Goodbody/ISEA
INFORMATION EVENING
OCTOBER 2014
Goodbody/ISEA
October 2014
MARIA ANGELES PONS
Financial Planning Manager

Introduction/Welcome
Goodbody/ISEA
October 2014
URSULA TIP
President ISEA

Introduction/Welcome
Goodbody/ISEA
October 2014
DERMOT O’LEARY
Chief Economist Goodbody

Economic Prospective
Spain & Ireland
Europe’s growth beacons?
Economist: Dermot O’Leary
23 October 2014
Tel: +353 1 641 9167
Email: [email protected]
Agenda
• The euro area crisis – the never-ending story?
• Spain & Ireland – brothers in arms
• Ireland – Europe’s growth beacon
• Budget 2015 – Growth allows prudence to slip
6
From sovereign crisis to deflation concerns
Sovereign yield movements in the euro area
16
Portugal Bailout
14
%
12
10
8
Irish Bailout
Greek
Bailout II
Greek
Bailout I
Draghi –
“Whatever it
takes”
6
4
2
0
Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep
10 10 10 11 11 11 12 12 12 13 13 13 14 14 14
Source: FactSet
Germany
Ireland
Spain
Italy
7
Growth disappointing expectations
Euro-area growth forecasts for 2014
3.0
2.5
% YoY
2.0
1.5
1.0
0.5
0.0
Source: Bloomberg
8
France & Italy are the culprits
Change in GDP forecasts - Oct. 2014 versus Oct. 2013
2.5
2.0
% Change
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
Euro area
Source: IMF
Ireland
Spain
2014
Germany
Italy
France
2015
9
Current a/c positions in the euro area
% of GDP
Balance of Payments current a/c positions
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
1999 2001 2002 2003 2004 2006 2007 2008 2009 2011 2012 2013
Spain
Ireland
Germany
Source: FactSet
10
Rebalancing Act
Total Construction Output as a % of GDP
30%
% of GDP
25%
20%
15%
10%
5%
0%
2007
Source: Euroconstruct
2008
2009
2010
Ireland
2011
2012
2013
2014
Spain
11
Becoming competitive again
Change in unit labour costs 2009-2014
15%
10%
% change (2009-2014)
5%
0%
-5%
-10%
-15%
Source: Eurostat
12
External assistance required
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Source: OECD
Top export destinations - Ireland
25%
20%
% of Total
% of Exports
Top export destinations - Spain
15%
10%
5%
0%
Source: OECD
13
Ireland – Europe’s growth beacon
Contributions to growth
12%
10%
% contribution
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014
Source: CSO, Goodbody
C
G
I
Stocks
NX
GDP
14
Government debt levels remain high
Government debt levels beyond 2014 under different scenarios, based
on a 3% primary surplus & 4% interest rate
140
120
1987 rebased to
2014
Gross Debt/GDP
100
80
2% growth
60
4% growth,
40
20
0
6% growth
-20
-40
1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Source: Goodbody estimates
15
Key conclusions
• European crisis is not over, but concern is very much focused on France & Italy – there is
value in an economic adjustment programme
• Fiscal leniency bargain in return for structural reforms
• ECB is likely to respond with further action, but will likely fall short of full-blown QE
• Stress tests will be important milestone – particularly for Spain and Ireland
• In Ireland, a broad-based and sustainable recovery now in evidence
• Danger that fiscal policies will be determined by politics rather than economics
“We all know what to do, we just don't know how to get re-elected after we've done it”, JeanClaude Juncker
16
Goodbody/ISEA
October 2014
ALISON MANLEY
Director of Product Solutions
QIAIFS
Everyone is moving to Ireland
Alison Manley
22 October 2014
What do these properties have in common?
19
QIFs become QIAIFs
Qualifying Investor Alternative Investment
Fund
• Tax efficient investment vehicle, particularly for
real estate.
• Few investment restrictions.
• Non-Irish resident investors receive their gains
gross.
• Regulated by the Central Bank of Ireland.
• Subject to the European Alternative Investment
Management Funds Directive.
20
QIAIF service providers
Dublin is a global centre of expertise
• Alternative Investment Fund Managers (AIFM)
• Investment Managers
• Legal Advisers
• Tax Advisers
• Administrators
• Custodians
• Valuation Agents
• Auditors
• Company Service Providers
• Property Managers
• Regulators
21
QIAIF service providers
Dublin is a global centre of expertise
• Alternative Investment Fund Managers (AIFM)
• Investment Managers
• Legal Advisers
• Tax Advisers
• Administrators
• Custodians
• Valuation Agents
• Auditors
• Company Service Providers
• Property Managers
• Regulators
22
Some big numbers
22,000
The number of people providing services to funds
€2.9tr
The total net value of funds administered in Ireland
40%
Ireland’s market share of AIF administration
1,848
The number of QIAIFS regulated in Ireland
€1.7bn
The gross value of property assets we manage in QIAIFs
23
Goodbody/ISEA
October 2014
BRENDAN MCGINN
Director of Pensions
Pensions
Goodbody and Pensions
ISEA
October 2014
Brendan McGinn, Director of Pensions
Trends
•
Funding levels increasing.
–
•
Tax shelter or replacement income?
Property back on the agenda
• IPUT
• REITs
• Direct
•
DB schemes
–
–
•
•
Closing
Voluntary transfers out of Defined Benefit schemes by former members
Overseas transfers.
Social Welfare pensions
26
Goodbody Pensions Business
•
Wish list Budget 2015
– Stability
– Certainty
– Removal of levy
•
Re-establishment of trust?
Pillars of retirement provision
4. Earned income in
retirement
3. Savings & investments
2. Private pension
1. State Pension
(Contributory)
28
Service to pension clients
•
Small Self Administered Schemes/ARFs
•
Investment management , reporting and tax compliance services as an
approved Pensioneer Trustee and Qualifying Fund Manager
•
Personal Retirement Savings Account
•
Goodbody Stockbrokers are approved by Pensions Board and Revenue to
provide a non standard, self directed portfolio based PRSA
•
Self Directed Pensions
•
Through our product alliance with Zurich we provide the full range of Self
Directed insured pension products for Self Employed, Directors, PRSA, Buy
Out Bonds, ARF and AMRF
•
own
Goodbody/ISEA
October 2014
OWEN REDMOND
Head of Financial Planning
Financial Planning
Goodbody Financial Planning
Current trends in financial planning:
 Safeguarding current & future income




Assets
Income protection
Life cover
Pension provisions
 Education Funding for 2nd & 3rd Level fees
 Managing “Tax Alpha” – this is the yield added to your
investment return by good tax management.




Deposit vs Gross roll up
Direct holdings (Capital Gains) vs Fund (Exit tax)
US ETF vs European ETF
Pension vs Personal
Goodbody Financial Planning
Current trends in financial planning:
 Asset migration
 Annual Gifts to beneficiaries – A couple can pass €6,000 per year
 Over 10 years the €60,000 could be worth c.€68,780*
 If passed outside a structured plan the Gift tax would reduce this
by c.€22,690
 Inheritance Tax management




Lifetime tax exempt limits have fallen
High (2009) - €542,544
Currently - €225,000
Tax rate has increased from 20% to 33%
*Growth rate of 3% net of costs rolled up to year 10
Goodbody/ISEA
October 2014
Questions ?
Thank you
REFRESHMENTS & TAPAS
Enjoy!!!