HONAN Financial Services is continuing to expand less than six months after opening an office in Ennis.
Established in Limerick in 2021, All-Ireland winner Darach Honan opened his Ennis office this year at Bindon Street and is currently looking to hire a paraplanner to support Honan Financial Services as it grows its client base in Clare and beyond.
Darach tells The Clare Echo that the move to Ennis has been a success, giving him a local base to assist people with their financial needs. “I opened in Ennis in the beginning of this year on Bindon Street. I’ve had a huge response from people in the area and I love coming up to Ennis to work and meeting people. Thankfully, businesses in Ennis are thriving and I have been able to add value to business owners and private individuals who are looking to review or set-up pensions, investments, income protection and life cover”
Prior to establishing his own business, Darach had 10 years of experience working in the industry with particular emphasis assisting people working in the public sector. The Clonlara native explains, “Since starting my own business there’s been an even split between business owners, private individuals and public sector. The fact I have a knowledge of both is very useful when sitting down with a married couple who may be working across both sectors.”
RETIREMENT PLANNING
Employment trends have undergone a shake-up in recent times with employees more likely to spend less time with one employer. This has had a knock-on affect on people’s retirement plans, he explains. “It used to be the case whereby you’d go in at 20 and work for 40 years with one company and that employer would give you a pension at retirement but that’s no longer the case and people need to be far more aware now of their retirement planning than 30-40 years ago.
“Nowadays, people are working five to six years in one place and moving onto another job and they oftentimes don’t know what to do with their pensions that they’ve left behind. People need advice on that. There are many options available to people who have left pensions behind them and it is important to act in conjunction with a financial planner to address this rather than leave it in the wrong pension for the long-term”
“Employers need to be creative in ensuring that employees are retained and that they hold onto staff they have invested time and resources into. Providing pension benefits to employees is a cost-effective way to do this. Paying into a pension for employees reduces the tax and PRSI which a company pays and also gives the employee peace of mind that they are being looked after in the long-term. I have helped many businesses review and implement their pension schemes. It is an area is sometimes overlooked by businesses but it should be regularly reviewed to ensure that members are getting good advice and the best scheme is in place for them.”
Recent changes to pension legislation has relaxed restrictions in terms of pension contributions, an area where Darach believes more business owners should be taking advantage of to ensure a healthy retirement plan.
“Previously, companies were restricted in how much they could contribute to directors pensions. Recent changes to pension legislation for PRSAs has allowed for more generous pension funding which many company directors are taking advantage of. Companies can now fund without limits to a director’s PRSA and the company can claim all the tax relief for the contribution in year 1. This is an extremely tax efficient way of extracting cash from a business, one which our clients are taking advantage of.
SECOND OPINION
Darach stresses that it is always a good idea to have a review of your pension. if you’re not in regular contact with your financial adviser and hearing from them once a year, or even if you are, it’s no harm to get a second opinion and have a review. “In most cases, people who engage with a financial advisor will be getting good advice and good service. However, sometimes people do not hear from their financial advisor as much as they would like and find them unresponsive when they do contact them. Regular contact and collaboration on investment choices is key to a fruitful relationship between client and advisor. If people are not getting this, they should look for a second opinion on their pensions, investments, savings and protection policies.”
INCOME PROTECTION
Another important area of people’s financial planning where Darach believes is sometimes overlooked is income protection and life cover, both tax-effective propositions which offer people good value peace of mind. “Some people working for big multinationals in Clare, Galway or Limerick have a lot of benefits in their contracts like income protection. Having an income protection policy ensures that you will continue to be paid if you can no longer work due to illness or injury. However, if you do not have income protection policy through your employer, it is important to put your own policy in place. Income protection is cost-effective as you receive tax-relief on the premiums.
“If you think about it, if someone is 30 years old and they’re earning €50,000 for the next 30 years, that’s an asset worth €1,500,000. It’s likely their most valuable asset, it’s more valuable than their house and their car. Naturally people insure their houses and cars but income protection is not as commonly held a policy. If you had a pen in your house worth €1,500,000 you would insure it and your income should be no different. Income protection allows people to maintain a decent standard of living in the event that they become ill or injured and unable to work.
“Life cover is massively important for anyone who has financial dependents in their lives. If something was to happen you, how would your family cope financially in your absence. If they would struggle, then you need to have a life cover policy in place. You can ensure that your kids can afford their education and that your spouse can be there for them emotionally and not be under pressure financially to survive. Business owners have the advantage of being able to pay for income protection and life cover through their businesses, making it extremely cost effective.
SAVINGS
While there has been plenty of talk of interest rate hikes in the media, we wondered why deposit holders in Ireland were not seeing an increase in the interest their savings with the bank was generating.
“While the banks have increased their lending rates, they have decided not to pass on the interest rate hikes to their customers. People need to look elsewhere to grow their funds. There are many investment options which are better than leaving your savings on deposit with the banks long-term. Everyone would agree that the past five years have been extraordinary with the pandemic and war in Europe. However, we have seen huge growth in the stock market over the same period of time. Investing in global stocks over the long term gives people a great opportunity to grow their wealth and benefit from the wonders of compound interest.”
To speak to Darach, call 087-1277155 or email info@honanfs.com.
