Why financial advice is important today, and into the future
Zurich pension research finds an alarming number of people don’t have a financial advisor or broker, and this according to Linda Gallagher from First Ireland, is cause for concern
“Those who receive impartial financial advice have nearly double the savings and investments than those that don’t.” Photograph: Shutterstock.
“I cannot pretend that I chose the insurance industry for my career because it chose me,” Linda Gallagher recalls. Having worked in the same advisory firm, First Ireland, for over 36 years, when she initially started she thought she was going to work for a recruitment company. “I didn’t realise that it was a start-up insurance brokerage until after I started working there.”
Gallagher not only has the experience and technical acumen required to fulfil customers’ requirements across the full spectrum of insurance and financial planning needs, she is also extremely passionate about what she does.
“As a career, the insurance industry offered me the opportunity to use a broad range of skill sets. It is a caring profession because I genuinely care about my clients' outcome, and in this way it is very fulfilling.”
Aside from her responsibilities as head of compliance and joint managing director of First Ireland, Gallagher says it is imperative that she keeps up-to-date with the industry and the market.
She does not underestimate the responsibilities and complexities involved in managing a person's financial affairs. “An important part of my role is to cut through the maze of complexity and jargon that exists and provide practical support to my clients. I strive to ensure that they receive quality financial advice that will make a real difference to them,” she explains.
Given the high regard Gallagher holds for professional financial planning advice, how does she feel about Zurich’s research which found a worrying amount of those surveyed don’t have the benefit of a financial advisor*?
“Research carried out in Ireland a number of years ago found that those who receive impartial financial advice have nearly double the savings and investments compared to those who don’t get advice. In addition, they are more financially protected, have higher valued pensions and feel more financially confident about their future.”
According to Gallagher it can be difficult to make sound financial decisions without guidance from an advisor. “There can be so many better ways of doing things. Even a simple transaction such as a mortgage protection policy can bring up a number of questions. For example, should a policy incorporate a conversion feature, should it be dual or joint life, what are the tax implications … these factors are areas where customers may need advice.”
Engaging with a financial advisor is especially important when seeking guidance on more complex issues such as devising an investment strategy or planning your retirement.
“In my experience, helping investors develop a carefully constructed investment plan, a number of factors must first be discussed,” Gallagher explains. She says that setting goals and objectives is important, as is the level of risk an investor is prepared to take. It is also crucial that the investor thinks about their level of risk, and how they will fair against a backdrop of potential downturns and market noise. These questions and other important factors cannot always be made without the assistance of a financial advisor, Gallagher reiterates.
As the saying goes, ‘time is money’, and this is certainly the case when it comes to business owners, who Gallagher says are often so focussed on driving their own business forward, they simply do not have the time or headspace to attend to their own financial planning matters.
“That is where we come in,” she says. “Working closely with them, we initially consider their risks and exposures and ensure that solutions are in place for those as a matter of priority. We can then move on to opportunity planning, for example, making sure they are availing of all tax reliefs available to them. From pension planning right through to entrepreneur and retirement relief – we cover the whole remit.”
Gallagher agrees that pension planning doesn’t get her clients’ pulses racing. However by shifting the focus to the end game, they then aspire to a particular objective at a particular point in time and quickly realise that this type of planning will give them a better opportunity to reach their financial goals.
Your future financial health is not based on ad-hoc decisions made at various points during your life. A decision you might make today may totally conflict with one made a number of years ago. At different times in our lives, our financial needs can become more complex, our financial commitments can be more demanding and people’s time might not always be in large supply.
Gallagher argues that it is essential therefore that a future financial plan is structured and takes many aspects into account, something that often requires the expertise of a professional.
“Having a structured financial plan that is reviewed regularly and flexible enough to deal with changing circumstances, is critical,” she concludes.
*Source: Zurich Pension Survey 2018
It’s important to think about the future. The choices you make now could impact your future and this is especially the case when thinking about pensions. If you’re wondering where to start, you can find a local financial advisor near you with the Zurich Advisor Finder.
Zurich Life Assurance plc is regulated by the Central Bank of Ireland.