SPRING
2017 LIFE COVER WITH TAX RELIEF ECONOMIC OUTLOOK Dr. Constantin Gurdgiev
COMPANY INVESTMENTS IN LIFE ASSURANCE SAVINGS TOP 10 PRESENTATION SKILLS TO MOVE YOUR AUDIENCE 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 Life Cover With Tax Relief Economic Outlook Company Investments In Life Assurance Savings 5 Ways To Boost Staff Collaboration Within Your Current Structure Top 10 Presentation Skills To Engage Your Audience Business Briefs How To Pass The Torch To A Capable Generation Assistance For Ireland’s SMEs How To Avoid A Communication Breakdown Meet The Team Range of Services
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Welcome to the inaugural Cathedral Financial Consultants Ltd bi-monthly newsletter. As a company we recognise the importance of staying in touch with you our clients and we hope that this newsletter will provide you with information on issues and topics of importance to you and your business. An important part of our commitment to our clients is to provide timely and relevant financial advice so our clients can make the best decisions possible when it comes to managing their money. In each issue you will find helpful information on a variety of financial topics as well as articles on IT, HR, economic commentary & business briefs amongst others. This newsletter is one more way we can provide you with the information to make smart, informed financial decisions. Of course, this newsletter will never replace the personalised advice you get from our knowledgeable and experienced advisors. We invite you to contact any of our team or call by our conveniently located offices to talk to us about your financial goals. You see, the more we get to know you, the more we can help. 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 advisors. Please be sure to let us know if you have any suggestions for future content or areas you would like us to discuss. Talk to us at Cathedral Financial Consultants Ltd today for all your Pension, Protection and Investments needs. All the Team at Cathedral Financial Consultants.
Personal
Pension Term Insurance
Personal Pension Term Insurance is a Personal Pension Term insurance policy that has been approved under Section 785 of the Taxes Consolidation Act, 1997. Essentially it is life cover on which the premium qualifies for tax relief at the life insured’s marginal rate of income tax, subject to certain limits. Who is Personal Pension Term Insurance suitable for • Any one who is self employed, either profession or trade such as solicitors, accountants, carpenters or farmers, assessable for income taxunder Schedule D Case I and II. • Anyone who is in non-pensionable employment i.e. PAYE workers who are not part of a company (occupational) pension scheme. Restrictions on Personal Pension Term Insurance Due to the generous tax relief available on premiums, The Revenue Commissioners have imposed a number of restrictions• The policy can not be used as security for a loan and can not be assigned
• Can not be taken out in a joint or dual life capacity i.e. policy can only be taken out in a single life capacity. Features of Personal Pension Term Insurance • Taken up to a normal retirement age of maximum age of 75. • No taxation liability arises on payment of the Death Benefit. The Death Benefit is payable to your personal representatives and may be taxable as part of your estate. • The expiry date or term of your Pension Term Insurance plan can go beyond your normal retirement age of your pension plan. In other words if you have chosen a normal retirement age of 60 for your pension, you could benefit for life cover up to age 75.
Life cover of €200,000
Life Insured
Life Cover of €400,000
non smoker / 40 years old / term until age 65
Premium
€26.24 per month
€48.15 per month
Premium after Tax Relief
€15.74 per month
€28.89 per month
Tax Savings
€10.50 per month
€19.26 per month
Tax Relief
40% (No PRSI/USC relief)
Assuming a person is eligible for tax relief at 40%. Subject to underwriting, terms and conditions apply.
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Executive
Pension Term Insurance
Executive Pension Term Insurance is an Executive Pension Term insurance policy that has been approved under Section 785 of the Taxes Consolidation Act, 1997. Premiums paid into Executive Pension Term Assurance are eligible for tax relief at the appropriate corporate rate, subject to certain limits. Who is Executive Pension Term Insurance suitable for
Features of Executive Pension Term Insurance
• If you are a director of a company or are an employer.
• Taken up to a normal retirement age of
• If you are a member of a group occupational pension scheme and your employer has set up a group AVC scheme.
• The policy must be set up under trust where typically the employer will act as trustee.
Restrictions on Executive Pension Term Insurance Due to the generous tax relief available on premiums, The Revenue Commissioners have imposed a number of restrictions• The policy can not be used as security for a loan and can not be assigned. • Can not be taken out in a joint or dual life capacity i.e. policy can only be taken out in a single life capacity. *Salary- there are a number of defintions regarding salary, please consult with your financial adviser regarding which applies to you.
maximum age of 70.
• For members of occupational pension schemes, the maximum amount of life cover that is allowed by the Revenue Commissioners is four times your salary* plus an allowance for dependants’ pension. • The expiry date or term of your Executive Pension Term insurance plan cannot go beyond your normal retirement age (NRA) of your company pension plan. In other words the term of the life cover must correspond to the normal retirement age of your company (occupational) pension scheme. Also, if you leave employment earlier than your NRA, the cover will cease at that date. • If premiums are paid by a company on your behalf, there are no Benefit- in- Kind implications for the policy holder (life insured).
Cathedral Financial Consultants Limited is regulated by the Central Bank of Ireland.
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INFLATION’S BACK Time to Tilt Portfolios to a Defensive Stance Dr. Constantin Gurdgiev Inflation is back, folks, and the omens are poor for those who care for preserving their wealth in years ahead. Last month, the U.S. Federal Reserve proceeded to hike the benchmark target overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent. The move, interpreted by the markets as a sign of the Fed proceeding with its efforts to gradually return monetary policy to a more normal basis, was both anticipated and well-received by the markets. However, underneath the surface of news analysis and sellside cheerleading, the underlying U.S. data bodes poorly for the mid-term prospects of a continued bull market. Positive data coming from the U.S. economy indicates continued uneven growth across the sectors, with consumer demand still racing ahead of the household income dynamics, while corporate fundamentals remaining subdued when it comes to capital investment. The financial side of the economy is doing remarkably well, deepening the disconnection between real economic activity and the financial markets. Despite a large drop in oil prices and relatively robust inventories of gasoline, the latest Consumer Price Index (CPI) data shows inflation running at 2.7 percent y/y through February 2017, after posting a 2.5 percent reading in January. February CPI increase was the weakest since July 2016, but comes on foot of a 0.6 percentage points gain in January. All in, the CPI reading to-date is at its highest levels since March 2012. Stripping out volatile energy and food prices, core CPI rose 0.3 percentage points in January and 0.2 percentage points in February – both solid gains pushing inflation toward the levels where the Fed should feel even more comfortable with raising rates.
The Fed signaled three rates hikes in 2017 and is now clearly on target, in line with both inflationary pressures coming from the tight labour markets, and the expectations concerning the Trump administration’s growth-boosting fiscal stimulus and tax policies. In a way, the Fed is racing to catch up with the expectations curve. At the briefing following the last FOMC meeting, Fed Chair Janet Yellen noted that the policymakers “…have seen the economy progress over the last several months in exactly the way we anticipated.’’ Since December, jobs gains in the U.S. economy were averaging around 209,000 per month, far exceeding the rate of increases necessary to match working-age population growth. The unemployment currently sits at around 4.7 percent against the Fed projections of 4.5 percent jobless rate by the end of 2017. The financial markets indicators of inflationary pressures forward are also flashing amber alerts. Consider the U.S. break-even rates – the rates reflecting the difference between the yield on a fixed-rate bond and real yield on the Treasury Inflation-protected securities (TIPs). In theory, if inflation averages more than the break-even rate, the inflation-linked investment will outperform the fixed-rate bond. The converse happens when inflation is below the break-even rate. In 2Q 2013, as the U.S. inflation hit record lows, market expectations for inflation 10 years out from 2013 fell to 2.4 percent. The break-even rate collapsed. Since then, the break-even rates have risen steadily, although they remain relatively low by historical comparatives.
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WEALTH PRESERVATION IMPERATIVE
TILTING PORTFOLIOS AWAY FROM RISING RISKS
The prospect of lifting rates means that investors should start re-gearing their portfolios toward income and capital preservation.
Which means that retail investors should be moving ahead of the curve, focusing more on capital preservation today and tilting away from the pursuit of low returns and higher risk gearing. Instead of traditional money market funds allocation, investors can do better by shifting to more active cash management and allowing for shorter-term positions to simultaneously increase their nominal returns and mitigate the cost of inflation.
Traditionally, capital preservation strategies involve allocation to fixed income (bonds), cash liquidity management funds (e.g. money market funds) and hedging assets, such as gold. As inflation gears up, the cost of these wealth management strategies will rise (with exception for gold). Higher inflationary pressures will mean investor locked in already low yield assets will face downward pressures on capital gains. Exiting their current portfolios allocations in order to re-gear for higher inflation environment will involve selling into a falling market, especially for the money funds and bonds. In other words, recent investors’ focus on higher liquidity needs tilting toward income or return generating portfolios. This presents a core dilemma for those investors, who entered the bonds and money markets funds boom late in the cycle. Based on the latest data from Marketwatch, public and private debt securities currently traded in the markets amount to some US$261 trillion, while stock markets capitalisation is at around US$88 trillion. A moderate 5 percent correction in debt valuations is likely to wipe out some US$ 17.5 trillion worth of financial wealth for institutional and retail investors. History tells us that the latter will take a heavy dose of the medicine due to less efficient portfolio monitoring, and slower and costlier trading. The ‘smart money’ investors are already betting on this. In its latest report, Knight Frank surveyed some 900 private banks and wealth advisory firms representing more than 10,000 ultra-high-net-worth investors (UHNWIs), those with assets in excess of US$30 million. Their number one concern for 2017-2018? How to protect their wealth from incoming shocks. Per the report, 66% of UHNWIs are concerned with wealth preservation, while 44% are focused on minimising short term risks.
Another set of strategies should be considered when it comes to putting your portfolio on a more defensive footing with respect to inflation. Since the end of the Global Financial Crisis, monetary policies deployed by the Central Banks around the world have eroded returns to precious metals and to risk hedging instruments, such as VIX. My recent research (based on the data through mid-March) shows that VIX and gold betas to S&P500 market have stayed consistently negative over the past 12 months. Holding a long-term stable share of portfolio in gold can provide a hedge against inflation and the long run impact of repricing the inflationary risks. Overall, improving global and U.S. growth outlooks, especially in the area of inflation and headline employment figures supports the thesis that the interest rates hikes targeted by the Fed are likely to continue through the rest of 2017. The downside (from the investors’ point of view) risk here is that the Fed might accelerate rate rises in 2H 2017, while the ECB might switch to faster tapering of its quantitative easing programmes. In fact, the week the Fed raised its rates, Ewald Nowotny, the ECB Council member, suggested that Frankfurt too might be looking at a deposit rate hike, before it fully phases out the current QE programme. If materialised, these risks can catch retail investors offguard – facing simultaneously a prospect of declining capital valuations on their debt exposures and the continued erosion of the real value of their portfolios through rising inflation. Taking a more defensive, pro-active approach to structuring cash management and debt holding today might be a prudent step toward investors preserving more of their wealth, when these risks take hold of the broader markets tomorrow.
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.
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Company Investments in Life Assurance Savings and Investment Plans This document gives a brief overview of company investments in life assurance savings and investment plans. It is based on Cathedral Financial Consultants Ltd. understanding of Revenue law and practice at March 2017. The tax treatment of profits from lump sum investments or savings accumulated in a life assurance product changed fundamentally for investments made after 1st January 2001.
Gross Roll Up of Investment Returns Lump sum investment and savings plans issued after 1st January 2001 benefit from the Gross Roll Up regime i.e. all income and gains in the life fund accumulate gross, with a ‘deemed’ tax charge on any growth only on each 8th plan anniversary while the contract is in force. When part or all of the funds are withdrawn, an exit tax will be deducted from the ‘profit’ element of the withdrawal, with a credit for any tax paid on any previous 8th year anniversary. Exit tax is currently charged at the rate of 25% where the plan owner is a company.
Life Assurance Investments The effect of the Gross Roll Up regime is that a company can defer tax on the investment until at least the 8th anniversary of the contract, thus allowing the company to compound investment earnings without those earnings being reduced by taxes during this period. This should lead to accelerated investment growth. Another advantage is that the life company with whom the funds are invested is responsible for the deduction and payment of exit tax. The net amount is payable to the investor.
Versus Direct Investments Where a company invests directly in a deposit account, stocks, shares, or property, any income arising from the investment (interest, dividends, rental income) is subject to tax on an annual basis at the 25% rate of Corporation Tax payable on non-trading income. In the case of close companies, such income could also be subject to a ‘close company surcharge’ (an additional tax of 20%) if it remains undistributed within 18 months of the end of the accounting period in which it arose. Obviously Capital Gains Tax would also be payable on any gain made on the disposal of equities or property – normally at the standard CGT rate of 33%.
Options Gross Roll Up with a tax charge on each 8th anniversary and an exit tax of 25% on the profit made on life investments. Versus 25% pa on income, and 33% CGT at the end on direct investments.
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Company Investment Life Assurance Investment Plan Versus Direct Investment Investment Plan where the plan owner is a company
Direct Investment by a company
Investment choice
Wide range of funds, Equity, Gilts, Cash, Property, a mix, specific sector Equity Funds available.
Equities, Gilts, Deposits and Property (depending on size of funds).
Returns
Performance will be dictated by investment choice, level of risk, term of investment.
Tax on Income
Profit element of any (annual) withdrawals subject to exit tax at 25%.
Annual Investment Income subject to Corporation Tax at 25%*.
Capital Returns
Profit element of all withdrawals subject to exit tax. (25%)
Disposal of shares / property subject to Capital Gains Tax (33%) No CGT on Gilts, however as most gilts return the nominal value, unlikely to produce capital gains.
Suitability for Income Versus Capital Growth
Ideally suited to providing capital growth, particularly from a tax viewpoint. All income and gains accrue gross within the th fund. Tax liability only arises on each 8 anniversary of the contract with a credit for this tax when funds are ultimately withdrawn. Exit tax rate on profit at 25%. Exit tax is deducted and paid to the Revenue by the life company.
Deposits unlikely to provide any significant income or capital growth and historically have not even kept pace with inflation in the long term. Gilts unlikely to produce capital gains. Equities can provide capital growth in the long term, but part of the return is automatically paid out as income dividends.
Close Company Surcharge
Return not treated as investment income.
Potential liability for certain companies if income arising remains undistributed.
*Dividend Withholding Tax is not deducted on dividends paid by Irish resident companies to other Irish tax resident companies. Investment costs / charges must also be taken into account. In the case of direct investments: stamp duty, brokerage commission and cost of investment advice. In the case of life assurance bonds: entry or exit charges and annual management fees.
We advise that your client seeks professional tax and legal advice as the information given is a guideline only and does not take into account your client’s particular circumstances. Information is correct as at March 2017 but is subject to change.
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Cathedral Financial Consultants Limited is regulated by the Central Bank of Ireland.
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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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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IRELAND’S LARGEST WINDFARM OPENS FOR BUSINESS Ireland’s largest windfarm, Energia’s 95MW windfarm at Meenadreen in south Donegal, has officially started supplying power to homes and businesses across Ireland, setting a new Irish record. The windfarm contains 38 turbines and is capable of producing enough electricity to power 50,000 homes. It is the culmination of years of development work and construction, which started in 2014, took 26 months to complete. Energia Renewables has invested €145m to develop the windfarm, bringing its total investment in wind farms developments to over €500m. Crucially, Meenadreen will reduce the island’s carbon dioxide emissions by 100,000 tonnes each year. Meenadreen has 38 Nordex N90 2.5MW turbines and was
NEW JOB CREATION AS THREE NEW COMPANIES SET UP IN IRELAND About 35 high-skilled jobs are to be created as three new companies set up operations in the Republic. UK wave energy tech company Wavepower Technologies is to establish a development research group at the Entrepreneur Ship in Ringaskiddy, Co Cork, creating up to 10 advanced engineering research jobs. The Entrepreneur Ship is part of a strategic partnership between University College Cork, Cork Institute of Technology and the Naval Service established to unlock Ireland’s maritime and energy potential. Wavepower CEO, Mark Gillan commented that the company has an ambition to develop world-leading technology to capture the immense energy resource in ocean waves. Acknowledging it was not a quick or easy task Mr Gillan asserted the company’s commitment to its vision and believes with the right ingredients they can find a way to overcome the challenges of the marine environment and develop commercially viable wave energy convertor technology.
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financed by loans from NordLB supported by Euler Hermes. Construction works were carried out by Denis Moriarty “the Kerries” Limited and electrical works by Kirby Group Limited. Engineering services were provided by Wind Prospect and Jennings O’Donovan, with legal support from Arthur Cox. Energia Renewables is among Ireland’s leading providers of sustainable green energy and 25% of Ireland’s wind power is provided through Energia to homes and businesses. Energia currently supplies almost 1,000 MWs (1GW) of renewable energy, with more on the way. Peter Baillie, MD of Energia Renewables commented that Energia has invested over €350m in developing and constructing new windfarms and that the company would like to thank the local community for their support. The Meenadreen windfarm will be providing further community funding for the local areas and local authority rates for the lifetime of the windfarms.
Separately, 12 Dublin-based jobs are to be created with software company Kochava, which is based at the Fitzwilliam Business Centre in Dublin 2. The hub will be the company’s European headquarters for product support and regional sales for clients and prospective clients. The main functions of the operations will include sales, marketing and technical support. Misfits, a US-registered digital agency and philanthropic organisation, has selected Galway for its global headquarters. It is creating 13 new jobs at its new startup subsidiary, Snapstory. The new Snapstory enterprise Android application allows non-profit organisations to measure, evaluate and tell authentic stories about the work they do across the world. All three companies were introduced to the Republic through ConnectIreland, the company responsible for delivering the Government’s Succeed in Ireland initiative. ConnectIreland Chief Executive Joanna Murphy said the announcements were proof “the power of harnessing the connections and goodwill built up by generations of Irish people at home and abroad”.
AMAZON PLANNING €1BN DATA CENTRE CAMPUS IN DUBLIN Internet giant Amazon is planning to build a €1bn data centre campus in Dublin as it tackles a global surge in the use of its web services, as well as its own online shopping network. The company has just submitted plans to build a huge, 20,739 sq metre (223,000 sq feet) data centre in Mulhuddart. The data centre is likely to cost up to €200m, but Amazon said it might build as many as seven more data centres at the 26-hectare location owned by the IDA, which is due to become a data-storage facility campus. That could involve an estimated future spend of another €700m. Those data centres would each be smaller than the
UNEMPLOYMENT ON COURSE TO DIP BELOW 6% LATER THIS YEAR Unemployment is now on course to dip below 6%, close to what economists consider full employment, by the middle of this year following another monthly slide in the official jobless rate. The latest data for February, released by the Central Statistics Office (CSO) data, released in early March, put the State’s unemployment rate at a nine-year low of 6.6% in February. The number of workers classified as unemployed fell by 2,900 to 145,100 during the month, which equates to an annual decrease of 36,200. The Economic and Social Research Institute (ESRI) has predicted the economy will return to full employment, or an unemployment rate of 5% by 2020. However, at the current rate of job creation this may be achieved sooner. Davy analyst Conall Mac Coille said he now expected unemployment to fall to below 6% by the middle of this
WATERFORD LEADS DRIVE TO ESTABLISH IRELAND AS GLOBAL AGRI-TECH HUB The President of a leading Institute of Technology has claimed that Ireland is home to the top, international players in the agriculture and ICT industries and has the potential to become a Global leader in smart agriculture. Prof. Donnelly is already globally renowned as the co-founder of the Telecommunications, Software and Systems Group (TSSG) at Waterford Institute of Technology, a major incubation hub for ICT innovation. He now wants technology innovators to partner with leaders in Irish agriculture within the region and across Ireland to drive sustainable regional growth and put Ireland on the global map as leaders in the agri-tech
one currently planned. Construction of the latest Amazon data centre - codenamed ‘Project G’ - is set to begin this year and will take about 18 months to complete. At the peak construction phase, about 400 workers are expected to be on site. Amazon, headed by Founder and Chief Executive Jeff Bezos, has just applied to Fingal County Council for permission to build the data centre, which will bring the total it has around the capital close to 10. Amazon uses its data centres for its own internet operations, but also for its web services business, which offers data hosting to other companies. Its global clients include firms such as Netflix, Expedia, Unilever and Kelloggs. Amazon said it had chosen the site in Mulhuddart for its latest data centre, partly because it is close to its other facilities in the area.
year. Mr Mac Coille said returning migrants and low participation rates suggest that there is still slack in the labour market. He said net emigration had flattered Ireland’s unemployment rate in the past. However, he said Ireland experienced its first year of positive net inward migration of 3,100 in 2016, helping to add to the labour force. IDA chief executive Martin Shanahan said that while the trend is welcome it shouldn’t be taken for granted and Ireland needed to continue to focus on its competitiveness. Recruitment website Indeed, meanwhile, highlighted the top 10 roles being sought by employers in Ireland, which included sales managers; nurses; software engineers/ developers; and accountants and auditors. The group’s economist, Mariano Mamertino, said that as Ireland‘s unemployment falls, employers will find it increasingly difficult to source suitable candidates to fill their open roles. Companies must develop smart ways of finding this talent or face missing out on growth.
industry. The alignment of the ICT and agriculture industries has the potential to totally re-energise the Irish economy outside of Dublin and totally transform our regional economies he says. Speaking at the second day of the eDIGIREGION ‘Sustaining Regional Innovation and Growth Through Partnership’ conference at the WIT Arena, Prof. Donnelly said that Ireland is already a global player in the agricultural industry and 9 of the top ICT companies have based the European headquarters here. He believes Ireland has the potential rather than Ireland as the potential to be a leader in smart and precision agriculture through the combination and the alignment of the ICT industry and the agriculture industry. We have established and put together a proposal for investment in precision agriculture. Its focus is to IT and to use the knowledge within the region to drive a new agritech industry.
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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 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.
Barry Oliver Director of Sales/Financial Advisor 087-9029552
boliver@cfc.ie
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.
Noel Larney Financial Advisor 087-1436800
087-6664300
pkeenan@cfc.ie
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.
John Kerr Director/Financial Advisor nlarney@cfc.ie
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.
Larry Murphy Financial Advisor 086-2600266
Paddy Keenan Financial Advisor
lmurphy@cfc.ie
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.
087-6966709
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.
John Gallagher Financial Advisor 087-2934114
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 19
RANGE OF SERVICES PROTECTION
PENSIONS
•• •• •• •• ••
•• 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 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