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Saturday, 20th April 2024 |
| Investors benefit from wide range of wealth management services now offered by stockbrokers |
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| As the number of HNWIs (high net worth individuals) continues to grow in Ireland, stockbrokers are increasingly offering services beyond those that would be traditionally offered by a stockbroking firm, and expertise that traditionally was available to only institutional investors, is now being made available to a wider market. Here, Eamonn Glancy profiles the changing face of Goodbody Stockbrokers, which continues to evolve from traditional stockbroking, to providing a wide range of wealth management services to match the diverse needs of today’s investor. Some of the services offered by the broker, and assessed by Glancy in this article, include range trading, retirement planning, alternative investments, and pooled investment vehicles. |
The private clients’ department of Goodbody Stockbrokers continues to evolve from traditional stockbroking to providing a wide range of wealth management services to match the diverse needs of today’s investor.  | | Eamonn Glancy |
As one of the country’s most experienced stockbrokerages, Goodbody Stockbrokers of course still offers its traditional equity-based portfolio products. However they have also steadily developed a variety of bespoke offerings in response to the changing requirements of their clients. It was recognised that there are many investment solutions that are not met by investing exclusively in equities and so, over the years, Goodbody Stockbrokers developed strong capabilities in other asset classes.
Eamonn Glancy, head of private clients at Goodbody Stockbrokers, explains that the drive for its new focus came from changes that the firm recognised were occurring in the market-place. ‘We did a review of the business in terms of what the clients were looking for, where the market was going and defined future direction. It was evident that there was increased wealth generated in the country over the previous decade but also that customers were conscious of their exposure to the risk of an over-dependency on a single asset class.’
Today the private clients service has branched into a number of different areas, including property investments, alternative investments, retirement asset services and the tailored markets desk service.
Property
The popularity of property with the Irish investor is renowned and it offers diversification of risk and attractive long-term performance. Goodbody offers clients the opportunity to invest directly in property deals and there has been increasing availability of pooled investment vehicles, property companies and property units. Where appropriate, Goodbody Stockbrokers’ property opportunities are structured to facilitate either personal, capital allowance tax based equity or pension fund investment.
Our most recent investment opportunity is a new sports injuries clinic located in Santry, a state of the art medical facility and the first independent dedicated orthopaedic hospital in Ireland. It is an attractive tax-efficient investment opportunity for individuals who wish to utilise capital allowances against rental income. Previous successful property deals have been through joint ventures with property developers.
Last year, Goodbody linked up with JJ Rhatigan to present the Westgate proposal, involving the development of apartments, offices, a hotel and ancillary services in Dublin 8 opposite Heuston Station. A total of €20 million was raised and the targeted returns estimated at IRR 19.5 per cent are already looking like they may be exceeded. Other examples include Goodbody linking up with Chieftain property developers for a residential development in Wicklow town (€15 million was raised with targeted returns of IRR17 per cent) and the Goodbody Northern Ireland Property Fund raising in excess of €30 million with a target IRR in excess of 15 per cent. Goodbody was also involved in the Beacon Hospital development, which was the largest tax based fundraising proposal in Ireland, with €43 million raised and target returns at IRR 28 per cent. Another significant property investment has been a joint venture with O’Flynn Construction in Tiger Developments, which has just successfully concluded an exit opportunity for investors with an offer to shareholders at 20 per cent premium over NAV.
Alternative investments
Goodbody Stockbrokers also introduced alternative investment assets or absolute return investments, a fast growing investment asset class offering an attractive alternative to traditional asset classes. Some examples of alternative funds have been the Goodbody Alternative Long Short Equity Fund or the Dexion Absolute Fund. These hedge funds seek to expose investment capital to specifically targeted levels of risk and produce a positive return on a consistent basis in all market environments. The funds are independent of the direction of stockmarkets or of the timing of the initial investment. Our alternative investments team has also produced a series of capital protected products, which utilise in-house stock picking expertise and have produced strong performance. Further specialities include Qualified Investor Funds and specialist bond products.
Retirement planning
The changing pensions landscape is also relevant in that due to legislative changes, there have been significant opportunities for tax efficient investment management and retirement planning. The Goodbody Stockbrokers’ Retirement Asset Services is unlike traditional pension plans and instead allows clients to have a pivotal role in designing a plan tailored to individual needs. Goodbody is keen to give their private clients control over how their assets are managed. For example, each case in our Retirement Asset Service is different. Each individual has their own personal agenda, it could be tax planning, it could be estate planning, it could be taking money out of a company or it could be investing in property.
One of the retirement products, the Approved Retirement Fund, was first introduced in 1999 as an alternative to buying an annuity for the self employed and controlling directors. The ARF option has been extended so there is now a large constituency of people who are entitled to this fund at retirement: proprietary directors under occupational pension schemes, PRSA and retirement annuity holders and individuals with AVC benefits. The ARF decision is typically made on emotional capital preservation grounds and on the perception that annuities are poor value for money. Figures released by the Department of Finance in February of this year have quantified the total funds invested in ARFs currently at over €1.1 billion.
Range trading
Another growing area is the markets desk offering. This allows investors to buy and sell shares on an advisory basis offering range trading, which is designed to derive benefit from volatility in the markets. The markets fesk selects a number of stocks and applying strict criteria based on the performance of each one, advises clients at what point to buy, and subsequently at what point to sell. It offers significant opportunities to make a return in the short-term, which could be anything from a day to a year.’ Contracts for Difference (CFD) are also available through the markets desk. This allows investors to trade the market using leverage or
borrowing to increase exposure to the market.
What it’s really about is giving the clients the control over their investments and how they are handled, says Glancy. The company philosophy is to put the client first. The service is relationship-based and the firm’s representatives will seek to develop long-term relationships that evolve over the years.
The Goodbody solution will match the clients’ investment needs with their profiles and objectives. Time is taken to understand clients’ personal circumstances so that client portfolios are built to match client risk and return expectations. In addition, products from a range of third party providers are identified and innovative new products are developed in-house to achieve a best of breed in all categories.
Goodbody has brokers across the country, providing a face-to-face service with offices in Dublin, Cork, Galway, Limerick and Waterford - it’s about getting close to the client’.
The evolving nature of Goodbody Stockbrokers means they will constantly monitor clients’ requirements in the marketplace. In many ways, the future of the industry will depend on the needs of the clients and responding to those needs appropriately. It’s about looking at what each individual’s agenda is, and responding to that. |
Eamonn Glancy is a chartered accountant and has worked with Goodbody Stockbrokers since 1996. Having worked in AIB, he joined Goodbody Stockbrokers as chief operating officer before assuming his current responsibilities as head of private clients in 2002. Eamonn is a member of the Goodbody Stockbrokers’ Board.
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| Article appeared in the August 2006 issue.
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