Go for growth Even though the economic climate seems bleak that doesnâ€™t mean there are no opportunities for growing and developing your business. Many of our business partners are well placed to achieve growth and recoup lost revenues by embracing innovative strategic services. Navigation Wealth can work with your business to develop financial services as a strategic part of your business model. Hello and welcome to our first edition of Navigation Post Navigation Wealthâ€™s voice and update for our Business Partners and Clients. Since our formation in 2009 we have been developing our business network and are well underway to becoming the largest truly independent broker for accountants and professionals in Ireland.
In this edition we highlight the importance of Business Protection Insurance and the potential consequences on companies and partnerships should death or illness occur. As their trusted adviser reviewing this could have a significant impact on their bottom line. On the investment front Sean Oâ€™Sullivan considers the importance of ensuring your clients investment portfolios are adequately aligned to their investment risk strategy. I also look at the use of Dividend Investing in an era of lower yields and longer lives. We set out our view on Deposit Rates and our Current Preferred Deposit Rates. We also provide you with a review of books that we believe will be of interest and use to our clients. Whether your business is a long running or recently established or a client who requires assistance in financial matters, Navigation Wealth will work with you to deliver smart advice that matters.
Our business partners and clients are adept at identifying opportunities and developing a clever business strategy incorporating Navigation Wealth as a niche financial and investment advisor tailored to both the needs of their practice and most importantly their clients. As a business partner or as a client, this and future editions of Navigation Post will help you identify new opportunities, highlight needs and concerns raised by our clients and identify solutions that we all should be made aware of.
Richard Riordan Managing Director
Business Ownership Protection As a company director, shareholder, or partner your business is often one of your major assets. It is therefore, particularly important to safeguard the ownership of the company in the event of the death of you or one of your business partners. Ask yourself the question, what would happen if one of you were to die or become seriously ill? • • •
Do the surviving partners or shareholders have sufficient funds to buy your shares? Would your dependants want to sell your share or become involved in the business? If you become seriously ill, could somebody else purchase your shareholding?
Through the implementation of a Business Protection Plan you can ensure that the future of your business is safeguarded. While the process involves a legal agreement regarding future ownership of the business in the event of the death or illness of the shareholder it can easily be implemented.
Shareholder Protection This type of arrangement can ensure that if a shareholder dies the company will receive a lump sum pay-out to enable the surviving shareholders to purchase the deceased’s share of the business. This type of arrangement is accompanied by a legal agreement, stipulating that if a shareholder dies, the other shareholders will be able to purchase his/her shares in the business.
The proceeds of the business protection plan is paid to the company who in turn utilise the proceeds to enable them to keep the company running smoothly.
The procedure is as follows: • The company sets up a life assurance policy for each director with a sum insured equal to their shareholding. • Ensure certain legal and tax requirements are fulfilled to permit a company to buy its own shares and ensure favourable tax treatment. • Set up a legal agreement which will facilitate the purchase of the deceased person’s shareholding by the remaining company directors.
Advantages of Business Protection: • If the deceased’s family do not wish to become involved in the business they can receive a lump sum instead for payment in lieu of their shareholding. • It will provide sufficient funds to enable the remaining directors or shareholders to purchase the deceased’s share of the business • It can prevent shares passing to an outside party, possibly a competitor or someone lacking sufficient experience and knowledge of the business.
Case Study Gertrude is a director of a recruitment company and has a 33% shareholding worth €250,000. The company in total is valued at €750,000 with two other directors also controlling 33% shareholding each. Sadly, Gertrude is in a bad accident and dies.
With Business Protection The company effected a life assurance policy on each shareholder for €250,000. They had arranged for the appropriate legal requirements to permit the purchase of shares from her estate. When Gertrude died the insurance company paid out €250,000 to the company. This amount enabled the surviving directors to purchase Gertrude’s shares from her family. This allowed the directors to keep control of the company each now owning 50%. Gertrude’s family didn’t want to become involved in the business, and the payment for the shares helped them at a difficult time.
WithOUT Business Protection The company may have to take out a loan to finance the share purchase. The company may not be able to afford the loan resulting in financial difficulties for the business. If they were unable to take out a loan Gertrude’s family would retain her 33% shareholding and participate in the business. This may lead to disputes with the surviving shareholders as the next of kin may not have any experience in running the business.
Through the implementation of a Business Protection Plan you can ensure that the future of your business is safeguarded.
For business protection planning please contact: Navigation Wealth Ltd on 021-4909104 or at firstname.lastname@example.org
Breon Manning Financial Consultant
WE SAVE LOTS OF PEOPLE LOTS OF MONEY... Most of us hate paying for insurance on the basis that we are paying out money for something we hope will never be needed. However, some insurance is a legal requirement e.g. motor and other types such as home and life insurance may only help us sleep more peacefully at night. There is no doubt that it is foolish to ignore insurance altogether, but one must be very wise to only buy insurance that is actually worthwhile with the right amount of cover and at a good price.
In a ferociously competitive life assurance market we have seen a downward spiral on rates and terms to attract new customers. This allows people the opportunity to exchange old policies for new provided it is advisable and prudent to do so. Our Advice tip…… Review Your Life and Protection Policies Now!
Deposits Deposits Deposits Navigation Wealth provide independent and impartial advice on deposits to all clients. We hold appointments with KBC Bank Ireland, EBS Building Society, PTSB and Leeds Building Society Ireland.
We consistantly review the life assurance, income protection and specified illness policies available on the market.
Irish deposit rates have been artificially high in recent times due to the need for institutions to rectify their solvency positions and simply get money on the books. Our view is that rates will start to adjust to more normal levels over the next six months so if you are looking for better longer term deposit rates now is the time.
Our objective is simple: to reduce your monthly premiums and maintain or provide better cover and advice? We believe we do this in more than 70% of cases.
Our preferred rate below (at time of going to press). Terms and conditions apply, deposit rates are subject to change and are not guaranteed until date of investment. DIRT tax applies at 30% and will be deducted at source.
Richard Riordan Managing Director
KBC Bank Ireland
3.25% Gross/AER (Variable) Min Balance: €3,000
Max Balance: €100,000 (surplus including interest over €100k will earn interest on Standard Demand Deposit interest currently 2.50% Gross/AER (Variable)
Fixed Term Deposit KBC Bank Ireland (short term) 14 Month Fixed Term Deposit
5.00% Gross (4.29% AER) Min Balance: €3,000 Max Balance: €1,500,000
New Age Investing the dividend question THE RICH WILL always have a comfortable retirement; the poor will be supported by the state. For the people in the middle, the best hope of a decent pension has traditionally been to find a job that offered a final-salary pension and then hold out for the rest of their careers. With more and more defined benefit schemes closing for new members or indeed winding up, the investment assets chosen within pensions is more crucial than ever before. In a fast greying world, with the number of people over 65 expected to triple to two billion by 2050 and greater life expectancy than ever before pension funds, insurers and investment managers must look to assets that deliver a steady income stream.
the current investment and market climate is such that traditional income yielding assets are depleted
Much of my time over the past decade has been spent investing assets pre and post retirement. At retirement, in all but a few cases they first looked for income. Having a predictable, steady and long lasting income stream is crucial for paying bills and peace of mind. However, the current investment and market climate is such that traditional income yielding assets are depleted. Top rated bonds are at record lows and those offering decent yields are in the ‘too good to be true’ bracket.
Is it time to look elsewhere for income? Many of the investment managers we have spoken with believe dividend investing to generate income and income growth is now worth a serious look. The general consensus to support this view stems from the following points: • High-dividend stocks tend to outperform most other assets in periods of low or no economic growth – this is reflective of current market conditions • US and European pay-out ratios are at lows while companies are accumulating record cash piles • Fund movements suggest dividend investing has momentum but still plenty of scope to move upwards.
Dividend growth has also been recognised as a key driver of total returns in the long run and the reinvestment of dividends has made all the difference in adding to long-term equity returns. Like all equity investing is far from risk free and investing in dividend yielding funds will not fulfil all retirement needs. In conjunction with high-yielding stocks investors must consider their own investment risk profile and incorporate:
Other asset classes, including high yield bonds which have tended to outperform dividend stocks during economic downturns. Property and alternatives should also form part of a well-diversified income generating portfolio.
There are suggestions that high-yielding stock are starting to become pricey by historical standards compared with growth stocks.
Get Advice If your clients are looking for income to supplement their daily expenditure then it is advisable to have a mix of income paying investments. This could reduce the volatility of their income as well as portfolios and also provide more regular income payments as many dividend yielding investments only pay out twice a year. Different funds carry varying levels of risk depending on the geographic region and industry sector in which they invest and any yield figures provided are not a reliable indicator of future returns. However, with annuity rates offering purchasers with poor value and the current high and indeed distorted deposit rates facing reduction perhaps it is time for investors to consider alternative income generating investments. Seeking advice from an independent financial adviser will help you balance your appetite for risk.
Navigation Wealth has considerable expertise in this area and would be pleased to discuss your clients options, or any other financial services ideas.
Richard Riordan Managing Director
Importance of Asset Allocation in Diversification and Managing Risk Asset allocation means spreading your investments funds across many asset categories. As an investment strategy, this will help investors balance the overall portfolio risk, volatility, and performance. The goal is to focus on a broad investment strategy that will ultimately mix together, to help you meet your financial goals, by factoring in your risk tolerance and time horizon.
commodities, and other assets. Returns of one asset class may be declining however, another asset class may be growing. If you diversify your portfolio to include many different types of assets, a market downturn or swing in one asset won't necessarily wreak havoc on your entire portfolio. It certainly doesn't guarantee a profit or protect you against losses, but it can help you manage the amount of volatility you face.
Review, Review, Review The above is of little value unless you review your portfolio on a regular basis. The main reason is to make sure that your current investments are still in line with your investment objectives and market expectations.
The Past Fund managers and individual investors have focused on four main asset classes in the past: equities, property, cash and bonds with equities and property being the main focus. The last 10 years has shown the good, bad and ugly of putting all your investment eggs in one basket.
Donâ€™t forget, the above also applies to pension investments.
Present and Future Investment managers and investors are now focusing on having THE correct asset allocation by diversification and on the ability to manage risk. The main idea behind asset allocation is that since not all investments follow a similar cycle, you are able to balance out the different risk and return cycles in your portfolio by spreading your investment among different asset classes such as stocks, bonds, property,
Sean Oâ€™Sullivan Financial Consultant
OUR TEAM Richard Riordan Managing Director Richard joined Navigation Wealth in 2009 having spent over 20 years in the investment and pension industry. Prior to joining Navigation Wealth Richard worked for Mercer for over 13 years. Richard is Qualified Financial Adviser and while overseeing the running of the company Richard in particular heads up the advisory services provided to individual, professional and corporate clients. Throughout his career, Richard has gained specialist knowledge in all areas of financial planning, investment monitoring, portfolio construction and management as well as annuities and insurance planning (life, health, disability). Connecting with his clients and developing strategies to help them realise their goals are his primary objectives. At corporate level Richard has gained specialised awareness of the Irish Pensions and Investment Industry as well as Employee Benefit fields. Richard continues to provide specialist employee benefit services to the Corporate and PLC market. Richard is a former Regional and National Chairman of the LIA and is committed to the principal of impartial independent advice. Contact Details: E-mail: email@example.com Office: 021- 4909104 | Mobile: 087 1600449
Breon Manning Financial Consultant Breon Manning joined Navigation Wealth in October 2009 as a Financial Consultant. Previously Breon worked with The Mortgage Hub and Cornmarket Group Financial Services. Breon has over ten years experience in financial services and specializes in business protection. Breon is a Qualified Financial Adviser (QFA) and is a TMITI Registered Tax Consultant. Breon also holds specialist Diplomas in Wealth Management and Pensions and is a Fellow of the Life Insurance Association of Ireland (FLIA). Contact Details: E-mail: firstname.lastname@example.org Office: 021- 4909104 | Mobile: 087 8315054
Paul Moore Financial Consultant Paul Moore joined Navigation Wealth in 2010 as a Financial Consultant. Previously Paul worked with Marsh Financial Services, Friends First, Scottish Provident and Bank of Ireland Asset Management. Paul has over 29 years experience working with clients and advising on Pensions, Investment, Financial Planning and Personal Wealth Management. Paul holds a Diploma in Marketing from the Marketing Institute of Ireland and is a Graduate of UCD and is a Qualified Financial Advisor (QFA) Contact Details: E-mail: email@example.com Office: 021- 4909104 | Mobile: 086 213 5836
Seán O’Sullivan Financial Consultant Seán O’Sullivan joined Navigation Wealth in 2010 as a Financial Consultant. Previously Seán worked with Davy Stockbrokers, Standard Life, AIB & ACC Bank. Seán has over fourteen years experience working with clients and advising them on pensions, investment and overall financial planning. Seán is an AITI Registered Tax Consultant. Education includes a Certified Diploma in Accounting and Finance, Diploma in Business Studies, the AITI Qualification and specialist diplomas in pensions, and the QFA. Contact Details: E-mail: firstname.lastname@example.org Office: 021- 4909104 | Mobile: 087 9624482
Ciaran Carroll Financial Consultant Ciaran Carroll joined Navigation Wealth in 2012 as a financial consultant. Ciaran previously worked with Thomond Asset Management National Irish Bank, Irish Nationwide and Bank of Ireland Life. Ciaran has 24 years experience in financial services in all areas of wealth management, pensions and investments. Ciaran has a B.A degree in Economics from U.C.D and is a Q.F.A. Contact Details: E-mail: email@example.com Office: 021- 4909104 | Mobile: 087 096 1950
Published by Orpen Press
Authors Jill Kirby, Neil Brooks and Sandra Gannon
The TAB group have been providing money guides for years and their annual TAB Guide always acts as a great reference book. Budget 2012 updates included, it has information on; Dealing with tax and Revenue Filling out tax returns Social Welfare entitlements Retirement planning Savings tips Debt management
Andrew McCann is a consumer advocate and a regular guest on Ireland AM (TV3) and national and regional radio. Andrew approaches knowing your rights and entitlements regarding taxation and social welfare using a unique questions and answers approach. This book is full up to date with Budget 2012 and targets areas such as; • • • • • • •
How to reduce your tax bill Simple guide to social welfare Work and Education supports and entitlements Family supports and entitlements Illness entitlements Pension and retirement entitlements Tables and worksheets
Brilliant Personal Finances
Treasure Islands – Tax Havens and the Men Who Stole the World
Author Margaret Corridan
Author Nicholas Shaxson
Published by Pearson Education
Published by Vintage Books
Margaret Corridan runs her own accountancy practice and personal financial training business. She contributes to both TV and radio in the UK and this book is clear, practical and helpful in arranging personal finances. The book provides information on: • • • • • • • •
Author Andrew McCann
TAB Guide 2012
Published by Taxation Advice Bureau
• • • • • •
Know Your Rights – Taxation and Social Welfare
Your money personality Your credit score and how to influence it Your financial choices and planning Getting the right habit Top tips Savings tips Debt management Tables and worksheets
One of my personal good books of 2011, Shaxson follows the trail of steps and measures taken by individuals and corporations to manage their tax bills. It documents the role played by international tax havens in global finance and the ability of the very very rich to pay very very little in tax. A heavy read but humorous in parts. However, Shaxson is a very experienced journalist who has written regularly for the Financial Times and The Economist.
COMPETITION To celebrate the launch of our first Navigation Post newsletter - we are offering you the chance to win a €200 voucher from the
Family Finance 2012 Author Colm Rapple Published by Squirrel Press Price c€11.95
Colm’s book needs no introduction as it has been a best seller in Ireland for over thirty years. Fully up to date with Budget 2012 it is of benefit to all.
Blue Book's divine collection of Irish Country House Hotels. Q1 On what percentage of cases do Navigation Wealth believe they can save people money? Q2
What kind of plan can insure the future of your business is safeguarded?
Who will always have a comfortable retirement?
All correct answers will be entered in a draw. Simply email firstname.lastname@example.org with your answers by May 31st 2012.
Navigation Wealth Ltd., Unit 1F/1G North Valley Business Centre, Old Mallow Road, Cork
o t k Tal day o t s u
Tel: 00 353 (0)21 4909104 Fax: 00 353 (0)21 4909105 W. www.navwealth.ie E. email@example.com