Blog – David McCarthy – Galway Talks, 27/03/2014

galway-bayfmQuestion:   I have had a Personal Pension for the last 20 years and never made any changes, is this something I should get reviewed?

Answer:  It is shocking the number of people that have Personal Pension Plans and have never reviewed it.  I am talking here about reviewing how your monies are invested as opposed to just looking at the level of premiums you pay.

The financial world is continuously changing and a lot of the funds that people have are completely ‘out of step’ with some of the more modern options available.  You should get this reviewed immediately.

Issue:  KBC Bank targets BOI current account customers.

Comment:  As part of the EU’s restructuring plan for Bank of Ireland, it appears that they included as a condition an item called ‘Customer Mobility’.  Apparently this means that Bank of Ireland have to give access twice a year to competitors, of a certain size, to market their customers.  At the moment KBC have been allowed access to 350,000 customers who have current accounts with Bank of Ireland, in order to market their own product.  Apparently the idea behind this was to increase competition in the Irish market.  It is believed that Bank of Ireland is the only bailed out bank across Europe, where this condition was applied due to their dominance in the Irish market.

The mailing is being handled by an independent company and KBC Bank do not get individual customers details.

Question:  I have €10,000 to invest over 5 years, what would you recommend?

Answer:  If you are risk adverse there are a number of guaranteed products and as I do not know your financial position I would suggest that you contact me.

Question:  I have a Variable rate mortgage and I’m paying an interest rate of 4.5%. 

Why is this so high when compared to interest rates people on Trackers are paying?

Answer:  It is shocking the level of interest rates customers are paying on variable mortgages, which can be changed at the behest of the bank at any time.  The rates currently applicable are substantially above the tracker rate. Banks keep talking about their cost of funds etc as an excuse for the hikes that they have made in the variable rate, which in my opinion is not sustainable.  The time is well overdue for the Central Bank to start talking to Irish banks about putting in place reductions in this rate.