Jennifer Graham is the resident Goodbody x The Gloss Investment Club financial advisor, here to answer all member queries …
Jennifer Graham is the resident Goodbody x The Gloss Investment Club financial advisor. She’s been very busy taking care of queries from our members all year. Just before Jennifer goes on maternity leave, we sat down with her for a quick chat. We wanted to find out what she has noticed about our Goodbody x The Gloss Investment Club members, their financial queries and whether they differ from her usual clients.
How do The Gloss x Goodbody Investment Club members differ from your regular clients?
The one thing I’ve noticed is that they all apologise for getting in touch! Most say “oh sorry to be bothering you!”, which is funny because I’m delighted to hear from them, and I look forward to answering their questions.
Investment Club members tend to be women who for whatever reason, just haven’t been exposed to much financial education. This seems to be a societal trend and not the fault of members themselves. Investment Club members are open and honest about what they don’t know, which is refreshing. It’s also extremely rewarding when a member starts to invest and learn more about how they can make their money work harder for them.
What are the most common things members get in touch with you about?
Most people have some excess money that they are not putting to use, and they are wondering if they should start investing or what the next steps might be. They have cash sitting there and they don’t know what to do with it. One thing I always emphasise is that when it comes to investing, there are many different levels of risk and it’s better to have your money invested, even in low risk, low returns alternatives, rather than losing your purchasing power with rising inflation.
What are the steps you take them through?
A member usually emails me first and I email them back to arrange a suitable time for a call. I don’t like to cold call people out of the blue, as I find you must be in the right frame of mind to talk about money. On the arranged call, which is always confidential, I get an overall picture of the member’s finances and what their long-term goals are. After the call, I send them a discovery document which they fill out and send back to me. Then I assess what would be best for the client and how we can best achieve their financial goals.
What is the first thing you recommend?
Given the current environment, one of the things I insist on is a large emergency pot of cash. Current guidelines recommend having six months’ worth of expenses put aside, but since energy bills are so large now, I like clients to have seven month’s cash at their disposal, just to err on the side of caution and have all the bases covered. Then we can look at their excess cash and talk about what financial instruments will suit them best.
What is a mistake you see clients sometimes make with their wealth?
A lot of executives have risen to high heights in their careers and have been rewarded with stock options from their employers. Most people are not aware that it is a very high-risk strategy to only hold on to one stock. Stocks are variable by nature, and company value is dependent on many different factors. I always urge people to diversify their stocks, and it’s surprising how reluctant some members are to let go! A portfolio comprising of many different sectors and stocks is more likely to retain value and it mitigates a lot of risk.
What is a practical thing that all members can do, even if they don’t have a lot of money to invest?
For anyone looking to create long term prosperity for their children, one of the best things you can do is set up a bare trust. You can put €250 a month into the trust, €3000 per year and under the Small Gift Exemption, no tax will be applied to the fund. Other relatives or generous friends can also contribute to the fund and the child can avail of it when they turn 18. Building up a trust can go a long way towards paying for college fees, a car or even a downpayment on a house. It’s a great way to get the most out of your excess cash without incurring tax, and you don’t need a lot to get started.