23 April 2015

The Aged Care boom – Is your business ready?

The Federal Government handed down its Intergenerational Report (IGR) in March this year, providing a glimpse into what the future for Australians will look like in 2055.

What it showed was an ageing population growing to over 40 million, with only 2.7 working-age Australians for every one aged over 65, and life expectancy nudging close to the 100-year mark. And while the report may have a political agenda behind it, it’s still a startling reminder of the increasingly important role aged care – and aged care advice – will play in our society over the coming decades.

It’s no exaggeration to say that this is likely to become one of the fastest growing and lucrative of all advice sectors.

The reality is aged care isn’t getting any simpler – or cheaper. So while the tsunami of ageing Australians will continue to pose certain economic difficulties (with estimated slowing of economic growth and labour force participation by 2050), the opportunity for advisers to diversify into the profitable aged care advice sector has never been greater.

Experts predict there will be a lack of advisers who specialise in aged care to cater to a burgeoning ageing population and increased demand for advice in this area. And it’s not just older Australians who will be seeking advice. Anyone with ageing parents will soon find themselves having to understand and work their way through a complex system, sometimes at very short notice.

If you’re a financial adviser, now is the time to start looking objectively at your professional knowledge, your skills and your business as a whole and ask yourself – “are you aged-care ready?”

Understanding aged care advice

Working with clients who are in the latter stages of life requires a very different mindset. As a group, older Australians don’t need more products, they need more advice. The challenge is no longer the accumulation of financial assets, but rather helping clients hang on to what they’ve already got and managing it to meet their significant and ongoing aged care costs.

It’s important to understand that this unique branch of advice extends far beyond just calculating the fees and strategies to reduce costs and increase the age pension. Advice on aged care is a complex area but with proper study and preparation, it has the potential to deepen your existing relationships with customers, protect your client base as it grows older and even attract new business.

Set up your business model

Above everything else, it’s important you know explicitly what you are going to do, what you need to charge, and how it will add value to your clients.

Aged care advisers warn that the business can be a loss leader if not carefully managed. The time and charge aspect needs to be carefully thought through, especially if you are planning to offer the service to long term existing clients.

Ultimately, how you choose to charge needs to fit into your own business model, as well as that of your potential clients, but should include consideration for time spent, skills and expertise involved and value added to the client.

Familiarise yourself with the aged care rules

All aged care advisers need to be familiar with the Government’s aged care rules and how they will impact their clients.

On 1 July last year, the Federal Government’s ‘Living Longer, Living Better’ aged care reforms came into effect. The 10 year program has a strong emphasis on making it easier for older Australians to stay in their homes while they receive care and removes the distinction between low and high aged care services, along with a tighter means test to assess home care and residential care fees.

All these changes to the system makes one thing quite clear to Australians – the importance of seeking financial advice.

Boost your skills

The aged care advice business is complex. The principals of financial planning still apply, but the specifics of aged care demand a different skillset and approach.

On a daily basis, advisers can be dealing with a variety of things – Centrelink and the Department of Veterans’ Affairs (DVA), structuring clients’ affairs to get them into the right aged care facility, finding out how much bond they will have to pay (possibly the most angst for clients), estate planning, and the emotional end of life planning.

“Providing aged care can be emotional and time consuming”, says Eleanor Dartnall, financial adviser at Dartnall Advisers. “It takes patience and understanding.”

Improving your client engagement skills to help you understand the psychology of grief and stress experienced by clients and their families is a crucial step in positioning conversations effectively.

Ms Dartnall says “businesses also need to make sure that if they want to provide this service, that they have the appropriately trained staff and that there are processes in place to ensure the tasks do not erode other work demands in the office.”

Coming into the advice business with a working knowledge of the technical issues put Ms Dartnall at an advantage, however she suggests advisers looking to offer aged care advice as part of their own business undertake specific professional training, such as Strategy Steps.

Know your client

It’s important to understand that aged care advisers are not only dealing with their client, but with the client’s family as well. For all parties involved, the move into aged care is often overwhelming and can evoke feelings of panic and confusion. Your single most valuable asset as an adviser is to offer peace of mind – be their advocate during this significant life change, and provide them with a roadmap for their last stages of life.

The overwhelming response from aged care clients on what they value most from their adviser is an understanding of their choices, and control of their care.

The specifics of government legislation, pension benefits and cost-reduction strategies are often only a very small part of the client engagement experience. And while it is essential knowledge to have as an aged care adviser, it should not be the primary focus of your client value proposition – it’s just icing on the cake.


Aged Care Steps. 2015. Aged care advice – what clients want. Available at: http://www.agedcaresteps.com.au.

Biti, L, 2015. Is your business “aged-care ready”. Professional Planner, Issue 72, February. 38-39.

Important information: The content of this publication are the opinions of the writer and is intended as general information only which does not take into account the personal investment objectives, financial situation or needs of any person. It is dated April 2015, is given in good faith and is derived from sources believed to be accurate as at this date, which may be subject to change. It should not be considered to be a comprehensive statement on any matter and should not be relied on as such. Neither Zurich Australia Limited ABN 92 000 010 195 AFSL 232510, nor Zurich Investment Management Limited ABN 56 063 278 400 AFSL 232511 of 5 Blue Street North Sydney NSW 2060, nor any of its related entities, employees or directors (Zurich) give any warranty of reliability or accuracy nor accept any responsibility arising in any way including by reason of negligence for errors and omissions. Zurich recommends investors seek advice from appropriately qualified financial advisers. Zurich and its related entities receive remuneration such as fees, charges and premiums for the financial products which they issue. Details of these payments can be found in the relevant fund Product Disclosure Statement. No part of this document may be reproduced without prior written permission from Zurich. CLYH-010009-2015.
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