By 2020 18% of aussies will be over 65, and many of those will be already in or heading for an aged-care facility. Clearly this is too big a client sector to ignore, but what about the way you provide them with advice? Most agree it requires a very different approach.
“More and more advisers are looking to the area to get involved in it, because of the changes coming in with FoFA, but you’ve got to be a fee-basis business,” says Lisa Duggan from Epona Financial Guidance, which specialises in aged care financial planning. There is often no on-going advice or reviewing of products required, she says, so if your model has been to charge asset-based fees, it’s not going to work.
More complicated issues such as different family dynamics that can’t always be planned for often need to be taken into account. Power of attorney will often rest with a client’s adult children, and Duggan, for example, has had cases where the power of attorney has had to be revoked because children were acting in their own best interests, rather than their parent’s.
Aged-care advice is very rewarding but also emotional, so Duggan suggests that if you’re not an empathetic person, you shouldn’t operate in this sector. “It’s a really emotional time for the person that’s perhaps moving into residential care anyway,” she says. “Even if I’m dealing with the power of attorney, if mum or dad come to the meeting I’ll make sure I’m addressing them, and getting their input, because so much control is taken away from them. It’s a very emotional time.”
Duggan thinks there needs to be more uniformity in the industry if planners intend to keep up with the ageing population and specialise in aged care. She says an industry-wide accreditation would reassure aged-care facilities that they could send their clients to planners with a tick next to their name, and the right outcome would be reached.