Case Studies

Case Study 1:

  • Two business owner directors (50:50 owners)
  • Both male mid 40's - married with young children
Issues:
  • Business solid and growing quite young
  • Taking modest salaries for the time being
  • Only small pension funding but intend to fund more aggressively in future as business grows
  • Big concern now - Protection issues
    - Life cover - only mortgage cover in place - no 'family protection' in place

    - No 'income protection' if unable to work due to illness or injury

    - Worried what would happen shareholding if either died suddenly
  • As only taking modest salaries, funding these covers personally is expensive
Solution:
  • Set up the following covers

    • 1. Company Directors Life insurance on both for €250k each

    a. Cost - c€55/mth - paid by company.

    2. 'Keyman' Serious Illness cover for €75,000 on each.

    a. Cost - c€75/mth - paid for by the company.

    3. Pension Term Life assurance as 'Family protection' on both for €500k to age 60.

    a. Cost €65/mth for each, paid by company as a trading expense (12.5% corpo tax relief) but no BIK paid by directors.

    4. Income protection (PHI) on each director for €36,000 (€3,000/mth) payable after 26 weeks deferred period, to age 60.

    a. Cost €66/mth for each, paid by company as a trading expense (12.5% corpo tax relief) but no BIK paid by directors
  • Will review all in 3 to 5 years depending on how business is going

Case Study 3:

  • Senior business executive (shareholder of his company)
  • Age 40 - married with 3 teenage children.
Issues:
  • Profitable business and company funding pensions €20/30k per year.
  • Client aware that the next 10 years are crucial to eventual worth of his pension 'pot' in retirement.

    • - 5% shareholding director - so ARF (ownership of pension fund) options available at retirement.
  • Several legacy pension benefits from self-employment and previous employments. Looking to consolidate all in one place.
  • Very poor experience with fund managers and managed funds in past.
  • Very sceptical of costs and charges involved. Wants more transparency of costs and more involvement in the pension investment decisions.
Solution:
  • Set up self-administered trust (SSAP) with independent Pensioneer Trustee.
  • Consolidated ALL pervious pension benefits into new SSAP.
  • All new contributions will enter SSAP without any charge.
  • Happy with Trusted Advisor Group Multi Asset Platform (TAGMAP) and the principles of tactical asset allocation strategy.
  • Opted for a Passive investment selection - offering annual fund management charge of c49 basis points.
  • Agreed a 'win' bonus for Foresthill if average performance of the portfolio exceeds set target levels.
  • Much happier with transparency of cost and involvement in pension investment decisions.

Case Study 2:

  • Doctor – Aged 45, Married, 2 Kids
  • Sole Trader with profits of €150,000 - €200,000
  • Recently purchased a new home, purchase price €1 million - Loan of €750,000
  • Owns a practice premises on the High Street, prime location, value of €1+ million, which includes a small site with potential for an apartment, in own name with no borrowing.
Issues:
  • Very large homeloan
  • Not utilising significant commercial practice premises
  • Cannot pay self rent for property he owns
Solution:
  • Split portfolio between practice and site
  • Sold property to his wife for €700,000
  • No Capital Gains Tax or Stamp Duty
  • Now charges rent to practice
  • Created tax offset for practice
  • Took out large portion €300,000 off homeloan and removed short term loans
  • €300,000+ remaining tax free money for investment purposes
  • Diversified from property into managed funds
Alternative solution:
  • To repay loan on a pension backed mortgage basis

Case Study 4:

  • Female - early 30's - single
  • Involved in Road Traffic Accident
  • In receipt of compensation claim - €2m
Issues:
  • Unable to work now or in the future

    • - So will have no other income or retirement funding
  • Compensation claim must pay for all expenses

    • - Medical / Healthcare / Living
  • Looking for tax efficient solution to all above
Solution:
  • Trusted Advisor Group Multi Asset Platform - tactical asset allocation strategy
  • Income need provided via allocation to Irish Government Bonds & supplemented by Canada Life Pecunias Fund
  • Favourable tax status under revenue 'insurance compensation' category
  • Profile of investment strategy to provide income and generate real growth in diversified fashion managing risk
  • Set up half yearly review & rebalancing arrangement

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