Serving a nationwide client base, Blueprint Financial Planning was established to assist people to achieve their desired lifestyles through proper financial planning. The company mantra – Your goals, your future, your plan – underlines that mission. Director John O’Driscoll believes regular visits to your financial adviser – just like those to your dentist, GP or solicitor – are important to take the pulse of what’s going on in your life.
“It is very important to engage with your financial adviser on at least a yearly basis because people’s circumstances can change very quickly,” O’Driscoll says. “Financial outgoings may increase at short notice, the recent interest rate hikes on mortgage repayments being an example of this.”
He adds: “I believe if you want to achieve your desired financial goals and objectives you need to be checking in regularly with your adviser to make sure you are on track.”
The role of a financial adviser entails much more than selling policies, O’Driscoll says; they are highly educated and skilled professionals who can add value and provide expert advice to people, much like other professional service providers.
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More to financial advice than the big three
O’Driscoll also believes that what have come to be known as the ‘three Ms’ of our financial lives – marriage, mortgage and maternity – are out of date in 2023. “Traditionally people engaged with a financial adviser when they had one of life’s transition events, such as getting married, having a baby or buying a house. It was almost like people felt they needed to then get a financial adviser as something major had changed in their circumstances,” he says. “I think people now are far more interested in their finances and are more goal-oriented.”
O’Driscoll has noted an increased demand for cash-flow planning in recent years, as well as for preparing for potential future scenarios and answering the what-if questions.
“There has been more mainstream media coverage of personal finance, which has made people more aware of the need for pension provision,” he says. “Nowadays people want to make their hard-earned money work better for them.”
Another traditional concept, the rainy day fund, has also adjusted to suit the demands of modern living, he believes. “I don’t believe the rainy day fund is an out-of-date concept,” says O’Driscoll. “It’s prudent for people to have accessible cash available if the ‘God forbid’ scenario arises – and you need an emergency fund in place to meet such demands. However, what I do firmly believe is that people should have both a rainy day and a sunny day fund.
“It’s important that we view our personal finances positively. It’s good to have financial goals and objectives that centre on hobbies, pastimes and events that bring us happiness – hence the term ‘sunny day’. I think this concept changes the psychology of money for people and makes it more tangible when they achieve a goal like going on a trip of a lifetime or buying their dream car.”
I often recommend to clients who have family businesses to engage with an independent HR consultant to ensure a clear chain of command if the business is being taken over by a new generation
— John O'Driscoll
In dealing with a wide range of clients, both personal and commercial, Blueprint Financial Planning has witnessed at first hand the economic pressures forced upon many enterprises over the last year. “Undoubtedly it is challenging at the moment for family businesses with rising energy costs, the threat of VAT hikes in certain industries and staff looking for pay rises in the face of increased living costs,” O’Driscoll says.
“I myself come from a family business, John O’Driscoll Motor Factors in Skibbereen, and like all small businesses we have had to analyse our outgoings and shop around for insurance and utility providers to see if savings can be made. What I think most small businesses should do is engage with their accountant and financial adviser and see how best they can manage their money.”
O’Driscoll agrees that family businesses are more prone than other types of companies to experiencing stress in areas such as shared ownership, while leadership squabbles and legacy issues can also be more typical – but he points out that all businesses have their challenges.
“What is vitally important for a family business is succession planning and this is an area where financial advisers can really add value,” he says. “A proper succession and financial plan can ensure not only maximum wealth extraction and tax efficiency but also a seamless passing of power to the new management.
“I often recommend to clients who have family businesses to engage with an independent HR consultant to ensure a clear chain of command going forward if the business is being taken over by a new generation of the family. This may help to iron out any potential issues around legacy and staff unrest, especially if incumbent staff were used to a certain management style for a number of years.”
To the question of whether family businesses should they be better supported by Government, particularly given that they employ more people in Ireland than multinationals, O’Driscoll’s answer is succinct. “One hundred per cent,” he replies. “Ireland has obviously benefited massively from foreign direct investment over the years, with our low corporation tax rate, a skilled workforce and geographic location making us an ideal location for multinationals. However, there are so many family businesses in all corners of Ireland providing essential products and services that are the backbone of the economy.”
People who work for multinationals are very well looked after from an employee-benefits point of view – income protection, death in service, pension and often stock options. If someone in a family business is out sick, in contrast, they often have a limited amount of sick pay and must rely on the state pension after retirement when affordability does not allow for private provision.
“We pay a lot of tax in this country, both direct and indirect, and I believe more provisions are needed for small family businesses and their staff, especially around sick pay and inability to work,” says O’Driscoll.
Although these are turbulent times nationally and internationally, O’Driscoll takes a generally optimistic view of the years ahead. “Opportunity-wise, I think the proposed pension auto-enrolment scheme due in 2024 will have a big impact and should go a long way to addressing the oft-mentioned pensions time bomb that we as a country are facing,” he says. “Also, there is a reported €150 billion on deposit in Irish banks at present earning no interest; I believe there should be more attractive options for people to invest.
“The proposed change by Finance Minister Michael McGrath to reduce exit tax on life insurance investment funds would be very welcome. The current system of charging someone 41 per cent on any gain made on their investment, on monies they have already paid income tax on, and on USC and PRSI is very unfair, in my view. Challenges I would envisage going forward would be around whether or not Ireland can maintain its current corporation tax rate long term and what view potential new governments might take on taxation policy.”