Parliament has just had a second reading of the aged care reforms that should go through by the end of the financial year.
The proposed asset and income test to determine the cost of bond is going to involve about 12 steps, according to EQT Aged Care Services senior manager Anna Lawton. “No normal person is going to be able to navigate through this, let alone an adviser who doesn’t deal in aged care specifically,” she says.
Planners will need to make the decision whether to become a specialist, have a specialist in the practice or create a referral relationship with a specialist. Lawton says EQT already has a relationship with some planning groups and accountants. “We respect the relationship and the referral. We help them with the aged care side of things then hand them back to their trusted adviser.”
The area holds some great business opportunities for advisers, allowing them to tap into the next generation of client when dealing with the power of attorney, which is usually one of the children. Lawton says the new laws will also help advisers in their future planning for their clients, as the client will have an idea of the maximum bond that they might need to save for or keep liquid.
In the end, it comes down to making the right decision by the client, says Lawton. “With the Best Interest Duty you need to make sure the advice you’re providing is good advice – solid advice. Every aspect of providing advice is so specialised… aged care is no different. It’s specialised and if you get it wrong it can cost the client a lot.
“It’s knowing that you’re providing the client the best advice, and if that advice is to see a specialist planner within the practice or to outsource, it’s really going to be important [for planners] to do the right thing by their client.”
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