Advisers who fail to consider a client’s aged care needs may risk falling foul of the FASEA standards, an industry consultant has said.
In a statement released on Monday, Aged Care Steps director Assyat David said with three of the 12 standards in the FASEA code of ethics dealing directly with consideration of a client’s long-term interests, advisers were now obligated to consider how all stages of a client’s retirement would be funded.
“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,” Ms David said.
“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.”
A white paper recently published by the group identified that as much as 25 per cent of a client’s retirement years could be spent in this ‘frailty’ phase, where the client was unable to care for themselves and needed to consider care options at home or in a facility.
Ms David said given the complexities of the aged care system, not all advisers would expect to become experts in the space, but they needed to have a business solution in place to address client needs and queries around aged care.
This was further called out in Standard 2 of the FASEA code around client best interests, which obligated advisers to consider “the client’s broader long-term interests and likely future circumstances”, according to a guidance paper produced by the authority.
“Standard 2 requires advisers build confidence to actively start conversations with clients about imminent or future care needs for themselves or family members,” Ms David said.
“This standard requires a proactive approach to identify needs both now and into the future.”
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