Just over 11 years ago, I wrote my first blog, Are you passionate about what you do?. The reason I wrote it and the 498 other blogs since is that I was starting out on my own with 9 clients, I had lots of time and didn’t know where to get new clients from. Blogging seemed like a good way to get my name out there. Bluewater is still going 11 years later and I’ve kept on writing as I enjoy it and people seem to benefit from what I have to say (some of the time).
Eleven years is a long time in financial services and a lot have changed over that time, so I am going to look at some of those changes. I’ve thrown in a few links to some of the past articles I’ve written on some of these topics. 😉
Financial planners used to say “no one ever asks for a financial plan”. People would contact you about pensions and investing. It was only after talking to them about themselves and what they want in life and how we can help them see this through that they would warm to the idea of a financial plan. That is no longer the case. People contact me all the time now and a financial plan is exactly what they want. I have lots of financial planning clients and that is all we do for them.
They have all the products they need through work and they are happy to invest their excess cash themselves. Where they do need help is ensuring that they have the correct structures and they will get the outcomes they want at the end, especially when there is a change in priorities and plans.
Investing is becoming more commoditised, with a lot more people clued into what they want and how markets work (there are still lots of people who have no interest and look for guidance). People are more prepared to invest in equities for long term growth. A great example of this is the recent sell off in the markets. I had more clients contact me about it being a great buying opportunity than I had clients panicking and looking to sell…which was none.
Parents have helped out their children with deposit money for property for decades. It used to be give them a lump sum when they want to buy and say nothing to the Revenue. This amount is supposed to be declared to the Revenue and your child’s tax free threshold is reduced by this amount.
Parents are now availing of the annual gift exemption where a parent can gift their child (or anyone else), up to €3,000 a year. They are putting up to €6,000 between them into a trust for their child, which their child can use to buy a property in the future. It is clean from a Revenue point of view and does not impact on any future inheritance that your child may receive. Parents can also segregate funds that they want to give to their child and it is done annually instead of a parent taking a lump sum out of their personal wealth when their child is older.
One person company pension plans died in 2022. I was on holidays at the time and all hell broke loose, with sudden strict deadlines on getting cases issued (which all had to be unwound afterwards anyway). EU legislation and The Pensions Authority shut them down, there was too many of them! Come 2026, every single one person company paid pension will have to be transferred either to a Master Trust or a PRSA. That is going to be a massive job for everyone involved!
We also saw annual funding checks removed on PRSAs, which moved them to the top as the pension plan for company directors.
More and more people are turning to advisors who charge fees and not commissions. This reduces costs for clients and is more transparent. There is still a long way to go on this and we need Central Bank intervention but the more people who insist on paying fees, the better.
From a management point of view, something I wish I had done years ago is having defined meeting times. I used to have meetings at any time during the day and could be pulled all over the place. Now, my available meeting times are 10am and 2pm (there are exceptions). I put those times into the Appointment Schedule function on Google calendar and let the client chose the available time that suits them best. There’s no toing and froing trying to arrange a suitable time. There are many occassions when a client has to reschedule and they just cancel the appointment and book in a new time without having to contact me. I wish I’d done this years ago!!
Steven Barrett
12 August 2024