Cathedral Financial Consultants Ltd Autumn 2017 by publications

AUTUMN

2017 ECONOMIC OUTLOOK Dr. Constantin Gurdgiev

HAPPY BUT EXHAUSTED: 4 TIPS FOR REVERSING WORKER BURNOUT GOOD REASONS TO ENCOURAGE SELF CONTROL AMONG EMPLOYEES 10 WAYS TO ‘‘TECH UP’’ YOUR BUSINESS 7 TRAITS OF EXCEPTIONAL COACHES MEET THE TEAM

TABLE OF CONTENTS Economic Outlook - Alice In The Wonderland: The EU Banking Reforms Dr Constantin Gurdgiev

Happy But Exhausted: 4 Tips For Reversing Worker Burnout

Business Briefs

Good Reasons To Encourage Self Control Among Employees

Legal Briefs

10 Ways To ‘‘Tech Up’’ Your Business

7 Traits of Exceptional Coaches

Meet The Team

Range of Services

Welcome to the Autumn 2017 edition of Cathedral Financial Consultants Ltd bi-monthly newsletter. As a company we recognise the importance of staying in touch with our clients and we hope that this newsletter, which has a variety of articles, on different topics, will be of interest to you. We have an experienced and dedicated team here at Cathedral Financial Consultants Ltd. who are happy to assist you. Please contact our office on 042-9339098 with any queries you may have or to arrange an appointment with one of our financial advisors. Please be sure to let us know if you have any suggestions for future content or issues you would like to see us discuss. Talk to Cathedral Financial Consultants Ltd. today for all your Pension, Protection and Investment needs. All the Team at Cathedral Financial Consultants.

Dr. Constantin Gurdgiev

ALICE IN THE WONDERLAND: THE EU BANKING REFORMS This August, the world marked the tenth anniversary of the Global Financial Crisis that entered its active phase on August 9th, 2007 when BNP Paribas ended clients’ withdrawals from three hedge funds it operated due to “a complete evaporation of liquidity”. Thirteen months later, on September 7th, 2008, two main ‘Federally mandated’ lenders, Freddie Mac and Fannie Mae, were nationalised, and eight days after that, the Lehman Brothers filed for bankruptcy. Just over two weeks after that, Ireland issued a blanket Guarantee of its banks. The crisis turned fully systemic, spreading contagion from the banks to the sovereigns to the real economies, spreading from the U.S. to all corners of the world and triggering the Great Recession. The rest, as some say, is history.

Over the subsequent years, the Fed, the Bank of England, the Bank of Japan and the European Central Bank (ECB), alongside other central banks, deployed rapidly escalating and increasingly unorthodox and costly measures attempting to shore up markets’ liquidity, and subsequently support the economy. The U.S. Treasury and other fiscal authorities around the world pushed into the markets to provide support for banks and financial intermediaries. Waves of nationalisations and resolutions of the banking, insurance, pensions and

investment undertakings swept across the advanced economies and spilled over into a number of key emerging markets. The painful process of deleveraging prompted political shifts and crises that still reverberate across Western electorates, as well as in Asia and Latin America. Debt transfers from banks to governments, subsidised by the Central Banks, have led to an unprecedented increase in the real economic indebtedness around the world, raising total global leverage of households, non-financial corporations and sovereigns from $149 trillion or 276% of global GDP in 2007 to $217 trillion or 327% of GDP at the end of 2Q 2017.

THE PROMISE HELD HIGH With all the emergency efforts in place, however, the policymakers around the world have held high the promise that as bad as the Global Financial Crisis might have been, the lessons from it will ensure that never again will the advanced economies create the conditions for another similar crisis to wreck devastation over the global financial system. And to provide concrete footing for this promise, the leaders

of the EU, the U.S. and other major advanced economies have promised to dramatically reform their banking sectors to make it more resilient to shocks and to remove the implicit guarantee of transfers from taxpayers to the failing banks. Ten years after the start of the crisis, they did not deliver on these promises. Plain and simple.

THE TEST CASE OF ITALY Consider the events of 2017 to-date. This June, two relatively small Italian banks had to be, once again, rescued using the taxpayers funds. The bailouts were not trivial, totalling commitments of up to €17 billion (US$19.3 billion). More significantly, the rescues raised the question as to whether the European Union’s Banking Union system can be made work in the case of the larger, systemically important institutions running into trouble. The Italian bailout of 2017 involved the country’s largest bank, Intesa Sanpaolo, taking over the good assets of its smaller rivals Banca Popolare di Vicenza and Veneto Banca for a nominal price of one Euro. The Italian taxpayers underwrote the task of covering the losses and the bad loans. The deal got an approval of the European Commission, a nod from the ECB and a handshake from the European Single Resolution Board (SRB) - all the institutions whose job, per European Banking Union (EBU) rules, was to ensure that taxpayers were not on the hook for bad banks’ debts. In other words, just as with the ECB’s QE, the rules were broken, yet the rules were met. European banking regulators and politicians have eaten the cake that they still insist they keep. Reminiscent of the Cypriot bailout of March 2013 (that took some 17 months to structure and execute), the Italian banks bailout was 15 months in the working - a clear sign that the Italian and European authorities were going to great lengths in putting the veneer of compliance with the EBU rules on a deal that, in the end, violated the very spirit of these rules. The reason for this length in structuring the deal is that the Italian and the EU policymakers were desperate to avoid bailing in the bondholders in the two banks. In other words, the reason for the delay in 2017 bailout was exactly the same as the reasons for delaying Spanish, Portuguese, Greek and Cypriot bailouts. This is the first “plus ça change” moment for the post-Crisis European banking reforms.

While the two banks were non-systemic in size, they had large numbers of retail investors - mom-and-pop holders of banks’ bonds involved. To cut back the risk of political unrest, the Italian government shifted some of the earlier losses in the two banks to the semi-private rescue fund, Atlante, created back in 2015. The fund absorbed some €3.5 billion worth of the two banks’ losses, but that was hardly sufficient. As the two banks continued to lose deposits, Italian and European authorities, by the late 2016, were left with no options to shore up the remaining depositors and to shield them from a bail in. The third “plus ça change” moment for the European Banking Union has arrived: although the European reforms provided for a joint depositor guarantee fund, the fund had no real money to underwrite two regional lenders, without exhausting cash earmarked for the too-big-to-fail systemically important institutions. In other words, the fund turned out to be a pure paper tiger in the face of a small crisis, raising questions as to its sufficiency in case of a systemic banking crisis in the future.

The rationale for avoiding a bail in of banks debt was also identical to the reasons put forward in not bailing in the Irish, Greek, Portuguese, Spanish and Cypriot bondholders: the concern that applying haircuts on senior bank debt will trigger a contagion across the Italian (and by corollary the European) banking system. This was the second “plus ça change” moment for the reforms, which were explicitly designed to prevent such contagion.

By the end of February this year, it was clear that the Italian authorities had no other option left than to pursue a “precautionary recapitalisation” of the two lenders. This procedure requires, under the new set of European rules, that shareholders take the first hit in covering capital shortfalls, followed by junior bondholders. If the capital cushion remains inadequate post-junior bondholders bail in, the new system allows for a simultaneous bailing in of senior bondholders and provision of taxpayers supports. The Italian authorities decided to deploy only the first step, of bailing in shareholders. Which proved insufficient not only in terms of covering future capital losses, but even in covering existent losses at the time.

Which marks the fourth “plus ça change” moment for the EU reforms: as in the case of all peripheral Euro area countries heading into their respective bailouts, the system of risk warnings have failed the public, the policymakers and the regulators. In not a single European bailout of 2008-2013 did the supervisory and regulatory authorities pro-actively spotted the developing risks. And the reforms post-crisis did not change this inherent, systemic incapacity to assess risks either. It is worth noting that SRB decision to declare Banca Popolare di Vicenza and Veneto Banca non-systemic was based on the lenders holding assets of €28 billion and €35 billion, respectively, at the time of the bailout. Alas, the main reason why the two banks fell below the SRB thresholds for designating a bank as systemically important was that the SRB delayed issuing its decision until the crisis hit banks have bled enough assets to slip under the SRB thresholds. Whether incompetence, or worse, intent were behind this outrun of events is the moot point. The SRB and SSM pillars of the Euro area banking reforms has failed once again. “Plus ça change” moment number five is that after reforming the system of banks supervision, the Euro area still ended up with a situation, where extend-and-pretend measures were deployed to superficially conceal the true nature of the two banks’ insolvency, imposing unnecessary delays in resolving the problem, and, as a result, amplifying losses to the taxpayers. This is exactly what has happened during the peak of the crisis in Ireland, Spain and Greece, as well as in Cyprus.

All along, the ECB’s new Single Supervisory Mechanism (SSM) - designed as a warning system for banks solvency risks and serving as a cornerstone of the banking sector reforms - insisted that the Italian banks were solvent. Only two days before the announcement of the final taxpayersfunded bailout in June this year did the SSM acknowledge that the banks are “failing or likely to fail”. In theory, the SSM was set up back in 2015 to explicitly put some distance between the banking regulators’ and supervisors’ risk assessments and the national governments. In practice it failed. A similar failure also involved the SRB which was also set up to remove national political leaders from meddling with the decisions involved in shutting down insolvent banks. It took SRB until a day before the official banks rescue to declare the two Italian lenders to be ‘non-systemic’, de facto washing SRB’s hands of any responsibility for restructuring them.

SYSTEMIC FARCE In other words, within the 15 months span through to June 2017, all and every part of the European banking reforms package designed to create a structured system for resolving banking failures, have been found inadequate in the case of just two regional lenders. The end result of this farce was that Italian taxpayers were left on the hook, while senior banks bondholders were left whole and happy. The rules were circumvented, bent, but de sure, not broken. De facto, however, the whole policy infrastructure for addressing the banks’ insolvency was exposed as a fake facade, hiding the same old rotten building as the one that existed in the pre-2008 world. Adding insult to the already grave injury, the Italian deal used taxpayers money to directly subsidise Intesa Sanpaolo - the bank that took over performing assets from the regional banks. Inset got allots € 4.8 billion in cash for capital and operating expenses, plus €400 million in loans guarantees. In exchange for these monies, the Italian Government did not even get a single share in Intesa. Paraphrasing the old Dire Straits song, the new EU banks resolution infrastructure turned out to be “Money for nothin’ and assets for free” for Intesa.

INVESTORS WARNED In fairness to the SRB and the European Banking Union other key players, the reforms process worked differently in the earlier test of the system, involving Spain’s Banco Popular that was wound down earlier in June this year. In that deal, the ECB was quick in declaring Banco Popular as being troubled, or, in terminology of ECB “failing or likely to fail”. The SRB promptly took control, wiping out Banco Popular’s shareholders and haircutting junior bondholders before another Spanish bank, Santander, was asked to raise its own funds to finance the buyout of Popular’s assets. However, despite the accolades from the analysts and politicians, the Banco Popular’s winding down was a superficially easy test of the system, as it required no haircuts of senior bondholders and Santander faced no difficulty raising own finance. This is not what the resolution mechanism was designed to test.

Bank of England warned at the end of June that the U.K. financial system is heading in a worrying direction and that banks are “forgetting the lessons” of the financial crisis. Last year, the IMF warned that the Euro area continues to experience “market pressures” within the banking sector. The Fund estimated the some €900 billion of non-performing loans remain on the books of Eurozone lenders. In July 2017, the IMF issued a warning to the world’s 20 largest economies, the G20, stating that the current markets conditions present growing risks to global growth, and that financial systems vulnerabilities “present an immediate concern”. In June this year, Bank for International Settlements defined four non-political risks that are underpinning rising threat of a new economic crisis. Risks number two and three: financial stress as financial cycle matures across the advanced economies, and global debt levels continued upward trend.

Instead, the Banking Union infrastructure was developed explicitly to handle tough cases, like the Italian banking system that still holds €300 billion worth of bad assets, based on Banca d’Italia estimates, of which roughly €170 billion are officially non-performing. To-date, resolution of Banca Monte dei Paschi di Siena (BMPS), and Popolare di Vicenza and Veneto Banca, have cut only about €49 billion of rotten assets from the system. In the case of the BMPS, the end cost to the taxpayers of recapitalisation was in the region of €5.4 billion. The gross cost to the taxpayers of resolving less than €50 billion of defaulting assets has been around €23 billion, counting direct bailouts, plus costs. If the trend continues, Italian taxpayers can be looking at writing more cheques in years ahead.

In this environment, Irish banks are sitting ducks for risk and uncertainty associated with the fortunes of the international financial system. While the banking sector in Ireland has undergone significant deleveraging, profit margins across sector remain relatively weak, despite the banks pumping out some of the highest cost lending in the Euro area. And bad loans remain a stubborn legacy of the crisis, placing the Irish banking sector as the third worst in the Euro area by this metric some nine years after the crisis peak, behind only Greece and Cyprus. Deleveraging across the domestic Irish lenders since 2013 has cut non-performing loans loads from an average of 27 percent to just over 14.2 percent as at the end of 2016, and to an estimated 13 percent at the end of 1H 2017. However, this figure remains more than double the 5.3 percent Euro area average. Meanwhile, recent rights issuances and significant Contingent Convertible bonds placements by the Irish banks, in all likelihood, have nearly exhausted the room for near-future market funding through these sources. This means that Irish banks are still walking on thin ice and any exogenous shock can trigger a new wave of contagion into Irish financial system. Given the latest track record of the European Banking Union reforms, such a shock will most likely lead to a re-nationalisation of at least the weaker Irish lenders.

From the Irish investors perspective, the de facto failure of the European banking reforms implies higher risk over the longer term horizon. Research from the Bank for International Settlements shows clearly that the financial crises are becoming both more frequent and more severe. Last month, the ex-Chairman of the U.S. Fed, Alan Greenspan warned that the current conditions in the bonds markets the bread-and-butter of the banks’ capital reserves - can be characterised as an ‘‘irrational exuberance’’ type moment.

Dr Constantin Gurdgiev is the Adjunct Assistant Professor of Finance with Trinity College, Dublin and serves as a co-founder and a Director of the Irish Mortgage Holders Organisation Ltd and the Chairman of Ireland Russia Business Association. He holds a non-executive appointment on the Investment Committee of Heniz Global Asset Management, LLC (US). In the past, Dr Constantin Gurdgiev served as the Head of Research with St Columbanus AG (Switzerland), the Head of Macroeconomics with the Institute for Business Value, IBM, Director of Research with NCB Stockbrokers Ltd and Group Editor and Director of Business and Finance Publications. He also held a non-executive appointment on the Investment Committee of GoldCore Ltd (Ireland) and Sierra Nevada College (US). Born in Moscow, Russian, Dr. Gurdgiev was educated in the University of California, Los Angeles, University of Chicago, John Hopkins University and Trinity College, Dublin.

HAPPY BUT EXHAUSTED:

According to a recent survey of American office workers, they are mostly happy, but also tired. It sounds like an oxymoron. Is it even possible to feel such conflict, and how can it be resolved? The answer probably lies in the fact that most people enjoy their work, and appreciate the opportunity to use their strengths. However, in many workplaces, it is difficult for people to maintain a healthy work/life balance, avoid stress, and in many cases say ‘no’ when their workload is too heavy. Unless people find a solution to this challenge, they may develop fatigue and other issues.

REVERSING WORKER BURNOUT for

Employers can use the four tips below to devise solutions to employees spending too much time working.

MANAGE EXCESSIVE DEMANDS ON TIME

Assess the time workers spend on completing their tasks, and discourage them from feeling compelled to remain plugged in 24/7. Workers will be more effective and productive if they have time to recharge away from office pressures. Encourage sufficient overlapping of responsibilities and teamwork to enable someone to handle gaps and emergencies without pressuring everyone to constantly be available.

ENCOURAGE AUTONOMY AND FLEXIBILITY

Many surveys on remote working and flexi hours have illustrated the benefits of allowing workers to choose their workplaces and work hours. Telecommuting workers, for example, have the advantage of adjusting their time and workplace in order to avoid conflicts with family life and other responsibilities. By providing this option, within reason, of course, you show a willingness for constructing their working arrangements around their family and other non-work demands, which fosters appreciation and loyalty. In turn, you create happy, relaxed and productive employees.

DON’T WASTE EMPLOYEES’ TIME

Research shows that meetings are one of the leading causes of time wasted at work. Ensure that all meetings have thoughtout agendas, and that they end with clear action steps. If you have to have meetings, consider doing so electronically to reduce wasted time and travel. Also work actively to reduce email overload.

PROVIDE OPPORTUNITIES TO RECHARGE

Encourage employees to take a break throughout the day. Major tech companies provide amenities which allow employees to take a time out, whether it is a nap, a round of table tennis, or just a place to get out of the office for a moment. A break provides a good opportunity to enhance creativity and increase physical energy.

BUSINESS BRIEFS However, currency fluctuations with Sterling have partly contributed to a 6.2% fall in visitors from the UK. Tourism Ireland CEO, Niall Gibbons says it’s been a good year to date overall, but there are challenges. He said that there has been a 6.2% decline in British visitors. Britain is Ireland’s biggest market and since the Brexit vote, the decline in the value of Sterling vs the Euro has made Ireland, as well as other Eurozone countries less competitive from a holiday perspective for British travellers.

IRELAND SEES RISE IN TOURIST NUMBERS, BUT BREXIT LEADS TO FALL IN UK VISITORS There has been a drop in the number of British tourists coming to Ireland. Half year figures from Tourism Ireland show the overall number of overseas visitors is up more than 4%.

the weakest reading since the Brexit vote last summer, which infers that earlier consumer optimism about UK economic prospects seems to be undergoing marked reassessment. Another key monthly economic survey, the Ulster Bank snapshot of the building industry, suggests purchasing managers believe construction orders will accelerate later this year, even as the pace of growth in housing and commercial units slowed somewhat for the second successive month in July. KBC Chief Economist, Simon Barry commented that firms reported another substantial increase in new business flows highlighting a greater availability of projects - a sign offering considerable encouragement regarding the health of the sectors near-term outlook. The output of civil engineering firms — the third leg of the industry — contracted again in July. The Government closely watches such private surveys for clues about the direction of its tax revenues. The exchequer returns for July showed tax revenues were rising as expected from a year earlier but with no sign of the windfalls that characterised recent years.

CONSUMERS, BUILDERS IN GOOD HEALTH Consumers and the construction industry are showing increased confidence over future spending plans, separate surveys suggest.They make good news for Government tax revenues as Finance Minister Paschal Donohoe prepares his Budget this October. According to KBC Bank and the Economic and Social Research Institute (ESRI) consumers are feeling at their most buoyant for 17 months — official figures also show that the economic growth is picking up pace. Households were, however, more downbeat about their own finances in the month. This may signal concerns about “limited income growth” and the notion that they are not sharing adequately in the much talked about economic recovery, according to KBC chief economist Austin Hughes. Despite the large mortgage debts faced by many households, consumers appear to be more confident about the economic outlook here than in other countries.In particular, Mr Hughes noted another drop in consumer sentiment in the UK in July,

PAY INCREASES LIKELY AT ONE IN THREE BUSINESSES, SURVEY SHOWS

uncertainty and outcomes of Brexit, as evidenced in consumer sentiment, 2 in 3 business still have ambitions to expand over the next 1 to 3 years. The survey showed that shopkeepers are the most subdued about the year ahead. Improved job prospects mean consumers are more willing to spend than they were a year ago with Dr O’Sullivan noting that consumer confidence has been growing and is now as its peak since Brexit with households adjusting to both Brexit and Trump’s win the US Presidential race. The likely impact of both prompted more than 2 in 5 Irish households to put spending plans on hold because they were unsure of what way economic policy was going to go. However, GDP and the labour market have put in a better-than-expected performance in the first few months of 2017, the initial shock looks to be subsiding with the number now holding out on spending reduced to 1 in 3 in the most recent survey.

A third of businesses are planning to increase pay over the next 12 months while about 40% of workers expect a boost in their wages over the same period, a report published recently shows. The Bank of Ireland Economic Pulse survey, which measures consumer and business confidence, indicates that householders’ and employers’ views of their finances are at their most upbeat in a year, in the wake of Britain’s vote to leave the EU. According to Bank of Ireland’s Chief Economist, Dr Loretta O’Sullivan with regard to wages, one in three firms plan on increasing basic pay within the next 12 months with 2 in every 5 workers expecting a pay rise. She stated that whilst many firms are fearful of the

Global M&A investment helped drive the fintech market rebound, with $5.9 billion (€5 billion) in deal value in the second quarter. Comparatively, global venture capital (VC) funding to fintech companies declined slightly, with just over $2.5 billion (€2.1 billion) in funding raised in the quarter. In the Americas, a single deal – the buyout of Torontobased DH – accounted for $3.6 billion (€3 billion) in deal value, contributing to more than half the total fintech funding during the second quarter. This deal aside, the US and Europe saw the vast majority of investment, with each accounting for $2 billion (€1.7 billion). Asia lagged significantly with just $760 million (€640 million) invested in fintech firms during the three months. Deal volume in Europe declined from 110 to 90 quarteron- quarter. Britain saw a major gain a year after the Brexit vote, with $1.4 billion (€1.2 billion) in total fintech funding in the three months under review, a six quarter high, and over $1 billion more than in the January to March period.

FINTECH FUNDING ON THE REBOUND AS IRISH START-UPS PLAY PART Global fintech investment more than doubled from the first to the second quarter on the back of a sharp rise in European funding deals. Ireland played its part, recording venture capital investments of more than $230 million (€194 million). Some €33 million of this related to fintech investments, led by Plynk which raised €25 million in a Series A round from Swiss Privée in June. Total global funding to fintech firms rose to $8.4 billion (€7.1 billion) from $3.6 billion (€3 billion) with European fintech investment jumping to over $2 billion (€1.7 billion). This is well below the peak investment high of $5.8 billion (€4.9 billion) seen in the fourth quarter of 2015, but up on the $880 million (€741 million) reported in the first three months of 2017. KPMG, which conducted the research, said the robustness of the European fintech market has been helped by the presence of an increasing number of fintech hubs, from London and Berlin to Paris and Dublin.

THREE-QUARTERS OF IRISH FIRMS INCREASED CYBERSECURITY AFTER WANNACRY INCIDENT

held to ransom in the past 12 months, 19% of survey respondents stated that they had. If held to ransom, 19% of Irish businesses would pay up to €50,000 to recover their data from cybercriminals who seek to get extra money. This is a substantial increase from a similar survey carried out by DataSolutions 17 months ago, when just 7% said that they would pay a ransom. David Keating, Security Specialist with DataSolutions noted that the survey results highlight that ransomware remains an effective weapon for cybercriminals who seek to extra money from Irish businesses. The ransomware attacks are hugely disruptive and as recent outbreaks highlight, they pose a huge threat to organisations of all types and sizes. In order to secure their interests, companies need to ensure that tried and tested security systems have been implemented.

A survey has found that 73% of companies have made changes to their IT security as a direct result of the WannaCry ransomware incident. In May, approximately 200,000 computers in 150 countries, including Ireland, were infected by the unprecedented WannaCry ransomware attack. Despite widespread upgrades to Irish security systems since the attack, DataSolutions found that a significant 30% of respondents still don’t think that their organisation is capable of protecting itself against emerging threats. As companies remain ill-equipped to tackle cyber threats, the survey results indicate that ransomware remains an issue for Irish organisations. When asked if they had been

ALMOST 50% OF CONSUMERS AVOID SHOPS THAT DO NOT ACCEPT CARD PAYMENTS.

relative newness of contactless payments, it has already made a significant impact on consumer spending habits. A similar survey conducted in 2016 showed that 54% used contactless and 45% used it at least once a week - in just over a year, those numbers have increased significantly, to 73% and 66% respectively. Almost 50% of those surveyed have at one point not purchased goods in a shop that did not offer card or contactless payments. Mr Cleary warned businesses that unless they adopt contactless technology, they risk a sizeable loss of business. He commented that research has suggested that business owners that are unable to sell products online could be inadvertently pushing their customers towards their competitors. The survey also showed that Irish consumers are will to experiment with and adapt to new payment technologies.

A new survey has found that 43% of Irish consumers will avoid shops that do not accept card payments. The study of 1,000 adults conducted by Amarach Research found that almost 75% of card holders here use contactless payments, with ‘‘millennials’’ (25 to 34 year olds) being the most prolific users on 81%. Bank of Ireland (BOI) commissioned the survey which says that 53% of people still prefer to shop in person, but it is warning stores risk losing business if they do not provide card payment options. Brian Cleary, Managing Director of BOI Payment Acceptance (BOIPA), said that despite the

GOOD REASONS TO ENCOURAGE SELF-CONTROL AMONG EMPLOYEES Self-control has been a focus of many studies for centuries. It has been debated by the early psychologists and philosophers alike. Freud believed that self-control is the essence of civilised life, a sentiment reflected in modern times by Tim Ferris, author of the 4-Hour Work Week. Plato’s perception was that the human experience was a constant struggle between rationality and desire. In order to achieve our ideal form, we have to exercise self-control.

MAINTAINING SELF-CONTROL IN THE WORKPLACE

In his work, Aleph, Paulo Coelho wrote, ‘‘If you conquer yourself, then you conquer the world.’’ Stephen R. Covey reflected the same sentiments in The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change, where he wrote ‘‘The ability to subordinate an impulse to a value is the essence of the proactive person.’’

Self-control is an important key to cultivating an ethical and effective workplace. Research has shown three powerful factors that may help effective leaders to increase the self-control of their employees.

Recent studies revealed that people with high levels of selfcontrol tend to: • • • •

make healthier food choices; perform better at school; build higher-quality friendships; be better leaders at work.

However, lack of self-control in the workplace has dire consequences, according to a recent study. Let’s look at what the study revealed about people with low levels of self-control.

1. Encourage good sleeping habits Sleep restores self-control. Employees who experienced fewer sleep interruptions were found to be able to exercise self-control better than those who are sleep deprived. Long work hours can have a negative impact on the behaviour of employees.

ANTI-SOCIAL BEHAVIOUR Poor self-control causes employees to sweep work problems under the rug and to resist helping other employees. Employees who lack self-control tend to avoid engaging in corporate volunteerism.

2. Tap into displayed emotions

DEVIANT / UNETHICAL BEHAVIOUR

Instead of focusing only on service with a smile, which only pleases customers for a short while, companies should instead teach employees to tap into the emotions of their customers. A study examined the effects of physicians who took on the perspective of their patients, and experienced genuine empathy. As a result, the physicians experienced higher levels of self-control and lower levels of burnout.

Professionals with low self control resources tend to be rude and unhelpful and, often, are more likely to engage in fraudulent or unethical behaviours.

POOR PERFORMANCE Employees who have below-average levels of self-control tend to exert less effort and are more distracted at work. They choose to spend less time conquering more complicated tasks, and generally perform worse than peers with high levels of self-control.

3. Create the right environment From the office decor to displaying the company’s code of conduct in clear view, there is much you can do to help prevent negative behaviours associated with employees’ lack of selfcontrol. The right environment will help avoid the temptation to behave unethically.

NEGATIVE LEADERSHIP STYLES A leader with low self-control will often exhibit counterproductive leadership actions, such as verbal abuse.

LEGAL BRIEFS

IRISH FIRMS NOT READY FOR NEW DATA LAW

Reacting to the results of the survey, Chief Executive of GDPR specialist business EuroComply, Emerald de Leeuw, commented that the results are not surprising as it fits the general situation in industry. Her concern lies with the companies in Ireland that rely on global corporations with good practices as they will lose business. The lack of awareness around the regulation concerned Ciaran McCormack, Chief Executive of Compu B, who said a lot of businesses don’t realise the potential liability. He commented that there is a huge question mark surrounding how ready businesses are and GDPR will have a significant impact on business with a lot of methods of marketing not being valid anymore based on where companies obtained data in the first instance.

The vast majority of Irish businesses are unprepared for the General Data Protection Regulation (GDPR) which is due to come into place next May, according to Connected, an annual survey conducted by The Sunday Business Post. The study of Irish businesses, which was conducted with Red C and Compu B, found that 61% of firms were unaware of the GDPR, while only half of those who knew of it felt they were in any way equipped for the regulation. The GDPR is being implemented across the EU next year, with businesses facing fines of up to 4% of global turnover or €20 million, whichever is greater, if found to be in breach of the privacy regulation.

CLAMPDOWN ON ‘RENT-A-WOMB’ SURROGACY UNDER NEW REGULATIONS

There will be new restrictions on the hugely controversial ‘rent-a-womb’ business. However, it is understood that under the proposed legislation surrogacy will be permitted on an ‘‘altruistic basis’’. These are instances where a family member or friend carries a baby for no commercial gain. Sources say the decision to restrict commercial surrogacy stems from concerns about the welfare of the child, and the potential for ‘‘financial coercion’’ and exploitation of vulnerable women. It is envisaged the legislation will also establish a ‘‘mechanism’’ for transfer of parentage from the surrogate to the intending mother. It is understood that where ‘altruistic’ surrogacy is carried out, the name of the birth mother will appear on the birth certificate in the first instance. A transfer of parentage, that is agreed between all parties, will allow for the birth cert to be reissued in the name of the genetic parents. However, commercial surrogacy will be made illegal. It has also emerged high level ‘‘consultations’’ are currently taking place with officials from the office of the Attorney General, and other relevant departments. Sources say the draft scheme will be further revised, if necessary, before being sent to the Minister for Health, for government approval. In a statement, the Department of Health said it could not give a ‘‘definite timeline’’ for the completion of the legislation.

Childless Irish couples using ‘rent-a-womb’ surrogates overseas are to face a major legal clampdown. In a landmark development, tough new guidelines will, for the first time, regulate a number of highly contentious fertility procedures in Ireland. These range from embryo implantation to stem cell treatment. Surrogacy - which involves a woman carrying a baby for someone who is unable to bear her own child - is not illegal in this country but remains largely unregulated. However, there is now mounting concern that commercial surrogacy is exploiting impoverished young women in some third-world countries. In the United States, the process can cost as much as €170,000 due to high medical and insurance costs. In the Ukraine, surrogacy programmes start at approximately €33,000, while in India the cost is around €30,000 per child. Commercial surrogacy is illegal in many jurisdictions, including the UK, France, Germany, Italy and Spain. According to experts, there is nothing to stop the growth of commercial surrogacy in Ireland, as a ‘‘serious legal limbo’’ currently exists. In February 2015, the Irish Government approved draft legal provisions governing fertility treatments, including surrogacy.

YOUR BUSINESS Let’s face it, the world revolves around technology and if you want to make it in this world, it’s time to ensure your company’s technology is up-to-speed. Here are the ten aspects to consider first, when you decide to update your company’s technology.

UPGRADE

UPDATE IT SECURITY & BACKUP

Most of us fear the idea of moving files and documents from old desktops to powerful, sleek and secure laptops, mainly due to the perceived risk of losing data. However, if your PC is older than 5 years, you risk losing it all in a breakdown.

Europe has been under attack by Ransomware such as Wannacry, that has pillaged schools, hospitals and other vulnerable institutions. The minimum requirements for dealing with threats, include:

If you’re worried about moving your files, you can now rest assured that they will be safe and sound, thanks to a number of easy-to-use downloadable services that take care of the heavy lifting to ensure your files, as well as some of your applications and programmes, are safely copied to the same locations on your new laptop. All you need is a decent broadband connection, as the services use web links. Here are some of the services you could try:

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newest operating system

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up-to-date security software

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two-factor authentication for sensitive or passwordprotected information

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Laplink’s PCMover (laplink.com/pcmover)

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Dropbox

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Onedrive

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Flickr

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Google Photos

Any information that you cannot afford to lose should be backed up on a daily basis. Use an online backup and recovery service, such as Keep It Safe or Iron Mountain to take care of the heavy lifting for your small business. Crashplan.com is another user-friendly, affordable and effective solution for sole traders.

Laplink PCMover (from €23.95) can be used for all your files, while Dropbox and Onedrive are free online storage services. Use them on an ongoing basis to never lose anything again. Flickr and Google Photos provide almost unlimited storage for image files and videos.

UPDATE AND CLEAN OUT ACCOUNTS

According to Comreg, Ireland still has more than 3,000 active dialup Internet services and more than 100,000 active ISDN lines, most being legacy connections. While some of these connect devices to payment terminals, a great many are simply overlooked. Don’t pay for services you don’t use. Scrutinise your bills and close down any accounts or services you pay for but no longer use. By the same token, clear up unused email accounts and update online directories and social media accounts with current and correct information.

UPDATE YOUR OPERATING SYSTEMS

Ireland’s latest online access figures show that close to 5% of all PCs still use older operating systems, such as Windows 8, Vista or XP. Many of these machines are used for specific utilities, such as hospital scanners and ATMs, but many are still used to run offices and shops. Using old operating systems is negligent, as it opens you up to cyber attacks and malware. Microsoft no longer provides security support for older operating systems.

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Many small business assume that the General Data Protection Regulation (GDPR) is only for large corporations, and that’s not accurate. The GDPR law tightens up data protection and privacy rules while imposing penalties and fines for infringements. Small firms also face administrative fines, rather than just a slap on the wrist. There will be no more court dates, just massive administrative fines.

GO PAPERLESS

Paperless systems save time. When you use paperless methods, you don’t have to waste any more time on filing and shuffling. An increasing number of small businesses are adopting paperless transactions using digital signature software such as Docusign.

If you don’t know the laws, now is the time to brush up on your knowledge, and allocate GDPR duties to a member of staff.

Digital signatures carry full legal effect, and even law firms are using it. Instead of sending out physical letters, law firms send PDF documents by email. Any physical correspondence they receive is date-stamped, scanned and assigned to clients’ digital files.

FIND FUNDING FAST

If your company has an innovative and actionable idea and solid business plan, you should be able to fund it easily with the help of competing state grants and funds. State bodies such as Enterprise Ireland and private venture capital firms place more than €1bn into both Irish start-ups and established companies every year. Frontline Ventures invests between €200,000 to €3m into startup software companies, while Enterprise Ireland invested in 229 companies (average €140,000) in 2016.

PROTECT YOUR PHONE CONTACTS

Tired of losing your phone contacts in the event of a lost or stolen phone? You can now save them to Google Contacts and never lose anyone again. Simply go to ‘settings’ on iPhone or Android and copy your SIM contacts onto the phone, and then into your Google account from where you can always access your contacts.

One in eight applications for Enterprise Ireland’s €50,000 equity investment scheme were granted, which left many business owners disappointed. However, Local Enterprise Boards are on hand with more local aids and grants. Enterprise Ireland also provides hundreds of €5,000 innovation vouchers which can be used to improve your small business’ online capability and modernise your technology.

ADHERE TO GDPR

STRATEGISE ONLINE SALES

The most dangerous thought that crosses Irish business owners’ minds, is thinking that online marketing does not apply to their business. According to Amarach Research, Irish online sales have doubled in the last two years. A third of all sales occur online, compared to only 17% the year before. By the end of 2017, it is expected that 40% of all sales will occur online.

STREAMLINE PAYMENT SYSTEMS

Paying a small fortune for a merchant account with the bank in order to accept credit cards online? Well, you can now save on costs while still having access to merchant services. Companies such as Stripe allow you to accept credit card transactions without the complications imposed by the big banks. If you’ve always wanted to trade online, you can now do so using your website and an online merchant service. Your website administrator will be able to easily incorporate the payment system into your website.

Like it or not, but your competitors are online. Ireland ranks first place out of 28 EU countries in terms of small businesses incorporating technology. Last year, we were in 3rd place. According to a report by the European Commission, we scored especially well in online sales and e-commerce, compared to other EU rivals. Almost one third of Irish SMEs sell products and services online, which is twice the European small business average. Don’t you think it’s time to pay more attention to your online channels?

COACHES Many leaders overestimate their own coaching abilities, however, the true measurement of skill does not lie in their belief, but rather in the results they achieve and the perception of the recipients of the coaching. A recent study examined the data of a survey in which 3,761 leaders had to rate their own coaching skills, and the assessments of others. The data of those who overrated their skills was compared to the results of those who underrated their skills. The findings were interesting.

25% of leaders overrated their skills, placing themselves as superior to other coaches. The coaches who underrated their skills, were found to possess above average coaching skills. Based on the assessment, if you think that you’re an above average coach, but you’re not really, the results indicate that you might be much worse than you imagined. Here are the 7 key traits shared by individuals who over-estimated their own abilities. See how you can turn these around to become an effective coach.

1. UNCOLLABORATIVE

5. POOR LISTENER

Ineffective coaches tend to be competitive, which is an unhealthy trait. An effective coach would rather find opportunities for collaboration and cooperation.

Good listeners rely on the perceptions of other people. They listen to understand, without judgment. They want to hear the thoughts and feelings that are of concern to other people.

2. FAIL TO GIVE FEEDBACK

6. FAIL TO ENCOURAGE DIVERSITY

A good coach understands that constructive criticism and honest, clear feedback with actionable steps can help people develop and improve their performance.

Exceptional coaches value the diversity that comes from different race, gender, and age. This attitude is internally motivated, rather than dictated by organisational rules and laws. These coaches truly appreciate and value the advantages of diversity.

3. POOR ROLE MODELS

The seven traits of effective coaches are valuable to a leader in any organisation. Of course, training is also valuable, but it’s not the be-all and end-all of your coaching career. Strive for neverending improvement.

Effective coaches create open, trusting environments where others can have positive and meaningful interactions.

Don’t be afraid to assess your coaching skills, and encourage your team to assess it too. The key to constantly evolving skills, lies in identifying blind spots and building on those. Good skills are a great start, but a good coach will always develop them further.

They understand the importance of trust and give credit where it is due. They actively seek out opportunities to praise and recognise others, making them exceptional role models.

4. DON’T DEVELOP OTHERS

7. LACK INTEGRITY

Exceptional coaches understand the importance of developing others for the future by developing new skills. They invest the time and effort it takes to be fantastic at coaching.

Great coaches honour their commitments and keep their promises because they want to do the right thing.

Barry Oliver Director of Sales/Financial Advisor 087-9029552

Paddy Keenan Financial Advisor

boliver@cfc.ie

087-6664300

Having over 20 years’ experience in financial services and direct client relationship management through numerous channels including Bank of Ireland, Bank of Ireland Insurance & Investment, Irish Life through EBS and most recently Cathedral. Barry’s specialty is in ongoing relationship management, and advising clients in a clear and concise manner in relation to retirement planning, protection and investments. With over 20 years’ experience Barry has developed a network of highly experienced and qualified contacts to which he often refers to get his clients the best advice available from numerous financial services partners. Barry considers himself very fortunate to have the support of his clients and wishes to say “Thank you” to each and every one of them for their time, patience and support. When not advising clients Barry is married to the very patient Leona Oliver, and they have two children Jessica (17) and Michael (6) so free time is not an option to him.

After graduating from DCU in 2008 with a Masters in Business Management, Paddy worked with Bank of Ireland, initially undertaking various client-facing and advisory roles and then several management positions prior to his move to Cathedral. During this time, Paddy gained financial and banking qualifications such as the QFA and the Professional Banker designation. Having successfully worked with many key clients through the financial crisis, Paddy developed a strong knowledge of the prudent steps businesses and personal clients should take to be financially protected. These include Life Assurance, Serious Illness Cover and Income Protection offerings, many of which can be established in tax-efficient manners. In addition, Paddy has assisted clients in reviewing their existing plans and sourcing better value. Paddy previously captained the Louth senior footballers and was awarded a GAA All-Star in 2010 – Louth’s first and only in football. He has played and captained St. Patricks to numerous Louth Football Championships both underage and Senior. He has recently walked down the aisle with Karen, and everyone at Cathedral would like to wish them the best of luck in the future.

Noel Larney Financial Advisor 087-1436800

John Kerr Director/Financial Advisor nlarney@cfc.ie

087-6966709

Noel joined Cathedral Financial Consultants Ltd in May 2014 having spent the previous 14 years in a number of roles with Bank of Ireland Life. During his career with BOI Life, Noel worked with high net worth clients throughout the North East, many of whom have continued to consult with him for ongoing advice in his role with CFC. As one of the first Premier Wealth Managers appointed by BOI Life, he developed his expertise in retirement planning in addition to focusing on tailor-made investment solutions, protection and specialist wealth management and preservation. His role as Regional Pensions Manager helped him develop a recognised expert level of knowledge in retirement planning, death in service and group income protection. Prior to working in the Financial sector, Noel spent 12 years in the Food Industry where he gained a valuable insight into the operation and running of both large and small businesses. A native of County Monaghan, Noel now lives outside Dundalk with his wife and 4 children.

jkerr@cfc.ie

John is a Director of Cathedral Financial Consultants Ltd having joined the company in 2005 very shortly after its formation. John worked in AIB Bank in various locations throughout the country. He fulfilled a number of roles within AIB including Relationship Banking interfacing with customers and as a Commercial Manager over a 30 year career within that organisation. John has many years’ experience in the financial services industry and has a strong knowledge on Financial Planning, Structured Lending, Pensions and Protection. John holds a number of Professional Banking qualifications including a Certificate in the Fundamentals of Investment. Originally from Cork John has a strong interest in sports including golf, rugby and hockey in which he represented both his province and country.

Larry Murphy Financial Advisor 086-2600266

pkeenan@cfc.ie

John Gallagher Financial Advisor

lmurphy@cfc.ie

087-2934114

Larry was delighted to join Cathedral Financial Consultants Ltd in Jan 2016 as a Qualified Financial Advisor, having previously worked with Bank of Ireland and BOI Life in various roles from Business development to customer wealth management. Larry brings significant financial planning knowledge with over 26 years’ experience advising clients on how to maximise their pension and investment options as well as safe guarding their families financially. Originally from north of Dundalk but now living in Drogheda for over 20 years, Larry is married to Tara and has two lovely daughters aged 11 and 9. Larry is keen on most sports having played soccer, GAA football and squash at competitive levels but is now more content to watch sport being played especially his daughter playing for St Colmcilles’ Under 12 team.

jgallagher@cfc.ie

John joined Cathedral Financial Consultants in January 2014 in our Drogheda office. John, a native of Achill Island, has been in the financial services industry for 36 years having begun his career with Irish Life as a sales representative in 1981 based in Ballina. He was promoted to Sales Manager in 1985 and transferred to Drogheda, a town he grew to love and has remained here ever since. In 1998 he joined Canada life as a financial advisor and remained there until joining Cathedral in 2014. Throughout his career he has gained specialist knowledge and experience in all areas of financial planning but his main area of expertise is protection focusing mainly on family protection, income protection, business protection and mortgage protection. When John isn’t hard at work he enjoys keeping fit and is a keen football fan, He plays 5 a side football twice a week and is also a big GAA fan supporting his native Mayo and his adopted county Louth.

John McDonnell Managing Director John McDonnell is Cathedral Financial Consultant Ltd’s Managing Director. John is a Revenue appointed Pensioneer Trustee in his personal capacity. After completing his degree John spent 3 years with Eagle Star Life (Now Zurich) as broker consultant in the Northeast region. In 2003 John was a founding director of Cathedral Financial Consultants Ltd. John was subsequently instrumental in setting up Bespoke Trustees Ltd in 2006 and Bespoke Investments Ltd in 2008 where he works on a day to day basis. John holds a Bachelor of Business Studies (BBS) degree from University of Limerick as well as the Life Assurance Association’s (LIA) Qualified Financial Advisor (QFA) and Pensions (LIAP) diploma. John currently sits on the board of Cathedral Financial Consultants Ltd and is involved in the management and strategic direction of the company.

Cathedral Financial Consultants Limited 15

RANGE OF SERVICES PROTECTION

PENSIONS

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•• Personal Pensions (for the Self Employed) •• PRSAs •• Executive Pensions (for company directors and key employees) •• Self-Administered Pensions •• Self-Directed Pensions •• Group Occupational Pension Schemes

Mortgage Protection Term Insurance Serious Illness Income Protection Life Cover with Tax Relief (Section 785) •• Group Income Protection •• Group Death in Service

SPECIALIST ADVICE •• Business Protection •• Partnership Insurance •• Inheritance Tax Relief and Estate Planning •• GMS Services for GPs •• Financial Services for Cohabiting Couples •• Pension Adjustment Orders •• Employee Benefit Schemes

SAVINGS & INVESTMENT •• •• •• •• ••

Lump Sum Investments Bonds Deposits Structured Products Savings Plans

CONTACTS 16 Roden Place, Dundalk, Co Louth 20 Laurence St, Drogheda, Co Louth 1890 60 65 70 042 933 90 98 info@cfc.ie cfc.ie

Cathedral Financial Consultants Limited is regulated by the Central Bank of Ireland