Those of us involved in the LIA (Life Insurance Association) and those who regularly attended MDRT meetings lost a good friend when Michael Sheehan passed away recently after a great fight for life.  Michael was one of the founders of the LIA in Ireland. The LIA is an association that is all about good as it promotes education and high standards in the financial world of life insurance and retirement planning.  Recently the membership at LIA passed the 10,000 mark so it is a significant number of people.

In recent years one of the big concerns that Michael had was that he felt that as an industry we were very badly fragmented and we had no strong united voice when it came to tackling major issues, that he felt were wrong and unjust and that needed to be fought on behalf of our customers.

Over the years he had seen how things seemed to work much better in the USA.  One of the people that we asked for advice on this issue a few years ago was David Woods an insurance agent for more than 50 years in America.  David was also an MDRT member but more importantly David was at one time the CEO of NAIVA (The National Association of Insurance and Financial Advisors) an association with more than 40,000 life insurance agents spread across the USA.

David said that if they ever had an issue or concern with some aspect of proposed legislation that within days they would have a united industry voice.

They were able to galvanise quickly into one voice on behalf of NAIFA and MDRT and also were able to include the financial clout of all the Life Insurance companies and indeed all who worked in the life insurance industry in America. They understood that if there was a problem and they needed to voice their concerns at Capitol Hill, Washington DC they needed to act without delay. They also had the financial resources from the life insurance companies to help them to fight their cause.

In recent years Michael held a few meetings to see what could be done.  One was of the Irish attendees at an MDRT meeting in America and another in Ireland a few years ago, to try to move everyone in our industry towards having a united voice. Unfortunately nothing happened and I suppose that one of the reasons why is that we looked to the LIA for support and guidance but in reality the LIA whilst it has many brokers/agents/financial advisors as members it sees itself as an educational body rather than a  lobbying association and perhaps this is as it should be.

We have in Ireland two broker associations, which is perhaps a bit unnecessary, that cater for the traditional broker market. The IBA (The Irish Brokers Association) has as its members both life and general brokers and PIBA (The professional Insurance Brokers association) which is the newer of the two consists of life brokers only. That I suppose is the first stumbling block and we have to ask ourselves why does the IBA have life and general brokers who have really very little in common, and secondly why does a little country like Ireland have two life broker associations in the first place.

Then just to make things a little more complicated we have a new group in Ireland the CFP’s(certified financial planners) which is a growing number(300 plus) of financial advisors/planners qualified through a new university course which had its first students through UCD in 2011. The life insurance companies have their own association which was formerly the Irish Insurance Foundation and this includes life, general and health insurance companies.

I believe that anything is possible and indeed was on the board of the LIA when I could see from close up the brilliant work of its former chief executive Brendan Glennon. Brendan led a wonderful group that included Bill Hannon now chairman of the FPSB board and Dr Anthony Walsh of the Institute of bankers, to get an agreement with Con Horan and others at the Central Bank that the QFA exam qualification would be the basic benchmark for anybody in Ireland who wanted to give financial advice to the public.  This was the minimum benchmark qualification for tied agents, brokers, bankers and people working in credit unions.  This was a red lettered day for the way business was done in Ireland and many other countries were really impressed and indeed tried afterwards to replicate what had happened in Ireland.

What it really proved was that if you get the right person with integrity and enthusiasm and foresight that anything is possible and an industry can be united and made stronger and that the people who benefit from our advice and services can be better served as a result.

In recent years in Ireland we have seen some silly things happen that looking back really made little sense. We have as we all know many financial issues right now in Ireland. There are two in particular that I think our industry can help with;

The first is that people are not saving enough money for their retirement which is a serious issue because by the time they get to age 65  which used to be normal retirement age the old age pension date could well be 70 or later as the country doesn’t have the resources to fund the pension from age 65 anymore.

What does the Minister for Finance do? He imposes a levy on anyone who is prudent enough to be putting money into a retirement fund. I called it Daylight Robbery in one of my blogs. Yes I know it was crazy but he actually penalised the people who were doing something to help themselves. The people who didn’t have a retirement plan in place didn’t pay anything. You work out the logic of that!

If that wasn’t bad enough he really did something even sillier in the area of health insurance. We all know the problems within the Irish Health service and the real need for people to have private health insurance. What does he do he reduces the tax relief allowed on health insurance policies which surely is one of the reasons why thousands of people each year are not renewing their health insurance.

Looking back I know that all of us involved in the area of retirement planning should have taken issue with the Minister for Finance over the levy he imposed.  We have seen in Ireland the recent government back down on the water charging issues. We should have done something more positive to protect the retirement funds of our customers. Similarly we need a united voice to argue the cause for people to get more favourable tax treatment to help them fund their health insurance costs.

Looking forward we need a united voice within our industry to fight on behalf of our customers issues that occur in the future like the pension levy and indeed the current levy of 1% on premiums for life insurance and savings and savings policies which has been in place for many years. Another bizarre tax!

I discussed my concerns and hopes with LIA past president Liam Mc Grory at the recent Cork LIA annual dinner when we were discussing Michael Sheehan’s hopes and aspirations and I agreed with Liam when he said that what we probably needed was a 24 year old Brendan Glennon or someone just like him to motivate us and to unite us to go to into battle collectively from time to time when things are imposed on our very important industry that are not in the best interests of our customers.

Ted Dwyer Family Business

November 2014

Ted Dwyer is the Founding Director of City Life Wealth Advisors a family business in Cork