As more clients experience frailty in retirement, advisers need to be having difficult conversations about planning for aged care.
FASEA’s new code of ethics – primarily standard two and six – now requires advisers to provide advice that considers the whole of life and future client circumstances. But Louise Biti, director and co-founder of Aged Care Steps, says that advisers have a blind spot when it comes to aged care.
“No matter who your client is, or what age they are, your advice really needs to consider the implications for their whole of life,” Ms Biti said.
“And evidence is showing us that whole of life is very likely to include a period of frailty before they pass away.”
And according to the Australian Institute of Health and Wellbeing, that period of frailty is likely to be 15 to 20 per cent of a person’s retirement. Ms Biti says that advisers shouldn’t “park” the issue.
“For many of, you’re busy with retirement moves and explaining share market implications to clients as well as adjusting to a new work environment…when it’s busy, it’s tempting to put aged care planning aside,” Ms Biti said.
“But if the time’s not now, when is it really going to be? We’re always busy with something. I think it’s important to mot just ignore the issue of age care at the moment. Your clients need help now. They may not know to ask you. So if you’re not raising it proactively with them, they may not know they can ask you for help.”
Also key is knowing how to broach the conversation. Ms Biti suggests discussing the “three phases of retirement” – the “carefree years”, where most fund planning and objectives are focused; the “quiet years”, where expenses and travel tend to drop off; and finally, frailty.
“When you’re doing the reviews, don’t just talk about retirement planning and straight line income needs,” Ms Biti said.
“Start to bring into the conversation that change that it made for a client, that we need to start to provision for that later period…What we really want to avoid is a conversation where a client comes in and you look and go ‘Oh, Beryl, you’re not looking so good today, let’s talk aged care’.
“Think about how to introduce it in a very subtle way.”
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