Clients considering the use of the Pension Loans Scheme are required to source and consolidate information from three separate sources on their own, according to Aged Care Steps.
Responding to questions from ifa, Aged Care Steps director Louise Biti said current laws preventing advisers from providing advice on the Pension Loans Scheme (PLS) presents a challenge to clients.
“The problem with the current rules is that to gain comprehensive advice a client may need to seek advice from three sources,” Ms Biti said.
Those three sources, Ms Biti said, are:
“This leaves the client on their own to try and consolidate the information to determine which product (the commercial product or the PLS), not to mention the time involved in seeking advice from all three parties,” Ms Biti said.
Aged Care Steps said it would rather see the system changed to permit advisers operating under an AFSL to advise on the PLS, with government providing those advisers with access to a “checklist of issues and a PLS calculator” to enable this to happen.
“Currently, advisers operating under the AFSL regime can provide strategic advice on how equity release can be used to top-up income to help clients meet their lifestyle objectives or aged care needs,” Ms Biti said.
“This includes education to help clients understand and be comfortable with how to increase cash flow by using equity in the home. We believe that clients increasingly need to think of their home as a resource to provide them with a safe environment to live in. This includes a physical building as well as access to equity to pay for home care and support to maintain independence and live safely in the home.”
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