I heard an advert recently which promoted the Financial Broker. And the thought occurred to me that many would assume that a financial broker can really only be beneficial to them if they are financially wealthy or at the very least financially comfortable.
But there are many reasons why a financial broker can make a big difference to your financial well being and peace of mind and it has nothing to do with vast amounts of money!
Here are 5 examples
Do you have life cover in place for your mortgage and personal life cover for your dependants? It is surprisingly affordable and thanks to increased competition in the protection market from the life assurance providers, increasingly affordable to everyone.
For example a life cover policy for a couple, both 30 years old and non smokers, for the sum of €200,000 will cost just €17.40 for a Dual Life, Term Assurance Plan with Conversion Option over a term of 20 years. That means the sum assured of €200,000 will be paid out to both lives if they die within the 20 year term (total sum assurance €400,000). You can also chose to convert the plan during the term to another plan.
We know from experience that there are a lot of people with very expensive life cover policies which were incepted some time ago, and despite the fact that you might now be older, there are definite savings to be made.
How can you not afford to take a look at that option?
You may recall the success story the SSIA’s were; Introduced in the Finance Act 2001, the SSIA Scheme was structured so that the Government contributed one euro for every four invested by the account holder. It was simple, effective message which led to thousands of people in Ireland take up SSIA plans between 1 May 2001 and 30 April 2002.
And while Pensions can no doubt, be technical, the core message is essentially the same; if you contribute €100 to your pension, as a high rate tax payer, you will get 41% tax relief and thus the contribution will only cost you €59! As a lower rate tax payer at 20% tax relief, the contribution will only be €80.
That pension contribution will likely cost you a lot less than you think so it might be worth looking at!
Pension from Previous Employment
Did you know that if you were a member of an occupational pension scheme from previous employment, that you can transfer this to a Personal Retirement Bond where you can invest the plan in your own name, and as is suited to your particular risk profile?
This is particularly important as you near retirement but should be regularly reviewed at all ages in any case.
Like most of us, if you are not financially wealthy, then our income is critical to us.
Did you know there is a plan which you can take out to protect your income? And if an Income Protection Plan to protect your income (limited to 75% of your income less social welfare) is too expensive, there are options to protect some of your income or your mortgage.
That at least would give you peace of mind; that in the event of accident or illness that your mortgage/most part of your salary would be paid (after a deferred period, typically of 13 weeks).
Where is your money invested?
You might not be able to afford to continue to contribute to that pension/saver at the moment but you should always review where your funds are invested.
After all they are your hard earned funds, and they should be invested where you feel comfortable investing them. If you cannot afford to take any risk with your money, there are many capital protected or low risk options available.
If you feel your funds are going to be invested until pension age, for example, and are willing to invest same, knowing that you can accept the potential volatility that comes with long term investment, but which over the long time is likely to earn positive returns, then you should invest your funds in higher risk funds.
In any case though whatever your risk profile, we recommend a diversified fund portfolio across all sectors & asset classes with a good geographical spread.
If you honestly have no idea, how you are invested, then don’t worry, this is extremely common and it is our job to guide you in this regard.
In conclusion, there are many ways in which a Financial Broker can assist by bringing their expertise to you, be it to save you money or to advise on existing pensions and investments to name but a few.