FASEA requirements for aged care advice

From

Assyat David

The FASEA regulations have had an unsettling effect on the industry and much of the discussion to date has centred around disruption and educational and exam requirements.

But now is the time to shift the focus to a more productive examination of implementation and what the standards mean for advice behaviour, delivery of client services and operational processes according to a white paper released by Aged Care Steps.

“Aged care advice has been moving to a core component of financial advice with an ageing population. The FASEA standards reinforce the need for advisers to consider the aged care implications for clients and implement an aged care advice solution to comply with the Code” according to Assyat David, Director at Aged Care Steps.

Three out of the twelve FASEA standards specifically require consideration of the client’s broader long-term interests. The Best Interest Duty (BID) fails without this aspect covered.

“Advisers must consider the entirety of a client’s retirement which implicitly needs to take into account not only the early “active” years but also the potential changes to the client’s health and ability over time and the third phase of retirement – the frailty years” said Ms. David.

Not all advisers need to become aged care experts, but they all need to have a business solution that matches their business objectives as well as personal skills and expertise. According to Ms. David, “advisers need to build capabilities, confidence and efficiencies to ensure they are able to support clients throughout their frailty years”.

Furthermore, “Standard 2 requires advisers build confidence to actively start conversations with clients about imminent or future care needs for themselves or family members,” she added. “This Standard requires a proactive approach to identify needs both now and into the future.”

Advisers who avoid aged care advice, risk failing to comply with the FASEA code of ethics as well as failing to satisfy the needs of the client.

The Aged Care Steps white paper provides insights to guide advisers and licensees on the steps to take to be well positioned to meet the FASEA obligations, to protect their business from disruptions and enable advisers to be positioned for growth. It explores issues including who is the ‘duty of care’ owed to when dealing with families and how advisers can meet the competence and efficiency value pillars which are core to the FASEA regulations.

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