ needs and helping them to identify and fulfil their financial objectives. What do we intend to do? Our plan for the future is to: • Continue to work with our clients and to identify what it is they want from us. • Invest in our skills and training.
• Those of us in the industry who interact with the end-users of our services – our clients – have had to demonstrate, through relevant qualifications, our knowledge and professionalism in those areas where we seek to provide advice.
• Utilise technology to facilitate research and analysis and to maximise our efficiency.
• There is an ever increasing array of financial products on offer to our customers, requiring us to constantly update our knowledge.
• Maximise our revenues.
• We have seen continuous expansion in distribution channels and use of social media in the marketing arena.
• Continue to engage with all product providers to develop and enhance the concept of partnership. This approach has worked for the past ten years and will hopefully sustain us for the next ten!
• The fallout from the recent financial crisis has undermined our customers’ confidence in financial markets and institutions.
Pensions and Investments since 1834 standardlife.ie
Standard Life Assurance Limited is authorised by the Financial Services 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.
• The pensions sector, one of our major areas of activity, has been thrown into confusion by constant intervention from the Government: e.g. reduction/removal of tax relief; the imposition of the pensions levy; reduction in maximum tax free cash; limits on overall fund size and increased deemed distributions from Approved Retirement Funds.
Winter 2012 37
Reviews books, blogs, websites book review STATISTICS FOR DUMMIES Dorothy Rumsey PhD
karl deeter Operations Manager Irish Mortgage Borkers
The ‘For Dummies’ range of books has a title for almost anything you can think of, from languages, to forensics and even statistics. Because we are constantly bombarded with numbers and figures I thought it would be worth taking a look at this book to see what it has to offer. They don’t mess around; in a short amount of time you are into probabilities, standard deviations and regressions. The beauty is that it is done in such an accessible manner. Something that is becoming more apparent (at least to me) as time goes by is the way that statistics can be represented in order to send a certain message when, upon examination, that message is not true, or at least not a totally accurate reflection of what the statistical representation was used for. A great example? Income inequality: I saw a presentation recently that showed how ‘unequal’ we are as a nation
when it comes to earnings, but it didn’t include welfare, transfer payments from the state, or pensions received; nor did it detail hours worked (part time versus full time) or many other things that make a real difference in the real world. Statistics for Dummies helped me to see right through much of that presentation and ask the relevant questions. Categorising data, understanding it and seeing what it really means is vital as a financial advisor. We all get endless marketing from different sources and every provider sets their stall out as to why they are the ‘best’, but are they? And are they comparing like with like? I don’t think you can go far wrong knowing a little more about statistics! After all, it’s one of the main tools used to professionally spoof people (no need to mention how destructive the pension levy has been!)
PIBA Update Events
Compliance and Legislation
PIBA General Insurance CPD Bootcamp | October 2012
Press Coverage (Print and Web)
PIBA held a 4-hour CPD Bootcamp seminar on the 2nd of October in the Red Cow Moran Hotel. The following topics were covered: • SME Insurance • Payment Protection Insurance • Health Insurance • Household Insurance and Claims. This bootcamp was kindly sponsored by Assurant, Aviva Health and Zurich Insurance.
PIBA and New Ireland Pension and Investment Seminars | October 2012 PIBA in association with New Ireland ran a seminar series in October 2012 in Dublin, Cork and Galway respectively. The topics covered included: Protection, Pensions, Investments and Risk Profiling and Tax Planning. Over 250 delegates attended and four Formal CPD hours applied.
PIBA Winter CPD Bootcamps 2012 PIBA held its annual CPD Bootcamp seminar series on November 29th, December 3rd and December 6th in Athlone, Cork and Dublin respectively. Topics covered included: Ethics, Compliance the year in Review, Gender Directive and Protection, Investments, Pre Retirement Opportunities and the Post Retirement Market.
website MyHome.ie MyHome.ie is a site we all know about, but they have undergone massive change of late and I think it is worth looking at some of the things they have been doing that are different from the past. For a start, they are no longer only about ‘sales’; you can now advertise rental properties on the site as well. Best of all? The price … it’s free! You can opt for a premium ad for €10 or a featured one for €20, but it sure beats the pants off Daft.ie’s prices, which start at €35 and go up to €175. Another thing they have done is track asking price changes: if you click on a property you can see a history of its asking prices, and you can also see the dynamic of comparable properties in the area, because their asking price changes are also listed at the bottom of the page. So in a single page you get an idea of what is happening with not only the specific asking price of a property, but also the surrounding area. And to take it one step further, it also shows the closing price of a property in the area if any have occurred that were entered on
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the PropertyPriceRegister.ie database, meaning that you have closing prices listed as well. These changes are the reason why (personally) I find MyHome.ie the most useful property site. Obviously working in mortgages means that in our firm we spend a little more time on there than others might, but if you do Broker loans then it is worth taking a look at properties your client is considering to make sure that they are bankable. If other prices in an area are dropping and closing values are below that of the property being considered then it might be worth mentioning this to your client so that they are aware of it themselves. There is also updated mapping, and a ‘nearby services’ section that lists out schools, childcare and companies in the surrounding area, so if you haven’t checked out MyHome.ie in a while, I suggest you take a look. It really has come a long way in the last year.
Approximately 400 delegates attended these seminars.
Meeting with the Department of Finance A delegation from PIBA met with the Department of Finance in relation to IMD II proposals on the 17th of September 2012.
BIPAR Meeting A delegation from PIBA attended the BIPAR special IMD II meeting on the 2nd and 3rd of October. Whilst in Brussels, PIBA made a presentation to Irish MEP’s on IMD II on the 4th of October.
Pensions The PIBA pre-budget submission was issued to all relevant Government departments and pension bodies on the 23rd of October. A number of PIBA members lobbied their local public representatives on the main issues, with the main objective being the continuation of tax relief at the marginal rate. Positively, the marginal rate was maintained in the 2013 Budget. The Pension Charges Report was released by the Department of Social Protection on the 23rd of October. PIBA circulated a response paper for members on the 26th of October explaining industry charges and the value of advice. PIBA will be making a formal response to the Department of Social Protection on this area within the threemonth reply deadline.
October 1st – Official: Cheaper to buy than rent a home [irish daily mail] October 2nd – Time to crack open your pension? [irish times] October 5th – More mortgage pain on way as banks run riot [evening herald] October 5th – More banks plan mortgage hikes as State ‘fails to act’ [irish independent] October 7th – Arrears threat from AIB rate hike [sunday business post] October 30th – Property groups call for extension of mortgage interest relief [irish independent] October 30th – Calls for property tax exemption [irish examiner] October 30th – Call for Mortgage Interest Reprieve for two more years [metro herald] November 2nd – A pocket history of property policy [irish independent] November 11th – Number of new mortgages issued during third quarter up 24% but overall figures still near 40-year low [rté website] November 9th – Number of new mortgages rises for first time in six years [irish independent] November 9th – Mortgage lending up by over 10% [irish examiner] November 9th – House market lifted by rush for tax break [irish daily mail] November 9th – New mortgage lending reaches €663m [evening herald] November 15th – Worry for banks over creation of new mortgage-broker group [irish independent] November 16th – New Ireland top insurer [irish independent] November 27th – House prices fall for first time in four months [irish times] November 28th – Debts prompt pension rethink [irish independent]
The Winter Bootcamps were kindly sponsored by Canada Life, Irish Life, Standard Life and Zurich Life. Please note: All of these events were provided free of charge to PIBA members and their staff.
PIBA Online Ethics Module An Ethics module is available to all members free of charge through an e-learning system. This facility has been kindly supported by Wealth Options. For more information on PIBA events please contact firstname.lastname@example.org or audrey.feary@ piba.ie.
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Winter Spring 2012 39
Quarterly Crossword Competition 1
10 11 12 13 15
WIN a two night stay at the Lough Rea Hotel & Spa, Co. Galway * Includes two nights bed & breakfast and one evening dinner/meal
General Knowledge Crossword across
6 Asmara is the capital city of this African country (7) 7 Pieces of furniture for school pupils (5) 9 Name of the superstorm which hit the USA and Canada in October (5) 10 Moment when a spacecraft leaves the launch pad (4,3) 12 Climbing plant with flowers that smell sweet (11) 14 One of the actors who played James Bond before Daniel Craig (4,7) 18 Winner of 2012 USPGA Championship and the world’s number one golfer (7) 19 Actress who won an Emmy in 2012 for her portrayal of Violet, Dowager Countess of Grantham in ‘Downton Abbey’ (5) 21 Henry VIII and Elizabeth I were members of this royal dynasty (5) 22 Court associated with King Arthur (7)
‘______ Expectations’, one of Charles 1 Dickens’ best-loved novels (5) 2 Artist’s workplace (6) 3 ‘Mad _____’, a US television series set in the world of advertising (3) 4 Scottish team in Barcelona’s group in this season’s Champions League (6) 5 2012 James Bond movie in which Javier Bardem plays the villain, Raoul Silva (7) 8 Disagreement shown by footballers towards the referee’s decision (7) 11 Container which releases an air spray (7) 13 Spicy sauce made from tomatoes and vinegar (7) 15 Admiral killed at the Battle of Trafalgar (6) 16 Barack Obama’s 2012 US Presidential opponent (6) 17 A seat without back or arms (5) 20 Ruby, the American comedian (3)
how to enter Simply 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. Entries to arrive not later than 31st January 2013.
Company: ................................................................................................................................................................... Address:
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The award winning 4-star Lough Rea Hotel & Spa is situated overlooking the beautiful Lough Rea lake in Loughrea, Co. Galway, located just 20 minutes from Galway city and 1.45 hours from Dublin. Open just over four years, the sophisticated, stylish and modern chic Lough Rea Hotel & Spa caters for all your hospitality needs. The Lough Rea Hotel & Spa specialist business includes weddings, conferences and events. The hotel has 91 luxurious bedrooms including two suites, our superbly appointed ballroom the De Dannan Suite, a beautiful A La Carte Restaurant, namely the Abbey Restaurant, the Lir Brasserie where excellent food and beverages are served all day, the Shore Island Spa where you can relax, unwind and take some time out, and an indoor kids activity play area called Play Town. Contact details: Lough Rea Hotel & Spa, Old Galway Road, Loughrea, Co. Galway. Tel: +353 91 880088 | Email: email@example.com Web: www.loughreahotelandspa.com
SOLUTION to the Autumn 2012 Crossword
L S O N E P T U N W E E B I L L Y S L T P A R A B R S I R C H R R E A C Y C L O N A T T I N D I A I C
C S A L L Y P I S O E T J E N
K G P A R I S N L I L I N G O O M P I C S K H O Y P G S P I R E O A S S I C A E E
CONGRATUL ATIONS to competition winner Margaret Hickey, Smith Insurance Brokers, The Village Square, Tallaght, Dublin 24.
This is a PDF version of the complete magazine, including cover and advertisements. The PDF is presented in single-page format.