New systems needed to traverse aged care changes
Financial planners will need to spend a considerable amount of time building new models to help their clients navigate incoming aged care legislation, according to an insurer.
Despite striving for simplicity, aged care reforms — due to hit mid next year — raise a number of new questions for advisers, particularly around client best interest, Australian Unity's chief executive officer of personal financial services Steve Davis said.
The complexity of the reforms will make solid advice crucial and place under-prepared planners at a significant disadvantage, he added.
"In theory (the changes) were supposed to simplify some of the decision-making elderly people face when moving into the aged care and retirement space, but I think in reality it hasn't achieved any level of simplicity and it created yet another need for people to get good advice around their situation," Davis told a briefing.
He said Australian Unity has been building new advice models to meet the expected influx of demand.
Elderly Australians may be particularly confused by the changes and their family members may not operate in their best interests, putting the onus on advisers to look out for their client's needs.
"For an 80 year old who may not be terribly financially astute, it is absolutely completely beyond them and beyond a lot of their family who I would say are the key people in that decision in what to do," he said.
"And some of them may be a little conflicted in that they may be thinking about their inheritance and the impact of selling the home — and that's an unfortunate thing to have an impact on what's in the best interests of the person."
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