Sooner or later most of us are going to have to deal with the issues that accompany our parents’ aging. If we’re lucky they’ll stay fit and healthy, and their later years will be relatively uncomplicated and straightforward to manage.
But these things can’t be guaranteed.
Recent personal experience has reinforced the true value of advice in dealing with complex and emotional issues. Navigating the aged care system is daunting, even for someone whose occupation involves dissecting regulatory issues and dealing with sometimes obtuse and unhelpful people.
Aged care issues will touch a growing number of advisers’ clients and their families. They will be looking for help to make the best decisions at the right time, and for a reliable guide through dealing with what arises.
Not all of the issues that come up are financial; and often the financial issues that do arise don’t relate directly to the adviser’s client, per se, but to the client’s parents. And this can present a challenge for some advisers, depending on how their services are structured and how they charge for them.
Aged care is an issue that as much as any, and more than some, requires strategic planning and structuring. Any adviser who, to earn a fee, relies on aggregating a client’s financial assets (or who uses aged care planning as a gateway to getting their hands on a client’s assets later) is likely to find themselves out of the game. Sometimes there just aren’t any assets to aggregate.
Advisers aren’t charitable organisations and, notwithstanding any pro bono work they may do, it’s unreasonable to expect them to work for nothing. For some advisers, offering a strategy-only aged-care service just won’t fly. But for those who can structure and offer a service on a genuine fee-for-service basis, the sky is the limit.
Standard 3 of the FASEA Code of Ethics states that an adviser must “not advise, refer or act in any other manner where you have a conflict of interest or duty”. If an adviser has such a conflict, they must disclose that conflict to the client, and they must not act.
A clear advantage of a true fee-for-service approach is that right off the bat it eliminates any potential conflicts. The client pays the adviser an agreed fee; a service is provided by the adviser without any expectation or possibility of other gain or reward; and the advice is in the client’s best interests. Seeing it work in practice is really something to behold.
The adviser in question presumably charged a fee that appropriately covered his costs and rewarded him for his professional expertise. That’s a matter for him. But there was clear value perceived value for the fee paid, and the advice was first-rate.
Nothing recommended or advised could have given rise to a reward or gain for the adviser that was contrary to his client’s interests. For all we know, this may be the only time we will work together. This was a piece of discrete advice, scoped, priced and delivered in a highly professional manner. It’s how all advice should work.
Great article, thanks, Simon. Unfortunately, most people don’t see the need for aged care advice or its relevance to clients until they have experienced it themselves.