Regulation, Taxation and Client Suitability
Regulation
Firms and individuals must be authorised by the relevant regulator (in Ireland, the Central Bank of Ireland) and comply with fitness and probity standards. Conduct rules - MiFID II for investment firms, the Insurance Distribution Directive for insurance-based products, and the Consumer Protection Code - require know-your-client, suitability assessment, fair treatment, transparent cost disclosure, management of conflicts of interest, best execution and record-keeping. Anti-money-laundering and GDPR obligations apply to client data and identity checks, and clients have access to a statutory complaints and ombudsman process.
Suitability
Suitability requires knowing both the client and the product. The fact find captures objectives, time horizon, attitude to risk, capacity for loss, knowledge and experience, financial circumstances and any vulnerability. The recommendation must be documented, with reasons why the product suits that client, and reviewed periodically. Distinguish regulated advice from information-only or execution-only services, where no suitability assessment is made.
Taxation
Tax depends on the wrapper: DIRT on deposits, exit tax on life-wrapped funds, CGT and deemed disposal on direct holdings and non-life funds, stamp duty on share purchases. Pensions attract relief at the marginal rate subject to age-related earnings limits, and are taxed on drawdown. Charges and taxes should be modelled net, not gross.
Worked example
A 40% taxpayer pays EUR 1,000 gross into a pension; relief of EUR 400 means the net cost is EUR 600. At 5% for 20 years, EUR 600 grows to EUR 1,592 outside a pension, while the EUR 1,000 inside grows to EUR 2,653 before drawdown tax. Early relief and tax-free compounding dominate.