Two hundred and sixty thousand euro and a 60% barrier

Capacity for loss. Her stated position ('no risk') is inconsistent with the product. A 60% European barrier is not capital protection: if the worst-performing index is below 60% of its starting level at maturity, she loses 1% of capital for every 1% of the fall, measured from the start, so a 45% index fall means a 45% loss. At the worst point she could lose most of the €120,000.

Concentration. €120,000 is 46% of her savings and roughly 12 years of her income top-up. A single issuer's credit risk sits behind it as well as market risk.

Income mismatch. The coupon is conditional. In a flat or falling market it may never pay, so it does not fund the €9,000 she actually needs. Her income must come from the deposit interest and fund, whatever the note does.

Liquidity. Five-year term, limited secondary market; if she needs capital for care or a house repair she sells at a discount.

Process. As a retail client this is a MiFID II advised sale: an appropriateness and suitability assessment, a suitability report disclosing the PRIIPs KID performance scenarios (including the barrier-breach scenario), aggregated costs, and a documented explanation of why the product beats the alternatives. On her facts the honest answer is that it does not: she needs income and capital certainty, not geared equity exposure. Recommend a smaller allocation only if she can genuinely afford to lose it, and document the conflict if the broker is remunerated by the product provider.

Deposit. Gross 2.4%. Deposit interest bears DIRT at 33%, plus PRSI at 4% and USC (assume 3% for her), so the net rate is 2.4% × (1 − 0.40) = 1.44%. €100,000 × 1.0144^8 ≈ €112,100

Fund/life-wrapped policy. Assume 5% gross growth, taxed only on exit or at the eight-year deemed disposal at 41% of the gain; no USC or PRSI. €100,000 × 1.05^8 = €147,746 Gain = €47,746; tax at 41% = €19,576 Net = €128,170

The fund is ahead by roughly €16,000, despite the higher headline rate, because the tax is deferred and applied only to the gain, and no USC or PRSI applies. The broker's comparison is wrong on its face.

Two caveats that matter more than the arithmetic:

1. The 41% figure applies to a life-wrapped fund or an Irish/EEA-domiciled fund. The same payoff in a bank structured deposit is taxed as deposit interest (DIRT plus PRSI and USC); in a stand-alone note it may be income or CGT. Wrapper, not headline rate, drives the answer.
2. Deferral is worth nothing if she sells in year three at a loss, or if the fund is unsuitable. The comparison assumes a 5% return she has no right to expect.

Conclusion: correct the statement in writing; do not let it stand in the file as advice given.

Deposit Guarantee Scheme. Cover is €100,000 per depositor per institution, not per account. Bank A holds exactly €100,000, so the first cent of interest takes her over the limit. Bank B at €80,000 has €20,000 of headroom.

Investor Compensation Scheme. This is often confused with deposit protection. It pays 90% of losses up to a maximum of €20,000, and only for the failure of an investment firm to return assets - it never covers market falls. Joan's €60,000 fund has no capital protection of any kind.

Restructure:

• Move the excess above €100,000 at Bank A, and consider a third institution or a State-savings product if she wants certainty.
• Keep €20,000-€30,000 instantly accessible in the current account; the remainder on notice or fixed term at better rates.
• Treat €9,000 a year of income need as a liability to be matched with predictable income, not with a conditional coupon.
• Explain plainly that 'guaranteed' only ever refers to the €100,000 scheme limit, and that the scheme is a promise of the Irish State, reviewable in a systemic crisis.

Document all of this: at 71, with a fixed income need and a stated aversion to risk, a recommendation that puts €120,000 into a barrier product would not survive scrutiny, and the file needs to show the alternatives were considered and rejected on her facts.