Unit A4,
Santry Business Park,
Santry,
Dublin 9,
Tel: (01) 8623155
Website: www.classicfinancial.com
no offers added
- Life Assurance
- Income Protection
- Business Insurance
- Investments & Savings
- Pensions
- Retirement Options
- Mortgages
Classic Financial Services established in 1989. Interview with Gerry Maguire.
Q. What advantages can you offer compared to somebody buying life insurance or investment products directly from an insurance company?
A. We can offer choice without any additional cost. We can offer clients a personalised service compared to the service provided by a large financial institution.
As part of the initial process, we carry out what is known as a "fact find" which involves securing relevant information from the client such as marital status, details of financial dependants, existing policies, salary, occupation and so on. We compile the fact find and research the most suitable options for the client. Then we draw up a recommendation to help the client in the decision making process.
Q. What are some of the misconceptions people have about life insurance?
A. Some clients think life assurance is more expensive than it actually is. Also, some clients concentrate on whole-of-life insurance which is not as popular as it used to be because of escalating costs in the later years.
I normally recommend term assurance where you have a set period of, for example, 15 to 20 years to coincide with perhaps when the client's children are no longer financially dependent. Term assurance has a set level of premiums and this level of premium does not change over the term of the policy.
Q. What are some of the misconceptions people have about income protection insurance?
A. Some clients confuse serious illness insurance with income protection insurance. Serious illness cover is a lump sum paid on diagnosis of a serious illness (as specified in the policy) whereas income protection insurance is broader - it covers you when you cannot work due to illness, injury or disability - and is paid weekly. Also there are misconceptions about poor payout of benefits.
Q. Do you think a lot of people still hold the attitude "it will never happen to me"?
A. Definitely. This is where peace of mind comes in. When people sit down and think about it or have a chat with their spouse they soon realise that, for a relatively small premium, they can secure financial peace of mind by taking out an insurance policy.
Q. How does somebody decide whether to go with serious illness cover or income protection?
A. Income protection is a weekly benefit. Serious illness is a lump sum benefit. One of the more attractive aspects of income protection is that there is a tax break involved. With serious illness cover there is no tax break.
Once serious illness cover is paid out the policy finishes whereas with income protection the pay out is ongoing and the policy stays in force throughout the term of the policy regardless of the number of claims. For example, if a client has a heart attack at 35 and is out of work for say 5 years, he or she can make a claim on their income protection policy; then if s/he goes back to work and is out ill again at a later date, the same income protection policy will cover the client again.
Q. Will the State show a self-employed person much sympathy if they have a serious accident and cannot work?
A. No, definitely not. There is no automatic long term State cover for the self employed. Therefore, income protection insurance is hugely important for the self-employed.
Q. What are some of the pitfalls people make when taking out protection and investment policies?
A. In some cases, what clients want and what they actually need may be very different.
Also, people don't revise their policies regularly. Peoples' lives and circumstances change, and it's important that this is reflected in their insurance policies. A good financial advisor will recommend a regular review of a client's protection insurance, pensions and investment portfolio.
Q. Do you think the financial crash has made people lose trust in financial institutions?
A. People have certainly lost trust in some financial institutions. However as far as financial advice and financial advisors, people need financial advice now more than ever. What exactly am I getting for this? What am I covered for? These are the types of questions that our clients are asking us on a regular basis.
Q. If somebody is retiring, what guidelines would you give to somebody with a lump sum?
A. Seek independent financial advice. From the point of view of retirement, older people will have a more conservative view of risk. If you are, for example, aged 65 you will be focusing on a relatively short timescale. Also, it is important to find out what form of capital protection, if any, is attached to the investment.
Q. Has the market changed with regard to risky investments?
A. Most clients are now looking for 100% capital protection and asking who is providing this capital protection. Risk depends on the age profile of the individual, their financial circumstances and their attitude to invest risk.
Q. What are some of the misconceptions that people have about financial advisors?
A.
Some people might think it is an extra cost to use the services of a financial advisor but in many cases a client can secure cheaper and better products at no additional cost.
Other people think that financial advisors might favour a particular financial institution or product so as to earn more fees or commission but this is not the case as financial advisors by law must put their clients? interests above commissions in their recommendations. A compliance process has to be followed in accordance with Central Bank regulations and financial recommendations letters have to be compiled and issued to clients when providing financial advice.
Q. What gives you the greatest satisfaction in this job?
A. A great source of satisfaction in this job is when a client fully engages in the fact find process. Once you know all the facts, you can match up their needs with financial packages that will be suited to them. At the end of the process, your client is satisfied with the service they receive and as a financial advisor you are paid for the service and advice you provide.
It?s also nice to receive positive feedback from clients. For example, when reviewing some old policies recently, we discovered a client of ours, now living in Canada, had reached retirement age. We contacted him to remind him about a policy he had taken out. He wrote to us to say he had totally forgotten about it! His testimonial is now up on our website. That sort of feedback gives you a lot of job satisfaction. We were dealing with another client in his 60s who was adversely affected by the property bubble and a reduction in the value of his property portfolio. He thought he only had one pension policy. I discovered he had, in fact, a second pension policy. This was a nice surprise for the client - and an unexpected source of income for him. He sent me a letter to thank me for the service we provided for him.
When it comes to pensions, some clients think that financial advisors just provide a service in relation to pension savings but in fact a lot of our pension business now is retirement planning and providing advice in relation to settling clients' pension benefits. It?s important that clients look at all their options before drawing down their retirement funds. For example, a client I was recently dealing with, who is in his 50s, had a number of different pension policies. With recent changes in legislation, we were able to advise him of the possibility of cashing in one or more policies. He drew down ?40,000 cash tax-free and transferred some of his pension fund to avoid the recently introduced Pensions Levy.
I have over 30 years experience in the area of pensions. I enjoy assisting clients in planning for their retirement and getting the most from their pension options. This gives me a lot of job satisfaction and provides the client with a good ongoing service.
Q. What would be your five essential financial tips you would give to somebody?
A. 1. Review
Review your life assurance, investments and pension policies regularly. Are they up to date and still right for you?
2. Stick to a Budget
Keep track of spending and stick to a budget - you need a budget regardless of your level of earnings.
3. Save regularly
Put aside a regular amount each month to invest for the medium to long term. Decide how much you want to save (within reason) and work out your spending budget from what is left.
4. Pensions
If you are working, one long-term aim is likely to be a financially secure retirement. Start saving for your retirement early, review the amount of your pension investment regularly and ensure you seek the advice of an independent pension consultant.
5. Set goals
Resolve to make improvements in your financial circumstances by choosing one of the above areas at a time and set goals to include all these tips into your ongoing financial lifestyle over a realistic timeframe.