The Financial Advice Association has called for stronger regulations to ensure only licensed professionals can provide aged care advice.
In a submission on the Aged Care Bill, the association wrote to express its support for a consultation paper from Aged Care Steps which noted the “worrying trend” of unlicensed and unregulated businesses being able to deliver aged care advice.
“Aged care advice is complex, and when it is provided by someone who is unqualified and unlicensed can lead to significant financial harm for older Australians,” the FAAA submission said.
The association argued there is a “pressing need” for older Australians to receive high-quality, aged care advice from a fully licensed financial adviser.
“Aged care advice is complex, involving the need for a detailed understanding of the aged care regime, taxation, social security and estate planning,” the submission said.
“Financial advisers consider the funding of aged care services in helping clients plan for their future and address a broad range of inter-related implications.”
The association also suggested more can be done to encourage those who are entering this specialisation.
“Enhancing public awareness and education about the importance of seeking financial advice on aged care will benefit those who are forced to access aged care.”
The FAAA had additional concerns about how the bill might implicate adviser obligations for financial advisers under the Corporations Act and financial adviser Code of Ethics.
“Financial advisers assist clients with their aged care needs, including advising on the cost implications, the broader consequences for their financial situation and in the decision to select a particular facility,” the submission wrote.
“It is a requirement in the legislated Financial Adviser Code of Ethics for financial advisers to consider the potential longer term implications of their advice on clients.”
The association argued that advisers shouldn’t be caught up with further regulations under the new bill given the existing obligations to take care of client best interests from already existing laws.
“Given the provision of financial advice is heavily regulated under the Corporations Act and the Code, with oversight by ASIC, we recommend it be made clear that ‘relevant providers’ operating under the Corporations Act are not intended to be captured under the definitions or provisions in the New Aged Care Act,” the submission said.
The FAAA said it “broadly supports” a move towards a system more reliant on user pays, but that existing arrangements should be grandfathered.
