Survey reveals how aged care will be become an increasingly important topic of conversation

From

Assyat David

Aged care will shift the landscape for financial planning and will become an increasingly important topic of conversation for advice professionals and consumers as revealed by an industry survey conducted jointly by Aged Care Steps and Swiss Re.

Assyat David, Director at Aged Care Steps said “The survey results have wide reaching implications affecting consumers, professional advisers and dealer groups”.

Consumer implications

Ms David said “The survey reveals that Australians need to plan for aged care needs. This includes addressing affordability of future care needs as well as an understanding of options to make informed decisions with confidence”.

She added “the survey results showed that Australians tend to seek aged care advice after a medical event or crisis, but often this is too late, and their options are limited”.

Leigh Watson, Head of Life & Health Swiss Re Australia & New Zealand, supports this view. “Considering ones aged care needs at a time of crisis can often result in a poor outcome and a lack of certainty and control over the quality and cost of the care received.”

Australians would be better placed to deal with their aged care needs if they plan well in advance, such as when they are planning for retirement.  “Key issues to be explored include; how they expect to fund aged care costs given the shift towards a greater user-pays basis, willingness to access the equity in their home instead of a focus on inheritance and their ability to rely on family and friends to provide care and financial support” said David.

“The costs associated with aged care can derail retirement plans and impact family members who are often called on to provide informal care,” added Watson. “This is an important focus area for Swiss Re as the insurance industry has an opportunity to create more efficient ways to help fund the care costs and give people additional peace of mind.”

The survey explored the challenges and fears of people concerning care. The results showed that Australians are grappling with the affordability of care, navigating through the age care process, making informed decisions and ensuring they access the right care.

David concluded “Advice is important to these clients to reduce stress and deliver better family cohesion”.

Professional advice implications

The aged care survey revealed that professional advisers should be preparing for aged care to become a standard business focus in response to increasing client demands.

“The survey confirms that advisers can’t afford to ignore the growing demand for aged care advice or risk becoming uncompetitive and less relevant to their clients.” According to David.

Results from the survey include:

  • 90% of surveyed advisers expect an increase in client demand for aged care over the next three years and consequently 80% of surveyed advisers will increase their business focus on aged care advice.  Client demand for aged care advice is driving this trend with 85% of advisers reporting that clients are proactively seeking aged care advice with 29% suggesting this is happening a lot.
  • 30% of advisers provide aged care to service existing clients. Interestingly, the remaining surveyed advisers provide aged care services to attract family/friends of care recipients (25% of respondents), build their client base and attract new clients (22% of respondents) and to provide intergenerational wealth transfer advice (20.8% of respondents).
  • These results align with the trend of advisers exploring new revenue sources and opportunities to better align and become more relevant to their clients to protect and grow their client base.
  • When providing aged care advice, over 34% of respondents rely on the Aged Care Steps Advice Generator software to model and produce the aged care advice document. A further 30% of surveyed advisers rely on other sources or a DIY solution.

“These survey results reinforce the risk that advisers who do not include aged care solutions to address broader needs, risk losing clients and forgo the opportunity to capture new revenue sources” commented Ms David.

Dealer group/AFSL implications

AFSL’s will need to support their authorised representatives to meet client demands and access the growth prospects from aged care.

Ms David advised “The challenges of running a competitive dealer group are great. Successful dealer groups respond to the changing financial planning environment by delivering tailored support and services to meet the shifting needs of authorised representatives. Otherwise dealer groups risk losing quality advisers and failing to attract quality strategic advisers.”

She continued “AFSL’s need an aged care solution for their authorised representatives including a compliance framework for the delivery of aged care advice, accreditation training, access to practical tools and efficient planning software”.

Additionally, AFSLs may need to review their portfolio construction guidelines for retirement planning to adequately address clients’ aged care needs throughout the retirement phase.

You must be logged in to post or view comments.