Advisers are in danger of losing clients and business referrals if they fail to proactively bring up aged care issues with their older clients, says Aged Care Steps director Louise Biti. Worse still, clients will end up without support when they need it most.

“You have to start to proactively raising the conversation about aged care awareness and planning for a good older life,” Biti tells Professional Planner. “People often don’t want to talk about it, but you have to find a way to do that or they end up on the hospital carpark.”

The aged care specialist believes advisers need to overcome what is often an uncomfortable conversation with clients, and press the aged care issue so that clients are on board with a whole-of-life financial plan. If advisers don’t, she says, someone else will.

“The other thing is that if they don’t start having these conversations with the client someone else will,” she warns. “We are seeing a lot of advisers that are losing clients because they don’t accommodate that.”

Biti acknowledges the problematic nature of aged care advice; on the bottom end of the wealth spectrum, navigating Centrelink is complex and relatively commercially unattractive, while at the upper end, advisers can often feel like they aren’t giving aged care clients enough value for money when they are in a steady decumulation phase with stable, conservative investments. But this shouldn’t negate the provision – or the value – of advice, she believes.

“If these clients are getting value from their advisers they’ll stick with them,” she says. “There is an idea that clients get things in place and are drawing down so they’re not getting value, but advisers just need to be much better at showing a broader understanding and planning for the things that might arise that might change the plan. Those advisers that can offer a more life strategic analysis and review are going to have a much better chance of maintaining an ongoing relationship with the client.”

SMSF advisers have an in-built advantage in retaining clients here, she notes, because of the help hey often require meeting their trustee and reporting obligations.

Biti will be speaking on the role of advisers in aged care and the specific transition points when advice comes into play at the 2021 SMSF Association National Conference, which will be held online from February 16 to 18.

Whole-of-life planning

There has been a marked improvement in advisers’ relationship with the aged care sector and their engagement on the issues in recent years, in line with the industry’s increased standards.

“With the push towards professionalism, including the FASEA requirements, the role of a financial planning is moving away from just selecting products where people can put their money and draw it down, to that life coaching guidance mentoring role. And that’s about anticipating what a whole life is like for a person,” Biti says.

The fate of older Australians, and the role of financial planning in facilitating a happy older life, is becoming more prominent, she says. Biti notes that FASEA’s guidance refers to advisers needing to anticipate issues for the “rest of the client’s life”, and the recent Retirement Income Review’s acknowledgment of whole-of-life planning.

“Advisers are getting much better at understanding the value of their expertise and their guidance in a strategic sense and starting to charge accordingly,” she says.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
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