DLS Capital Manager Spring 2017

SPRING

2017 TAX BITES Sarah Keane

TOP 10 PRESENTATION SKILLS TO MOVE YOUR AUDIENCE WORK ECONOMIC & MARKET OUTLOOK - APRIL 2017 Graham O Neill

HOW TO PASS THE TORCH TO A CAPABLE GENERATION HOW TO AVOID A COMMUNICATION BREAKDOWN 5 WAYS TO BOOST STAFF COLLABORATION MEET THE TEAM

TABLE OF CONTENTS Tax Bites - Sarah Keane Top 10 Presentation Skills To Engage Your Audience Work Economic & Market Outlook - April 2017 - Graham O Neill Business Briefs How To Pass The Torch To A Capable Generation Assistance For Ireland’s SMEs How To Reduce Your Mobile Bill 5 Ways To Boost Staff Collaboration Within Your Current Structure How To Avoid A Communication Breakdown Meet The Team Range of Services

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Welcome to the Spring 2017 edition of our bi-monthly newsletter.

As always, this newsletter has a diverse range of articles which we hope will be useful to you and your business.

We would like to draw your attention, in particular, to two articles: Tax Bites written by Sarah Keane and the World Economic and Market Outlook for April 2017 which was compiled by Graham O’Neill.

If you have any suggestions for any topics you would like to see covered in our newsletter please let us know.

Please do not hesitate to contact us with any queries and we will be happy to assist you.

Dervilla and Sarah.

TAX BITES Sarah Keane FCA, CTA, QFA - DIRECTOR - DLS CAPITAL MANAGEMENT

Finance Act 2016 changes to Dwelling House Relief DWELLING HOUSE RELIEF

CLAWBACK OF EXEMPTION

Dwelling House Relief provides an exemption from Capital Acquisitions Tax (CAT) where residential properties are gifted or acquired for less than market value. If the exemption applies, then no CAT liability is payable. Up to now it was possible for a person who had occupied a property as their principal private residence for a period of three years prior to the date of the gift/ inheritance to take that property tax free.

The beneficiary must continue to own and occupy the dwelling house as his/ her main residence throughout the period of six years commencing on the date the benefit is taken otherwise the exemption is withdrawn. This retention condition does not apply to a beneficiary who is 65 years or over on the date the benefit is taken. This age threshold has been increased to 65 years from 55 years. The beneficiary can sell and replace the dwelling house during the six-year retention period without losing the exemption provided the original and replacement dwelling houses are occupied by the beneficiary as his/her only or main residence for a period which amounts to an aggregate of at least 6 years falling within the period of 7 years commencing on the date the benefit is taken.

Finance Act 2016 introduced significant restrictions to the exemption which considerably narrow its scope. The amendments apply from 25th December 2016. No transition arrangements were made. Therefore, those persons in the midst of the 3-year occupation period who had hoped to receive an exempt gift of a dwelling house no longer qualify for exemption unless the beneficiary is a ‘dependent relative’ on the date of the gift, that is, a relative who is 65 years or over or permanently and totally incapacitated.

From 25th December 2016, a very limited exemption applies to:

• A gift of a dwelling house to a relative aged 65 year or over • A gift of a dwelling house to a relative who is permanently and totally incapacitated

• An inheritance of a dwelling house which was occupied by

the disponer as his/her only or main residence at the date of his/her death, provided the beneficiary: -- Lived in the dwelling house as his/ her main residence continuously for three years immediately preceding the date of the gift/ inheritance, and -- Does not have an interest in any other dwelling house at the date of the gift/ inheritance.

The Finance Act changes clarify how the clawback will be calculated on a partial reinvestment. That is, if all the sale proceeds are not reinvested then there will be a clawback of part of the original relief granted in proportion to the amount of the sale proceeds that is not reinvested.

The exemption will not be withdrawn if:

• The beneficiary is required to reside somewhere other than the dwelling house because of his/ her physical or mental infirmity. The infirmity must be certified by a medical practitioner. This is a new requirement, or

• The beneficiary’s absence is in consequence of a condition

imposed by his/her employer requiring him/her to reside elsewhere (whether in Ireland or abroad) for the purpose of performing the duties of his/her employment. The previous legislation was restricted to employment duties performed abroad.

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DEPENDENT RELATIVE Finance Act 2016 restricts the exemption to gifts of dwelling houses to dependent relatives. ‘Dependent relative’ is a new definition: A ‘relative’ is defined as a lineal ancestor, lineal descendant, brother, sister, uncle, aunt, niece or nephew of the disponer or the spouse or civil partner of the disponer.

Rent Relief for Private Accommodation

• A relative who is aged 65 years or over at the date the

If you are renting accommodation privately (whether in Ireland or outside the State) and pay income tax, you may be eligible for tax relief on part of your rent. You can only claim this relief if you were already renting at 7 December 2010. If you were not renting on that date and you subsequently entered into a rental agreement, you will not be able to claim tax relief on your rent. However, if you were renting at 7 December 2010 you will continue to qualify for this relief even if you enter a different rental agreement after that date.

Non-Principal Private Residence Charge (NPPR)

Personal circumstances

A ‘dependent relative’ is defined as:

• A relative who is permanently and totally incapacitated due to mental or physical infirmity from maintaining him/ herself, or benefit is taken.

Tax relief on private rented accommodation is calculated at the standard rate of 20%. The maximum amounts on which you can claim relief are as follows: For tax year 2016

For tax year 2017

Single and aged under 55 years

€400

€200

Single and aged over 55 years

€800

€400

Married/widowed/in a civil partnership/ surviving civil partner and aged under 55 years

€800

€400

Married/widowed/in a civil partnership/ surviving civil partner and aged over 55 years

€1,600

€800

The relief is being phased out and 2017 will be its last year.

PRSA changes to those aged 75 or over

If you owned residential property in any of the years 2009 to 2013, and it was not your only or main residence on that date, you were liable to pay the NPPR charge of €200 per property.

This charge was not an allowable tax deduction against rental profits in these years. Recently, the High Court has ruled that the NPPR is deductible against rental profits. This means landlords will be able to claim tax relief on the annual charge, which was applied from 2009 to 2013.

However, this ruling has now been appealed by Revenue Commissioners to the Court of Appeal. Should Revenue’s appeal be unsuccessful, the years 2009 – 2012 cannot now be amended, due to the 4 year statutory time limits that apply to claiming tax refunds. Revenue have advised that until the result of their appeal is known, they will not amend any 2013 assessments or process refunds, which could result in landlords missing out if a ruling is not made until 2018.

To address this, Revenue are making available a facility on their website www.revenue.ie from the 3rd April 2017 to lodge your claim for 2013 only. This claim must be submitted in 2017.

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The Finance Bill 2016 introduced changes in the way PRSAs and RACs (Personal Pension Plans) will be treated where a person passes, or has already passed their 75th birthday. This change will impact you immediately if you are already over age 75 and have not taken benefits from any PRSAs or RACs that you hold. There is no immediate change to PRSA or RAC contracts where you are under age 75, however with the new changes introduced it will make sense to mature these contracts before your 75th birthday.

WHAT IS THE IMPACT OF THE CHANGES? Where an individual is already over age 75 and has not taken any benefits from their PRSA or RAC, the PRSA or RAC will be deemed to vest for the purposes of the Threshold limits (i.e.

Standard Fund Threshold or Personal Fund Threshold) on the date of passing of Finance Act 2016, based on their value at that date. If the individual does not return a Benefit Crystallisation Event (BCE) Declaration to the PRSA or RAC provider, within 30 days of the passing of the Act, a chargeable excess tax @ 40% will be automatically taken from their PRSA or RAC. UNVESTED PRSAS AND RACS WHERE PERSON IS UNDER AGE 75

Help to Buy (HTB) Incentive

A new Help to Buy (HTB) incentive was introduced in the Finance Act 2016. It is designed to help first-time buyers of newly built homes to assemble the required deposit. It also applies to once-off self-build homes. The Help to Buy scheme provides for a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid over the previous 4 tax years.

There is no immediate change to these contracts. Please note, if you do not mature your PRSA or RAC before age 75 the following may occur:

RULES

• You will no longer be able to take benefits from the fund

• If you are a first-time buyer who either buys or self-builds

once you pass age 75.

• The fund will be deemed to vest for the purposes of the Threshold limits at your 75th birthday.

• If you fail to supply a requested BCE Declaration to your

PRSA provider within 30 days after your 75th birthday, a chargeable excess tax of 40% will automatically be taken from your fund.

• On death after age 75 the fund will be taxed as an ARF. • The PRSA, but not RAC, will be subject to imputed distributions with no way to avoid it.

Mortgage Interest Deduction on Rental Properties Since 1 January 2009, only 75% of interest on borrowings to purchase, repair or improve a residential rental property may be claimed as a deduction against rental income. The Finance Act 2015 relaxed this rule slightly by providing that if a landlord lets a premises for three years to a tenant who qualifies for rent supplement or where the house is let to a housing authority for social housing purposes, then the 25 per cent disallowed will be given as a tax deduction in full in the year after the end of the three-year period.

The Finance Act 2016 proposes to restore a full interest deduction to all landlords of residential properties gradually over the next 4 years with a full deduction being available from 2021 onwards. In the intervening years, the amount of interest deductible will be as follows:

a new residential property between 19 July 2016 and 31 December 2019, you may be entitled to claim a refund of income tax and DIRT paid over the previous 4 tax years.

• If you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) before 19 July 2016, you will not qualify for this incentive.

• If you are buying (or self-building) the property with

someone else, they must also be a first-time buyer. You will not qualify if you have previously bought or built a property, either individually or jointly with anyone else, even if you are now separated or divorced from that person.

• The incentive only applies to properties that are bought or built as the first-time buyer’s home. It does not cover investment properties. Cash buyers do not qualify.

• You must take out a mortgage of at least 70% of the

purchase price (or, for a self-build, 70% of the valuation approved by the mortgage provider).

• If you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) between 19 July 2016 and 31 December 2016, you may qualify for the Help to Buy incentive on a property costing up to €600,000.

• With effect from 1 January 2017, the Help to Buy scheme only applies to properties costing €500,000 or less.

• You must occupy the property for 5 years from the date that it is habitable.

RATES Purchase price or valuation

Amount of relief

Up to €400,000

Up to 5% of purchase price

Between €400,000 and €600,000, between 19 July 2016 and 31 December 2016

Maximum relief will be €20,000

Over €600,000, between 19 July 2016 and 31 December 2016

No relief

Year

Interest Deductible

2017

80%

2018

85%

2019

90%

2020

95%

Between €400,000 and €500,000, from 1 January 2017

Maximum relief will be €20,000

2021

100%

Over €500,000, from 1 January 2017

No relief

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TOP10 Presentation

Skills

TO ENGAGE YOUR AUDIENCE

Every entrepreneur should know how to deliver a presentation. Most people have a fear of public speaking and even delivering a presentation - it’s right up there with moving house, spiders and death! - however, when it comes to communicating the important points and compelling your audience, practice makes perfect. Just like any other science, the art of presentation delivery can be developed, practiced and fine-tuned.

As a presenter, your mission is to make your audience feel that they are participating while you evocatively share your business’ value proposition.

Use these 10 techniques to create a perfect presentation.

Engage and Create a Hook Your power as a presenter does not lie in what you say, but in what you opt not to say.

Establish the purpose of your presentation, and use that as a guideline as to what you decide to include and exclude. Give your audience an incentive to listen by using a hook, which might be an anecdote, a video, a startling statement or a question.

A prompt to get involved will often entice your audience to become excited about what you’re about to tell them.

Jamie Oliver started his 2010 TED Talk with a strong hook that instantly captivated his audience: “Sadly, in the next 18 minutes, while we chat, four Americans will be dead from the food that they eat.”

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Foreword, Summary & Lead With Key Message Right at the start of your presentation, provide an overview of your presentation. By telling the audience what you’re going to tell them, you create anticipation. The body of your presentation explains your message in more detail and the summary at the end brings it all together.

Once you have hooked your audience, you need to keep them engaged. In most cases, presenters try to build credibility by structuring their presentations to build up to their key messages, rather than leading with it.

However, in a world of instant gratification, audiences have a limited attention span, which means that using the old approach will cause you to lose your audience’s focus before you reach the main purpose of your presentation.

Use Your Body To Convey The Message Only about 7% of what your audience learns from your communication, can be attributed to your words. The other 93% is non-verbal, which includes body language. In order to make more impact, use your body wisely: • Be conscious of your body language • Maintain eye contact • Use hand gestures

Relay an Anecdote The secret to a successful presentation lies in your ability to combine information in a compelling manner. Structure the presentation around your main message in order to prevent it from becoming muddled. Throughout the presentation, emphasise and revisit your core message to keep it from becoming muddled and to ensure that your audience understands and remembers.

People love listening to a good story, so don’t hesitate to use a personal, purposeful and impactful story to narrate your message. Most people are curious to learn and if your story teaches something, they will be enthralled. The audience will empathise and become more engaged in your presentation. If you leave it with an authoritative outcome or takeaway, they will be more likely to sign on the dotted line.

Focus on the Audience Keeping your attention focussed on the audience is crucial. Slides are great visual aids, but if you’re focusing on the computer instead of on your audience, you will lose their attention. If you don’t have an assistant with whom you have practiced, you may want to invest in a clicker. A clicker will enable you to progress the slides without disrupting your presentation.

During your presentation, include the audience to show that you are tuned into their needs. Use the word ‘you’ when you relay data. Don’t focus on the selling points without explaining how that can be of benefit to your audience if they choose to do business with you. For example, don’t say ‘‘We offer 24/7 support’’. Instead, say ‘‘We have a 24/7 call centre, which will be available to you, night and day. We also offer an online chat facility, which you can access any time. If you decide to join us, we will assign a dedicated account manager to you’’.

By leading with your most important message, you can increase the number of people who hear it. Use the rest of the presentation to build your story and gain credibility by keeping them engaged.

Keep Slides Simple Don’t distract your audience by putting up text-heavy slides.

Instead, stick with strong, emotive imagery that is light on text.

Share Your Passion If you’re passionate about your business, let it show. While you have probably worked hard in your business, it is also likely a lifelong dream. This presentation is probably a step towards fulfilling your company’s growth, and therefore, something to be excited about.

Unless you’re excited about your venture, it will be impossible for your audience to be enthusiastic.

Use the Meaningful Pause When used at the right time and with moderation, pauses can be a powerful tool. It can add drama and it may give your audience room to breathe and truly allow your message to sink in. Use a pause to allow your audience to digest the key points of your presentation.

Use Humour Depending on the type of presentation you’re delivering, humour can be a great tool for building rapport with your audience. It’s one of the easiest ways to break the ice and set your audience at ease. However, if you don’t enjoy comedy, you can still connect with your audience by showing vulnerability and letting them relate to you by telling a personal story.

Use your discretion to choose the appropriate time and topic for your humour, and remember that humour should always go up - not down. Don’t joke about your staff or clients. Selfdeprecating humour is always the funniest.

Practice Makes Perfect Some of the most prolific speakers practice their presentations literally hundreds of times. Not only is it a great way for ensuring that you know your presentation extremely well, but it is effective in alleviating any fears of public speaking.

Finally, end with a powerful conclusion and a compelling proposition and you will stimulate your audience to take action.

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April

2017

WORLD ECONOMIC & MARKET OUTLOOK Graham O’Neill - DIRECTOR AT INDEPENDENT RESEARCH CONSULTANCY LIMITED

Overview: • Macroeconomic features can dominate investment landscapes for many years • Investor regimes become important drivers of returns • After post GFC de-leveraging regime shift may be occurring • Focus on Trump’s 3Ps now changes to challenge of Donald’s 3Ds • Market rally signifies investor expectation of successful pro-growth policies • Valuations not cheap in an age of continued high leverage • Age of disruption makes forecasting even more precarious • Nationalism sees its economic expression in protectionism with localisation not globalisation • Technology continues to disrupt many traditional business models • Borders once mattered, then they didn’t, now they matter again • Events today are beyond the experience of investors or central bankers • Brexit unlikely to see rapid clarity on leaving terms • Growth in Europe surprising on upside • Chinese economy stabilised post 2016 stimulus package • World seeing first synchronised recovery post GFC with escape velocity reached • Can cyclical Donald now Trump secular stagnation • Investors hope for ‘Goldilocks’ type economy neither too hot nor too cold • Whilst this occurs markets can enjoy ‘The Best of Both’ • Back to basics approach suggest looking to win through fewer mistakes sensible strategy

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Investment Regime

Macroeconomic features can dominate the investment landscape for many years, creating what can be described as investment regimes which dominate investor returns. The 1970s saw a period of high inflation which was not only poor for equities but particularly difficult for government bond markets. The 80’s and 90’s, after Paul Volcker was appointed to the Fed, saw a long period of disinflation which was positive for both bond markets and equities. With interest rates falling, unsurprisingly government bonds delivered strong returns, whilst equities benefited from the lower discount rate that could be applied to future earnings. By the time of the noughties until the GFC the world relied on increased leverage to fuel stronger levels of growth, with these problems coming home to roost with the credit crunch which then spilled over into the ‘Great Recession’. Post the Financial Crisis there was a new regime of de-leveraging and slower growth which again was a period which generated strong returns from government bonds, but also, in no small part due to the unconventional monetary policies of the central banks, excellent returns from equities, although unusually market gains were led by defensive stocks rather than cyclicals.

This long period of austerity resulted in voter discontent, but also eventual recognition by governments and monetary authorities globally that sole reliance on interest rates to engineer a global economic recovery was misplaced. The G20 Summit in July 2016 saw a call for fiscal policy to take up some of the slack in the global economy, although this did not result in a co-ordinated proposal. However fixed interest markets quickly realised the implications of this policy change, which although gradual and piecemeal would put an end to worries over deflation and as a result government bond yields started to move higher and the yield curve to steepen.

By late summer both candidates for the US Presidency were calling for a greater emphasis on fiscal stimulus and equity markets which typically front run economic change began to see a shift in sector leadership, with financials and especially banks, together with other cyclicals, seeing a pickup in performance.

Banks in particular did not have a business model which could be profitable under a zero interest rate regime, especially when combined with a flat yield curve. The election of Donald Trump proved to be a catalyst for an acceleration of this trend which had already started to take place. Investors now need to consider whether this marks a permanent regime shift in the market and therefore a move to a reflationary theme, which will drive investment returns going forward over a number of years. If the world does move to a truly reflationary theme the sectors which led the market in the post GFC period will change, although investors should not yet take this as a long term given.

Trump & The 3Ps When Donald Trump was elected as US President we suggested that investors should consider the 3Ps of Trump: People, Policies and Personality. In general the people appointed to the cabinet have been pro business, if unconventional choices. Whilst many are billionaires, they are entrepreneurial businessmen who have achieved success through disrupting traditional business channels. They suggest a high emphasis on innovation. Policies announced to date have generally been pro-growth and there is an expectation of a roll back of red tape which has hindered businesses expanding. The Achilles heel to date of the Trump Presidency has been personality, where at times the President’s ego has stood in the way of sensible policy making.

Market Rally Equity markets globally have rallied strongly since the election of Trump, as investors have been able to enjoy both the low interest environment of the ageing policies of QE and ZIRP, combined with expectations of an improved corporate profit outlook stemming from the recent move to expansionary fiscal policies globally, but most importantly and influentially in the USA. The post Trump rally has seen significant sector rotation so the best gains have been seen in sectors that had lagged in the previous regime of disinflationary growth. To date investors believe that Trump will deliver higher growth without any of the threatened trade nasties and whilst headline valuation numbers on the US stock market appear rich, this could alter for the better with the proposed tax cuts for both corporates and individuals. Thus, although interest rates in the States are rising, they will for some time to come remain at levels which most investors would consider to be stimulatory, certainly when looking at the past 50 years of history. Thus this sweet spot dynamic, where growth is neither too strong nor too cold, a ‘goldilocks’ outlook, can continue for a while yet. Investors should remember that both in 1987 and 1999 markets kept on rising for far longer than valuation orientated investors expected and investor confidence is a powerful force.

Stock markets themselves can create their own propaganda, with rising share prices increasing not only investor, but also consumer confidence and many people react positively to higher share prices. At a time when stock markets are rising it is often hard psychologically to be under invested as greed can be as high an emotional factor as fear and there is always the prospect of missing out on future gains.

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Avoiding Predictions

Whilst some investors might believe that successful investing is dependent on forecasting, or in other words making successful predictions, in reality this is very hard to achieve with consistency. What successful investing does involve is making fewer mistakes and winning by avoiding significant losses, so assessing the balance of probabilities to take risk well is a very important part of an investor’s armoury. In today’s conditions investors need to ask themselves whether an aggressive or overly positive stance to markets is justified, or whether they should adopt a more defensive posture. Some investors might try and come to this conclusion by trying to predict how the policies of Donald Trump will unfold, or whether the negotiations on Brexit will be concluded in a speedy and timely manner. Unfortunately the answers to these questions are unforecastable and investors should also note that the two major events of 2016, Brexit and Trump, were not forecast by the markets. Even if an investor had correctly forecast both of these electoral outcomes they would probably have wrongly positioned their portfolios anyway. In this environment a more fruitful approach to investment may be to take a step back and ask what are the key big picture elements or themes in today’s environment that are likely to be long lasting and need to be taken into account when formulating an investment strategy for longer term investors.

Market Valuation By most historical standards we live in a world of over valuation and this takes into account both government bonds and equities.

Traditional valuation metrics for government bonds would see investors require a real yield or return above inflation. The old fashioned rule of thumb, which has now been forgotten, is that nominal GDP should equate to bond yields. Whilst there are many pertinent reasons why valuation methodologies for government bonds have changed, with forecasts of secular stagnation depressing bond yields, it is hard to equate today’s level of yields with any sort of pickup in inflation over the medium term.

The world’s major equity market, the United States, trades at a premium to its historic valuation averages and this is even more so when looking at cyclically adjusted earnings such as the CAPE PE: the cyclically adjusted price earnings multiple on the United States has recently hit a near two-decade high.

By Professor Robert Shiller’s measure of long-term value, the US appears to be the most expensive market in the Western world. Data from Research Affiliates show that S&P 500 stocks now sell for 29x their 10 year earnings compared with a long-

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term average of 16. Whilst the CAPE valuation methodology has been questioned by some academics and investors, it is a reminder that US equities and the cycle have come a long way since the lows of 2009.

Leverage globally also remains high with this point emphasised by a report by McKinsey and if the economic cycle does end a combination of over valuation and over leverage, when combined, have been the two principle sources of serious wealth destruction historically. The extent of excess debt and high valuations varies by sector and region with Japan, Europe, Asia Pacific and Emerging Markets more lowly valued, especially on a trend earnings basis than the United States. Furthermore, investors need to remember that over valuation in itself does not mean a market top is imminent.

High valuations are occurring at a time when global economic activity has improved significantly, with a synchronised global recovery occurring for the first time in the post crisis period.

The potential for corporate tax cuts in the States can also push valuation concerns into the background as earnings for some businesses at least may improve materially. Valuation is an excellent form of risk control and thus if economic growth did disappoint significantly, or interest rate expectations were to rise sharply, the risks of a material selloff would increase significantly.

Age of Disruption Investors also need to understand that we live in an age of disruption and this can be seen in many dimensions. By this it is meant that things are not continuing or occurring in a way that would have been described as normal in the past. Many years of unconventional monetary policy starting first with zero interest rates, followed by QE and then negative interest rates have brought about an artificial level in asset pricing. This has not only been seen in government bonds, but extended to corporate bond buying by both the ECB and Bank of England, and even the buying of equities by the Bank of Japan. As a result normal market valuation mechanisms have been disrupted. Another unusual factor of this bull market is that defensive sectors, which traditionally lag in a market upturn, have in general outperformed with the only really notable exception to this Q4 2016. In fact to the surprise of many the first Quarter of 2017 has seen a return to favour and outperformance of quality growth businesses as the yield curve in the United States has both moved down and flattened, something most investors did not expect.

Populism The Brexit vote ended up as much about the post Financial crisis recovery as a vote about the EU and demonstrated the great sense of injustice felt by electorates which was reinforced with the election of Donald Trump, a non-conventional politician.

There is the belief that those who caused the GFC have not been punished and in fact, in many cases, these have been the people who have benefitted from the policy of QE which has accurately been described as “welfare for the wealthy”. In contrast wage gains for the Western lower middle class have been muted or non-existent in the Post Financial Crisis period, punishing those who were not responsible for the excesses of the noughties.

Hence the rise in populism. Donald Trump’s slogan “Make America Great Again” is a combination of nationalism tinged with nostalgia which is a very potent and appealing mix to many.

Protectionism is the economic expression of nationalism and has resulted in globalisation giving way to localisation. Thus disruption is also very evident in the way the political process is being run, with Donald Trump’s style and behaviour very different to conventional Republican policies which has the continuing potential to wrong foot investors.

Technology Technology is also having a disruptive impact on many traditional business models with the ‘Prime’ example, if investors can excuse the pun, of Amazon which has disrupted traditional retail across a much wider part of the market than just books.

A large number of retail outlets in the States are now being forced to close, with knock-on effects on other companies such as property owning Reits. Uber has disrupted the taxi market globally, even as yet without driverless cars. Tesla is threatening to disrupt traditional fossil fuel car producers and there are potentially far reaching implications for society in general through automation and robotics together with artificial intelligence, which could hollow out middle class jobs and pose a further threat to living standards and employment in the West. These disruptive businesses have made stock selection increasingly more difficult as traditionally safe businesses have now become far more risky.

Borders Geopolitics have now become much more important to investors and it would be true to say that ‘Borders once mattered, then they didn’t, now they matter again’. Those with long memories will remember the Cold War period when there were also trade tariffs in place, with the fall of communism symbolised by the collapse of the Berlin Wall, ushering in a period of globalisation with a so called peace dividend boosting global economic activity. There is now the threat of this going into reverse with the potential for both trade and military tensions.

strong man leader, President Xi and with this a significant year in the Chinese electoral cycle, little potential for the President to appear to be weak. The militarisation of artificial islands in the South China Sea is increasing regional tensions and unsurprisingly has been noticed by the United States with potential remaining for some form of conflict if skirmishes got out of hand. Russia has also looked to expand its sphere of influence into the Middle East, believing that Western countries no longer want to put troops on the ground due to the fear of bodies returning home in bags. Once again this is a gamble on the part of Russia which could yet backfire.

There is now the belief that America is retreating from its previous global role, something which has been referred to as isolationism, but in fact could be more accurately described as unilateralism with America going back to the original foreign policy ethos of the Monroe Doctrine (1823), which stated that America would still protect its power where it believed it to be in its national interest. The US is now reverting to an America first policy, not trying to represent the liberal interest of the entire world.

The threat from North Korea continues to increase with this country likely to have the ability to launch nuclear warheads capable of hitting the United States over the next couple of years.

The US has already announced this to be unacceptable and to date sanctions imposed on Korea have been backed by China, including the restriction of coal exports. Any deterioration in relations between China and America could see North Korea used as a bargaining chip by either country with the potential for military engagement if lines in the sand are drawn.

Thus in summary geopolitical tensions are likely to rise with the possibility of geopolitical issues becoming intertwined with threats to free trade. We have already seen at one stage America threaten to walk away from the One China Policy universally adopted by the West as an attempt to put trade pressure on that country. This was a naive move by the US President, as the Chinese will never be seen to lose face, an important part of their culture, especially after a history of foreign humiliation.

The Chinese Communist Party repeatedly states the mantra that a divided China is a subjugated China and Trump will need to understand the cultural differences between the two countries to successfully renegotiate trade agreements.

In summary in an era of disruption, it becomes harder to be confident on how events and their timing will unfold, with instability likely to increase. Investors need to realise that what is happening today is beyond the experience of most, if not all, money managers, together with central bankers, so the potential for mistakes and unintended consequences has increased. This in itself argues for a diversified and balanced approach when investing client monies as it will be easy to be wrong footed.

The threat from ISIS and terrorism continues to persist and this is likely to disrupt some parts of the economy for many years to come. In addition to this China is now flexing its muscles as an emerging superpower, with the election there of another

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Brexit

Europe In Europe itself growth has accelerated with broad economic indicators such as PMI’s positive across the region with Germany, Northern Europe and certain peripheral nations such as Ireland and Spain showing a strong economic recovery.

The laggards are Italy and Portugal. The ECB is now under pressure to taper bond purchases by northern European central banks and it is likely that significant pullbacks to the bond buying programme will occur over the next 12 months.

Overall, however, monetary policy will remain stimulative, with the market pricing in no actual rises in interest rates until 2019. The valuation of European equities versus the US remains attractive, as long as the upswing continues as Europe is typically a higher beta market than the States.

China On March 29th the British government notified the EU of its intention to leave with a formal letter. It was an unfortunate way to celebrate the EU’s 60th anniversary. Even if exit negotiations go well, the decision will have huge consequences both for the EU and the UK. The risk for the UK is that economically it will lose favourable access to by far its biggest market. Political stresses will be created inside both the UK and Ireland. The UK will no longer have a strategic role in EU Councils where it has often been the leading voice on liberal economic values, sometimes backed by Germany. In the new EU Germany is likely to dominate. As regards trade there is evidence that the length of supply chains matter, which would make replacing EU trade with that elsewhere in the world more difficult. The UK has been a substantial beneficiary of frictionless cross border trade which the EU has allowed.

Whilst it will be some time before the outcome of negotiations is determined, it is clear that they are going to be complex and difficult, with on one side 27 individual nations having to agree.

The first step will be to agree details on the money owed, treatment of citizens and shared institutions. This will have to be settled before the nature of future trade arrangements is decided. The UK has financial obligations to the EU which has come from more than four decades of membership, so honouring these is the sensible and right thing to do. Whilst some in Britain have stated that no deal for Britain is better than a bad deal, no deal is likely to be extremely negative for both sides.

To date both ‘Brexiters’ and ‘Remainers’ can make political points about the performance of the UK stock market post the Referendum. The UK economy is growing and share prices are higher, but this masks a substantial Sterling devaluation which in the shorter term has reduced the real gains from UK assets and in the longer-term has detracted from the purchasing power of the population. The exact outcome of the negotiation process will take some time and in all likelihood full detail will not be worked out within the two year period.

There is also the impact of devaluation on UK inflation and what effect this will have on monetary policy, and therefore the broader UK economy.

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In China growth has re-accelerated post the 2016 stimulus package with both service and manufacturing PMI’s above 50 indicating expansion. Significantly producer price inflation, which had been negative for a long period of time, sending deflationary impulses across the whole global economy, has turned positive and is running at around +7% year on year. It is clear that Chinese consumers once again have money to spend and outbound tourism remains strong, together with retail sales continuing to grow in the low double digits which although slower than a few years ago, signifies healthy increases in disposable income, certainly compared to the developed world. This year sees the autumn Party Congress and China is therefore in the middle of its electoral cycle and President Xi will need to demonstrate strength ahead of political changes.

This suggests that not only will the economy remain strong, but China will need to be seen to stand up to any external foreign policy threats which could increase tensions with the United States where another strong man leader has been elected.

It is generally acknowledged that Chinese GDP is a made up number. This explains how 2016, which all the evidence shows was a strong year for the Chinese economy, recorded lower growth than 2015. Clearly this is a myth. The Chinese economy was strong in 2016 due to government policy. China started 2016 with commodity prices low, and the government were worried about weakness in coal and bad debts. Whilst lending has happened this year, it has generally been in the right places such as mortgages or on infrastructure spend. The authorities in China also looked to control supply in coal and steel and as profitability was low companies were happy to go along with supply cuts. This year, although the government in China has taken the foot off the accelerator, they have not yet begun to tighten policy. However, the overall policy stance is likely to be less expansionary in 2017 than 2016.

A further question is whether supply side reform will be difficult to enact, with many basic industry companies now recording strong profitability. In contrast to a year ago Chinese business owners can see that it is paying them to increase supply and production. Longer term strong reform will be necessary post the Party Congress. In fact ironically any pressure from the US administration on trade might actually re-accelerate the reform process, as China would be forced to focus on internal reform.

At the Party Congress it is likely that Wang Qishan the current anti corruption Tsar will be reappointed to the PBSC, even though he will be older at the time of the Congress than 67, the normal retirement age by protocol, although not by decree.

Wang is a reformer and has a good understanding of economics and was considered to have helped guide China through the GFC. This measure will also pave the way for President Xi to serve a third term as age would no longer preclude him.

Synchronised Recovery

The world is today seeing a global synchronised recovery for the first time since the Financial Crisis. As a result the era of ultra low interest rates and low inflation is likely at an end. Worries about deflation are giving way to worries about inflation. This picture was already emerging pre Trump as markets accepted some degree of fiscal support was likely and necessary, rather than the previous complete reliance on monetary policy if faster growth was to be achieved. The world does now seem to have achieved “escape velocity” from the GFC. Whilst the policy shift was evident in a number of countries, Trump’s plans for infrastructure spending and tax cuts will reinforce and accelerate this further in the US, an economy which is already showing signs of growing strongly looking at the labour market. There is also evidence of some pickup in wage inflation in the States and sharply higher oil prices year on year are impacting on inflation globally.

Regime Shift?

The issue for investors now is whether cyclical Donald can Trump secular stagnation. In other words, will the boost from these more pro-growth policies being put in place globally be sufficient to overcome the secular headwinds of high debt (which according to McKinsey is higher than during the Financial Crisis) deteriorating demographics from an ageing population who will be forced to save more and budget deficits. We have gone from a world where deficits seemed to matter and bond vigilantes could force governments to adopt austerity programmes, to one where this is being ignored by the markets. If stimulus packages result in higher growth and therefore a higher tax take, the market is likely to remain relaxed, but signs of a slowdown in growth could force investors to re-focus on deficit issues. Thus there are longer-term forces bearing down on demand, something that has been labelled “secular stagnation”. Within this there can always be shorter term cyclical pickups and this actually happened in Japan during the 2003-2006 period which saw 10 year bond yields increase from 0.5% to 2.0%. It is therefore quite possible that the US and in fact the global economy can experience a shorter term cyclical uptick in growth, within an ongoing environment of secular stagnation which is likely to keep interest rates below what would be considered normal levels for a peak in the cycle.

While higher growth might seem positive for equities, this will only be the case if the resultant rise in interest rates is not sufficiently large enough to impact on asset prices through a higher discount rate applied to future earnings. If 10 year bond yields in core countries rose to the 4% level, this would provide many investors with what they would consider as an attractive level of yield versus equities.

Whilst Trump was clearly elected on a pro-growth agenda, much of this voter base came from outside of the traditional Republican camp. The current administration’s pro-growth policies therefore have to survive the Congressional process in order to be enacted and Republicans may be wary of increases in the budget deficit. There may well be some further concerns now Obamacare has not been repealed and so government cost savings in this area have been deferred.

In the near term failure to get pro-growth policies such as tax reform through Congress would damage equity markets, whilst longer-term a strong fiscal boost could push the US economy into overheating and a sharp rise in interest rates could de-rail both the bull market and economic recovery.

Investors will be hoping for a middle course, or in other words a ‘goldilocks’ type economy where growth is neither too hot nor too cold, but the potential for variance around this central case at either extreme has risen.

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US Bull Market The US equity bull market on March 15th became the longest on record, surpassing the 1921-29 period. This in itself is not necessarily bearish if the economic background is supportive and valuations are not extreme. On the positive side it could be that economies after a very sluggish post crisis recovery period, which especially outside of the States saw a number of fits and starts, is now entering a more normal cycle. Easy monetary conditions and better credit transmission has resulted in a global synchronised recovery and corporate profit growth is expected to be strong this year as a result.

Even though interest rates will rise in the States, levels will remain below those which have historically de-railed equity markets. The negative point against this is a starting valuation which is not normal, but has in fact been elevated by unconventional monetary policy such as ZIRP, QE and then NIRP. Thus markets through PE or multiple expansion have front run the economic recovery to a much greater extent than would be usual at the time of the first couple of interest rate rises in the States. There has been a long bull market which may well have bred complacency in some investors. In fact research by Ned Davis shows that the typical period for the US market not to suffer a 20% correction is 625 days, but in secular bull markets this rose to 1,105 days. At the time of writing there have been over 2,000 days for S&P 500 without a 20% market correction.

At elevated valuation levels markets are always vulnerable to bad news as and when it occurs and bad news for the markets usually arrives in the form of an unknown unknown.

GRAHAM O’NEILL Director at Independent Research Consultancy Limited.

Graham is an investment researcher of international note and has been working in this area for over 20 years. He began his career in the stock broking industry before becoming an institutional fund manager where he practiced both in Ireland and the UK where he worked in senior roles with a number of institutions including Royal Life holdings, Guardian Royal Exchange and Abbey Life.

Throughout his career, he has managed multi-million Euro funds and developed innovative investment fund concepts. Seeing the need for non biased, critical analysis of the investment industry, Graham began work as an independent investment researcher in 1992 and since then, principally, he has provided services to financial institutions. Graham is also a director of RSM Group, a leading UK investment research company.

Through his research process, Graham filters through the broad range of Irish and International investment fund managers for those investment managers who consistently perform best.

He conducts in the region of 150 teleconference meetings and on site interviews with asset managers in UK, Europe, China, Hong Kong, Singapore and Australia. Following on from these meetings, Graham produces detailed research notes.

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SUMMARY

For now markets are betting that “good” Trump will triumph over ‘bad’ Trump with pro-growth policies being enacted but none of the trade nasties or protectionist agenda actually being fully implemented. Market participants are hoping that the threats issued by Trump are merely that, and an opening shot in a bargaining process from a businessman rather than diplomat or politician, with the aim of securing fairer trading relationships for the US. The former Governor of the Bank of England, Mervyn King, in his recent book “The End of Alchemy” stated that investors are now in a world of “radical uncertainty”. In other words in an age of disruption in many facets of life it is harder and in fact virtually impossible to forecast the future with confidence. As stated no investors have lived through circumstances similar to those which have occurred post the GFC. The potential for extreme outcomes or what investors call “fat tails” has increased.

The current sweet spot for equity markets may persist for a while yet, with investors and markets enjoying the “Best of Both” with economic and profit growth accelerating at a time of still abundant liquidity due to easy monetary policy and QE by certain Central Banks. This situation is unlikely to last forever as either higher growth will lead to a rise in interest rates, or a fall back to secular stagnation will lead to disappointment on the profits front. Over the next few years even if markets make further gains there is likely to be some form of multiple contraction with PE ratios coming under pressure, meaning market rises will lag earnings growth.

Successful investment is more a risk management game than the ability to forecast the future where crystal ball gazing rarely produces success over longer time periods. In today’s environment investors should proceed with caution and hold pragmatic diversified portfolios, accepting the possibility that future events could necessitate a rapid change of tack. Investors should remember over time a ‘back to basics’ approach concentrating on fundamentals, sentiment and valuation will result in winning through fewer mistakes being made. One tool mitigating against the effects of full market beta will be strong fund selection. Absolute return continues to have a place in investor portfolios, although recent evidence shows that in a sector reliant on manager skill easy gains are not possible.

Within fixed interest strategic type funds have the potential to avoid duration related losses if inflation picks up in a material way.

BUSINESS BRIEFS SERVICES SECTOR EXPANDS AGAIN ON BACK OF NEW EXPORT BUSINESS Activity in Ireland’s services sector continues to expand with the pace of new export business jumping to its highest level in nearly a year. Investec’s latest purchasing managers’ index (PMI) for the services industry fell to 60.6

IRISH ECONOMY ON COURSE TO OUTPACE EURO ZONE FOR FOURTH YEAR IN A ROW Ireland looks set to remain the best-performing economy in the Eurozone for a fourth year in a row, despite escalating fears over Brexit. The fresh outburst of optimism follows a survey of economists by Bloomberg, which showed the consensus growth rate for 2017 has risen to 3.5% from an earlier prediction of 3.1%.

IRELAND TARGETING €26BN IN ANNUAL INDIGENOUS EXPORTS BY 2020 The Irish Government has launched its new trade strategy, Ireland Connected: Trading and Investing in a Dynamic World. This strategy is the successor to the previous Trade, Tourism and Investment Strategy, which ran from 2010 to 2015 and saw extraordinary success despite low growth in the global economy during that period.

It sets ambitious targets for Ireland’s exports, foreign direct investment, tourism and international education.

The new strategy aims to deepen Ireland’s economic resilience and responsiveness in the face of highly changeable global conditions by intensifying the business development activity in existing markets and diversifying into new regions. The aim is to reinforce Team Ireland’s

in February, but this was still well above the 50 mark that separates growth from contraction.

The report showed that customer demand remains very healthy, with the rate of growth in new business once again coming in much stronger than the series average, while the pace of expansion in new export business quickened to the fastest since July 2016.

The continued influx of foreign investment, combined with soaring employment levels and robust retail sales figures have fuelled expectations the potential ill-effects of Brexit won’t be felt for at least 12 months.

Eoin Fahy, chief economist of KBI Global Investors, pointed out the improving performance comes against the backdrop of a stronger global economic outlook and predicted the Irish economy could expand by 4% this year, far exceeding the Central Bank’s expectation of a 3.3% growth rate. He said while Brexit is a ‘‘definite negative’’ and likely to cause ‘‘material disruption’’, he noted that the impact of the UK’s departure from the EU may not be felt until mid 2019.

agility and capacity to respond to the dynamic global environment. The strategy hopes to generate 30,000 more jobs in tourism by 2020 and €5 billion in overseas tourism revenues by 2025. It also hopes to increase Ireland’s indigenous exports, including food, to reach €26 billion by 2020 – up by 26% from 2015.

Furthermore, the strategy hopes to increase value to the economy with an uplift of 25% spend in the economy from Enterprise Ireland supported companies and a 20% uplift from IDA Ireland supported entities. With regards Brexit, the report aims to intensify and diversify 80% of indigenous export growth to 2020 to be outside of the UK market and maintain exports of at least €7.5 billion to the UK. It also hopes to secure 900 new foreign direct investments in the period 2015-2019 and to increase the number of our Irish owned companies of scale by 30% seeing a greater number exceed turnover thresholds of €3 million, €20 million and €100 million.

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HOW TO PASS THE TORCH TO A CAPABLE GENERATION You’ve spent a lifetime building your business. The process of succession has many challenges, and passing on the torch is a challenge for many business owners. Many founders have a legitimate fear that their children may not run the family business as well as they should. How do you ensure that your legacy and relationships stay intact?

Most often, the importance of succession is shrugged off or not prioritised. Founders often have a hard time letting go of their businesses and allowing the next generation to take over the reins. Unfortunately, it’s this fear - hidden or obvious - that can thwart even the best preparation.

Recent studies have shown that a succession steering committee can provide an effective means for formalising the succession process. A steering committee should be made up of senior management and board members, and its main function should be to manage the governance and succession process. This will allow business founders to be confident that they are handing over the organisation to a capable next generation.

Successful succession depends on everyone’s commitment to the following: • Avoiding emotional conflicts among family members.

• Avoiding any empty threats or promises.

• Avoiding prioritising gender or birth order over capability or dedication to the business.

Generating rivalry among siblings poisons the business, so it is important to avoid that at all costs.

Siblings in Business Research has shown that adult children whose parents have passed away typically become closer in a bid to eliminate competition and survive.

Of all Irish businesses, three-quarters are family owned and operated and that offers many benefits, including: • shared vision; • a shared understanding of the business dynamic; • emotional attachment to the business.

These benefits are developed over a lifetime, and bode well for the success of the business. However, it is not without challenges to the business. Unreasonable competition, self-esteem issues and learned behaviours are some of the threats family businesses face.

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How to Develop A Greater Sense of Good in a Family Business The key to successfully passing on the torch, is to develop a sense of greater good - summum bonum - early on. Encourage all the family members to direct their focus towards the greater good of the business, namely improvement and innovation.

You can develop a sense of summum bonum by encouraging all family members to first work elsewhere before joining the family business. By doing this, it makes joining the family business an option rather than an obligation and removes any potential resentment.

Eventually, when a person decides to join the family business, he or she will have independently gained a wealth of experience and knowledge. While giving each sibling the time and space to find their own niche, the family business will enjoy the benefit of a broad base of ability and experience.

Sometimes, family members have trouble working together and sharing common space. The Dassler brothers were both shoemakers who ended up in a bitter feud, only to become enemies and major competitors. Each founded their own competing brand - Puma and Adidas - upon going their separate ways.

Allow family members to identify their own natural strengths and encourage them to advance and excel in their respective areas in order to avoid internal rivalry.

It would be worthwhile to ask each family member to write down his or her goals, categorising them by short, medium and long-term. Using this as a guideline, it will help with planning the company’s future path.

Encourage Open Communication Siblings in business should consistently work at promoting open and honest communication. It’s about more than just keeping your sibling in the loop regarding updates and daily discussions; it’s about multifaceted, meaningful communication that involves a family forum approach and allows an equal playing field where both participants can bring bigger issues to the table.

During a clash of opinions, parties should be able to talk privately in a professional manner without having to involve other staff members.

Furthermore, open communication will involve still being a family when you’re both off the clock. It means making time to do things together on a recreational basis.

Governance in Defining Roles

Communication is important when it comes to speaking about the business and siblings in front of your children - who will one day succeed you in the family business. Avoid detailing your family members’ arguments and mistakes and do remember to mention achievements and positive interactions.

Reinforce stability by defining each individual’s role and providing exact descriptions of responsibilities within the realm of the family’s shared vision for the business.

Unfortunately, second-generation failure is a frightening reality experienced by a large percentage of businesses. By setting up clear communication expectations, you can avoid this common pitfall.

Corporate governance documents should clearly outline the rules and the company’s chain of command. This will provide a guideline for settling conflicts in a decisive manner.

Communication can ensure that your family business flows freely and works efficiently. Siblings working side-by-side can provide a productive and satisfying environment for success.

Another important factor to agree upon and to set out in the document, is the process of including spouses in the business as it can lead to controversial managerial issues. By agreeing on the terms of these issues in advance, it will set the tone for fair treatment and everyone will have an understanding of how things work.

While it may be an awkward topic to broach at first, it is well worth the effort to discuss and draft a blueprint that is in the best interest of the family business. Discussing the ways in which everyone can succeed together is key to a happy working environment.

Separating Family From Business Hosting regular ‘‘family forums’’ will give family members the opportunity to address any conflicts, issues and arguments outside of the business. Ideally, these meetings should be put on the calendar to ensure they do take place.

At the meetings, each person should be afforded the opportunity to have his or her voice heard. Encourage open discussion, but keep a few rules: • Each individual must be clear and honest about his or her issues.

• Nobody may use any inappropriate or hurtful language and certain phrases should be banned, such as ‘‘you’re so bossy’’ or ‘‘you’re Dad’s favourite’’.

Outside of the family forum, everyone should liaise with staff and family members in a professional tone. There should be no room for family language in business conversations in order to help prevent learned emotional behaviours.

Conclusion: SUCCESSION PLANNING TIPS »» Include as much dialogue as possible into the planning process to ensure fair, transparent and effective succession planning. »» Clarify the company’s vision and future together with other family members as an effective first step in combining the vision of the company with the skills of the family members. »» Create a diagram featuring each staff member’s name, job title and family connections to get an idea of what the business structure may be once the owner has left. It will also enable everyone to focus on the best solutions to the many questions resulting from succession. »» Rather than stepping down bluntly, allow the outgoing MD to gradually relinquish control. He might progressively step away by becoming a non-executive director or chairman, or take on another separate role. »» Discuss the process of succession early on with the next generation, and empower him or her by providing opportunities for development, coaching and providing support. This is also a great opportunity for implementing new and innovative ideas. »» Keep staff, suppliers and customers abreast of the current MD’s plans to relinquish his or her role to the new MD. Introduce them to the person who will be taking over the role and communicate proposed changes and the company’s new vision in advance in order to maintain credibility and relationships and to prevent stakeholders from losing confidence in the company as the result of change of leadership.

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SMALL & MEDIUM ENTERPRISES In this time of uncertainty, Ireland’s Small & Medium Enterprises need a helping hand more than ever and the Irish Small and Medium Enterprises Association offers access to a variety of resources from state agencies in order to assist companies.

This is just some of the support that has become available, providing diversification and growth to the sector.

In the past, state agencies offered a narrow focus in terms of support, but it has grown in terms of nature, structure and design.

Statistics show that Irish SMEs employ 70% of the workforce and it is widely accepted that they should be assisted as much as possible to become more resistant to economic turbulence.

The Irish Small and Medium Enterprises Association (ISME) offers a website - isme.ie - with a handy tool which provides helpful information and links to in excess of 80 governmentprovided business support tools. In addition, it provides information on employment schemes and financial support.

Find out what your SME qualifies for by completing the online form at supportingsmes.ie - an initiative by the Department of Jobs, Enterprise and Innovation. By providing your industry and location and the type of assistance you require, the site will provide a list of potential supports for which you qualify.

Most of the supports - advisory, practical or financial - are provided by state-aided initiatives, such as the Local Enterprise Office (LEO) and Enterprise Ireland. However, smaller area or sector specific bodies may also assist businesses in getting on their feet or reaching the next level.

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Local Enterprise Offices act as the first port of call for new businesses and have become a key tool for small and medium enterprises taking their first steps in the business world.

LEOs provide direct financial support to micro-businesses (companies with up to ten employees) who adhere to four specific criteria, in the form of grants. Amounts are based on the geographic location of the applicant businesses.

Feasibility study grants of up to €15,000, or 50% of the investment, are available to companies in the eastern and southern regions. Up to 60% of the initial investment is available to companies in the western, midland and border region.

LEO’s funding may be used to cover prototype innovation, consultancy costs and market research, or to provide a salary to business owners during the critical early stages of entrepreneurship.

Startups may also apply for priming grants of a maximum of €150,000 or 50% of the original investment - whichever is the smaller amount during their first 18 months in business.

Enterprise Ireland approval is required for grants equaling more than €40,000.

Business Expansion grants from LEO are available to SMEs that have established a firm foothold in international trade or manufacturing. This grant is also worth €150,000 or half the investment, and may cover general overheads, consultancy or marketing costs, capital items and salary costs.

Unsecured loans range from €2,000 to €25,000 are available to applicants with a turnover of less than €2 million.

Online trading voucher schemes were designed with SMEs who sell their products overseas in mind. These schemes offer financial support amounting to €2,500, plus advice and training to help businesses acquire the skills to trade online.

Initially devised during the recent economic downturn, this scheme is aimed at helping SMEs that have been otherwise unsuccessful in securing financing from other lending institutions. However, LEOs offer several other services in addition to funding. They are uniquely placed to provide accessible support to local SMEs, pointing them in the right direction and providing training courses and mentoring assistance.

Once a business starts to grow and build, Enterprise Ireland guides them through the various stages of development. It’s High Potential Start-up (HPSU) scheme provides assistance from the early stages of development of new and innovative products and services on the international market. This scheme has the ability to generate export sales to the value of as much as €1 million in the first 3-5 years and generate ten jobs in the process.

HPSU works in conjunction with Ireland’s Institutes of Technology locally to bring clients the New Frontiers Development Programme, which offers supports ranging from a €15,000 scholarship payment, to mentoring, and incubation space to accelerate business development and to provide business owners with the contacts and skills they require to successfully launch and grow a business. This programme provides a unique blend of empowering and hand-holding to sensibly support new businesses.

Enterprise Ireland does not only support new businesses. It also provides funding for established SMEs that employ 10250 people and can show an annual balance sheet of below €43 million or an annual turnover of less than €50 million.

Included in these supports is a company expansion grant that incorporates a job expansion fund. Up to €150,000 of this fund can be used to recruit new staff.

A €5,000 innovation voucher enables companies to work with registered knowledge providers or colleges in exploring technical problems or business opportunities.

Other funding options range from business and product process improvements to management team enhancement and the development of internationalisation supports, market research and more.

Enterprise Ireland recently launched a new Competitive Start-up Fund (CSF) that totals up to €750,000. The CSF supports startup activities in a variety of sectors.

With so many offers available to the small and medium enterprises, there is every reason for your business to succeed.

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HOW TO REDUCE YOUR MOBILE BILL At some point or another, we all receive a mobile bill that shocks us to the core.

By becoming smarter about your smartphone use and choosing a plan that suits your needs, you can easily reduce your costs.

1

MAKE SURE YOUR PLAN MATCHES YOUR USAGE

If you are a data-heavy user and you can afford it, buy an unlimited plan that covers all your needs, or one that has a larger data allowance. There is no point to having a plan with 1 or 2 GB of data if you use a lot of data. The same applies to texts and calls.

Keep an eye on your usage, because out-of-bundle costs quickly add up.

Expert Tip: Use an app such as KillBiller to help you figure out the best plan for you based on your usage

2

USE OVER THE TOP (OTT) MESSAGING SERVICES TO SEND MEDIA

Most plans include a certain amount of text messages, but they usually charge extra for multimedia messages that contain photos or videos. You may end up paying between 25-70c extra, depending on your network charges.

Instead, use a third-party app to send images and other multimedia messages via WiFi at home or while you are abroad.

Save Money on Your Phone Bill With Whatsapp Whatsapp is owned by Facebook and you can use it to send encrypted messages to other users. Create a contact using their phone number and send text messages, images, videos, voice notes and documents without having to worry about it being intercepted by third parties.

Whatsapp is free to download on Android and iOS and can also be used on your PC’s web browser, provided your smartphone is powered on and has a data signal.

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WAYS 5 to BOOST STAFF COLLABORATION

Within Your Current Structure

In the past, we were taught that in order to encourage staff to collaborate, we had to provide more incentives. However, it is possible to encourage collaboration even when you don’t have the resources to change organisational structures.

Here’s how:

1

KNOW WHEN TO PUSH FOR COLLABORATION

When you push staff to collaborate on every minor detail, you open yourself up to more issues. Instead, focus on fostering collaboration only on the more complex activities where input from multiple subject experts is required. Include those specialised staff members without whom the project could not be completed.

2

PERSUADE THEM USING QUANTITATIVE EVIDENCE

Look for internal sales data as evidence that smart collaboration is good for more than just company morale, but that it offers strategic advantage that can drive the team to capture market share.

3

CREATE GREAT RELATIONSHIPS

One way to reduce the cost of collaboration, is to encourage beneficial relationships early on. Pair experts with people who could use assistance, thus creating personal relationships that will make uptake more likely.

4

CREATE HEALTHY COMPETITION

Celebrate advances that result from collaboration to stir up healthy rivalry among their peers. Use friendly contests and small awards as incentives to encourage people to move in the right direction.

5

SPEED UP THE RESULTS

It can take a while before you reap the financial benefits of collaboration, so it makes sense to reward employees’ inputs during the beginning phases of new collaborative processes.

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HOW TO AVOID A COMMUNICATION BREAKDOWN We have all been there - the infamous communication breakdown. Recovering from a communication meltdown can often be harder than avoiding it in the first place.

It could happen when your agenda backfires. By the time you break away from the conversation, the tension could be cut with a knife. These conversations tend to weigh heavily on a person, adding more pressure to an already heavy workload.

It’s much harder for some people to recover from a breakdown in communication, as it tends to devour much more time and emotional effort than it would’ve taken to avoid it.

Since it is not always easy to ignore a person or a topic, it may help to follow these three tips to help prevent communication breakdowns.

1.

BE PRESENT

Let’s face it - life is hectic. We have more communication channels than ever and we are constantly bombarded with calls, messages and emails.

During meetings, pay people the respect of putting your phone on airplane mode and turning away from your computer.

If you find it hard to get out of multitasking mode, stop what you are doing a few minutes before your meeting and take a moment to meditate, do breathing exercises or a couple of quick yoga stretches.

2.

LISTEN ACTIVELY

You may not be curious initially, but try to be genuinely interested in what is being said.

Listening involves paying attention to the other person’s body language. See if he or she becomes more animated during specific points. By tuning in to his or her perspective, you will be able to reach an mutually beneficial agreement.

By listening more and being curious, you will be better able to navigate the conversation and frame your response. Tune into topics that stir passion in your colleague.

Active listening will move your conversation forward in a more constructive manner.

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3.

OPEN UP

Effective communication is merely an exchange of viewpoints and often involves opposing positions. It can be difficult to find common ground if you don’t try to see things from the other person’s perspective. To find common ground, you have to listen actively and try harder to consider the other person’s position.

Sometimes, open mindedness can cause you to risk being proved wrong.

The American educator, Stephen R. Covey said ‘‘Most people do not listen with the intent to understand. Most people listen with the intent to reply.’’ Do you ever find yourself thinking about your rebuttal while someone is speaking? Don’t interrupt - rather be open to the other person’s perspective.

Instead of worrying about coming up with the perfect response, say that you have not given that any thought, and ask for a day or two to consider it.

Being open-minded and listening attentively to others, will help cultivate trust in the long term, as they will develop a sense of psychological safety. Over time, you will realise the importance of this in building successful teams.

Taking risks and speaking up may just be the difference between avoiding a mistake or learning from your experience. At the end of the day, everyone wins.

MEET THE TEAM Dervilla Whelan

Sarah Keane

(BBS, CTA) Managing Director

(BAAF, FCA, CTA, QFA) Director

Dervilla Whelan is the Managing Director of DLS Capital Management Ltd and also one of the founding members of DLS Partners. She was previously a taxation partner in Baker Tilly O’Hare (now part of Baker Tilly Ryan Glennon) and is a graduate of Trinity College, Dublin and the Institute of Taxation in Ireland. Her key skills include advising clients on all aspects of their financial affairs, including advising on the appropriate structures required for all types of investments and pensions. Dervilla is heavily involved in the Family Office service for our high net worth clients.

Dervilla’s involvement with both DLS Capital Management Ltd. and the tax practice, DLS Partners, ensures that her clients benefit from a holistic approach to all of their financial affairs

Sarah Keane is a graduate of Dublin City University in Accounting and Finance and a Fellow of the Association of Chartered Accountants (FCA).

She is also a member of the Institute of Taxation in Ireland (CTA), and the Professional Association for Financial Services in Ireland (QFA). Her key skills include advising clients on all aspects of financial planning, including retirement planning strategies, taxation and investment advice.

Sarah is highly experienced in the preparation of investment financing strategies for individuals and companies. Sarah is also heavily involved in the Family Office service for our high net worth clients.

Graham O’Neill

Stephen Cahill

Graham is an investment researcher of international note and has been working in this area for over 20 years. He began his career in the stock broking industry before becoming an institutional fund manager where he practiced both in Ireland and the UK where he worked in senior roles with a number of institutions including Royal Life holdings, Guardian Royal Exchange and Abbey Life. Throughout his career, he has managed multi-million Euro funds and developed innovative investment fund concepts. Seeing the need for non biased, critical analysis of the investment industry, Graham began work as an independent investment researcher in 1992 and since then, principally, he has provided services to financial institutions. Graham is also a director of RSM Group, a leading UK investment research company.

Stephen Cahill is the Tax Manager at our Tax Practice, DLS Partners. He graduated from DIT and is a member of both the Association of Chartered Certified Accountants (ACCA) and the Irish Tax Institute. Stephen is responsible for all areas of Tax, including, VAT, PAYE, Income Tax, CGT and Corporation Tax. He also is involved in the preparation of Financial Accounts for sole traders and limited companies and assists in the preparation and review of monthly management accounts for larger corporations.

Independent Consultant

(BSc (Marketing), ACCA, CTA) Tax Manager DLS Partners

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RANGE OF SERVICES RETIREMENT PLANNING

FINANCIAL PLANNING

•• •• •• ••

•• Financial Planning is central to our

Tax-effective funding for retirement.

Income Planning for your retirement Personal Fund Threshold calculations Protecting the underlying value of your pension fund throughout retirement •• Advice on the most tax effective drawn down of your pension vehicles •• Taking transfers from Defined benefit Pension Schemes

PENSION STRUCTURE ADVICE •• Personal pensions •• Self Invested Personal Pensions •• Company/Executive pensions

- Defined Benefit Schemes - Defined Contribution Schemes •• Small Self Administered Schemes •• Personal Retirement Saving Accounts (PRSA’s) •• AVC’s

service offering

•• We compile fact finds based on client’s

personal and financial details •• We produce a Financial Plan for each client, showing their current financial position and their future financial objectives.

•• The Financial Plan will encompass all areas of a client’s financial position, e.g. investments, borrowings, protection policies and pension policies •• Financial Plans are reviewed on an annual basis, taking into account any changes in a client’s personal and/or financial circumstances.

FAMILY OFFICE SERVICE •• Preparation of Quarterly Net Worth Statements

•• Preparation of a comprehensive

INVESTMENT ADVICE •• •• •• •• •• •• ••

Managed Funds Exchange Traded Funds Unit Trusts Investment Trusts Tracker Bonds Deposits Employment and Investment Incentive Schemes (EIIS) •• Structured Products •• Qualified Investment Funds (QIF) •• Renewable Energy Investments

•• •• •• ••

database which contains all information on Assets and Liabilities, thus facilitating instant access to information Centralisation of costs on all Personal & Investment Properties Appraisal of Investment Opportunities Monitoring of Investments Attend meetings relating to Investments on behalf of clients

DLS Capital Management 25 Merrion Square Dublin 2

www.dlscm.ie info@dlscm.ie

DLS Capital Management is regulated by the Central Bank of Ireland

(p) 01 6119086 ( f ) 01 6619180