In a white paper, Aged Care Steps has called for a new approach to retirement planning that equips advisers to support their clients through key life transitions as they age.
“The changing regulatory environment has combined with increasing longevity and frailty issues to raise the very real threat of advisers being held accountable for clients having insufficient funds to support themselves as they age, including in aged care,” the advice support firm said.
Standard six of FASEA’s Code of Ethics states that advisers “must take into account the broad effects arising from the client acting on your advice and actively consider the client’s broader, long-term interests and likely circumstances”.
Compliance with the code is a requirement for all advisers from 1 January 2020.
Aged Care Steps director Assyat David said the real-life phases of retirement are not defined by age but by levels of frailty and dependence.
Further, he said the approach has implications for multiple aspects of an advice business – advice processes and ongoing service model, portfolio construction approach, revenue models and client value proposition.
“The three phases of retirement – the carefree years, the quiet years and the frailty years – need to be treated as distinct periods, with tailored planning considerations and outcomes,” Ms David said.
He added that it’s not about forcing every financial advice business to become an aged care expert.
“It’s about ensuring your advice business is aged care ready; which means you have a robust business model that caters to the planning needs of your clients entering the frailty years – so that you can demonstrate that you have considered their position and provided advice that is in their best interest and meets their broader, long-term needs, whether that advice has been provided directly by you or a referral partner,” Ms David said.
I am happy to refer, but note, when we refer it must be without gain.
Sorry Your Honour but how was I to know the local pub was going to turn my client into an alcoholic, or that the casino was going to lure my client into unresponsible gambling with the offer of free food and free nights – Xplan just didn’t cater for the scope of these costs. Here’s my blank signed cheque…
[quote=Tony ]All Financial Planners should complete Nursing Cert3 at the very least .(new FASEA standard )
Also all Planners should ensure they have provisions within the office to cater for nursing clients as they age
you might think this is a joke. but friends, this is not a joke. the mortgage brokers are already being asked to make an assessment that the client is not finally abused. see https://www.afr.com/business/banking-and-finance/bank-tells-brokers-to-spot-abusive-home-loan-applicants-20190618-p51yrb
how are they capable of assessing that ? what qualifications and training do they have to make such an assessment.
why wouldn’t they ask us to be a burial specialist or consider the type of afterlife a client may or may not have. where does this stop?
[quote=Anonymous]I hear FASEA will next be looking for us to provide advice that considers the financial needs of a client’s afterlife, depending on religious beliefs, including both present religious beliefs and beliefs a reasonable adviser would consider a client may take on board in the future (ie. conversion), any sins they may have committed in their lifetime that might result in them being sent to an alternate location in the afterlife, together with us being fully culpable by law if we can’t demonstrate the client is in fact enjoying the afterlife they sought when they get there![/quote]
[b]standard 6[/b][b][/b], what is broader objectives, marry that with reasonably foreseeable and a reasonable person test and you have a whole lot of trouble. that’s what.
[quote=Anonymous]I hear FASEA will next be looking for us to provide advice that considers the financial needs of a client’s afterlife, depending on religious beliefs, including both present religious beliefs and beliefs a reasonable adviser would consider a client may take on board in the future (ie. conversion), any sins they may have committed in their lifetime that might result in them being sent to an alternate location in the afterlife, together with us being fully culpable by law if we can’t demonstrate the client is in fact enjoying the afterlife they sought when they get there!
right on. this is a new specialist area, that i am going to specialize in. I am fasea approved m.fin plan (burial specialist)
for those of you who don’t know there are :
The Six Types of Burial Options
In-Ground Burial
Above Ground Burial in a Community Mausoleum
Above Ground Burial in a Lawn Crypt
Cremation
Above Ground Burial in a Private Mausoleum
Natural Burial
you have to ensure you meet fasea code of ethics standard 6, “You must take into account the broad effects arising from the client acting on your advice [b]and actively[/b][b][/b][u][/u][u][/u] consider the clients broader, long term interests and likely circumstances
better start doing this if you don’t want to get sued and be on martin place steps with the sign, “homeless, due to negligence as i did not adhere to FASEA standard 6, all types of coins accepted”
And here my friends is the real nub of where the advice profession is heading;
‘raise the very real threat of advisers being held accountable for clients having insufficient funds ”
So that every client who has ever seen an adviser will be finding a lawyer to line up and sue us all because they did not have enough funds in retirement.
Don’t worry about the fact most clients today fail to take any responsibility for their own welfare, always spending today what they haven’t yet earned – refer the increase in buy now pay later businesses – always expecting someone else to do it for them so they have no risk and can sue someone in due course.
I am seriously wondering if I want to persist down this line of work when you can see that this is where the world is heading too – have PI insurance and the lawyers will come.
Hey , I have a great idea . Lets have an extra compulsory SOA for $4000 to address Age care need and try and get FASEA to have yet another pillar of advice !!!! Stop pushing your own Agenda Assyat . If you didn’t know there are far too many Compliance requirements now that are putting advisers out of business and pushing clients to Industry funds as a result . Lets have a push to simplify the industry and make it cheaper and easier to work in without Self interest groups pushing their own barrow .
I hear FASEA will next be looking for us to provide advice that considers the financial needs of a client’s afterlife, depending on religious beliefs, including both present religious beliefs and beliefs a reasonable adviser would consider a client may take on board in the future (ie. conversion), any sins they may have committed in their lifetime that might result in them being sent to an alternate location in the afterlife, together with us being fully culpable by law if we can’t demonstrate the client is in fact enjoying the afterlife they sought when they get there!
This is total over reach and fails to understand that financial planning is personal and individual or it is nothing.
Aged care, frailty or whatever special need may exist are factors to be managed and/or insured against. Advocate for advisers to be knowledgeable but don’t mandate that such should be included in every SoA. It’s hard enough to get people to digest the information they are provided already that is relevant and current to their existing circumstances.
The nanny state wants to continue to checklist a process so that it does not require application of professional skill by people with sufficient investment in their clients to actually know their needs.
Advice in any context requires genuine professional expertise to recognise the potential issues and address them appropriately. Whatever the circumstances.
Of course mandating an aged care option does help all those instos who want to flog the woeful investment products that involve taking someone’s money and giving them back their own money with 1% p.a. return.
Sure address age care as required.
But bugger me next FARSEA will be getting us to take clients temperature, blood pressure and prostate examination to ensure our Advice meets the clients future medical needs.
FARSEA are proving too be beyond a joke with their massive BIG stick over the entire industry.
All Financial Planners should complete Nursing Cert3 at the very least .(new FASEA standard )
Also all Planners should ensure they have provisions within the office to cater for nursing clients as they age .
Considering many don’t want to pay for advice, because they have been conned by various parties into thinking it should be “free”, the only age care advice they will be getting is down in the queue at Centrelink.
Why don’t ASIC also make the adviser fully accountable for any losses that arise as a result of the aged care client becoming sick in 10 years time or running out of money of they choose to blow it all at the casino, then they can sue the adviser and have them permanently banned from the industry – but make sure that only applies to independant advisers and not ISN advisers yeh?
At some point we need to re-think where responsibility lies for future events. I understand the vested interest in the report, but are advisers to be held responsible for life choices made by clients who 20 or 30 years later may ‘run out of money’? The amount required to have a comfortable retirement, produced by organisations like ASFA and others, is based on clients dying at life expectancy with no funds left. Perhaps this is where the emphasis should be rather than adding another risk burden to advisers who are already too much under he pump. After all, and as it currently d=stands, Aged Care services are fully funded for those without means.
is this a plug for all to complete a new course??? how far out does the proposal like to see aged care included or do we look at the subject say in the 70s age. just a mention at retirement or a full blown budget to account for something that may be 20 to 30 years away.