The answer to long-term care funding issues is ongoing with the Dilnot review central to industry debate. The FSA has published final guidance stating a qualification in long-term care will not be required of independent intermediaries post-RDR - what are the considerations of integrating long-term care advice into a firm's proposition?
Liz Faye, Palm Financial Care
If an intermediary is thinking of integrating long-term care advice into their firm’s proposition, the main considerations should be which adviser is best naturally suited to the role and do they want to do it?
This is a unique advice sector and not one that every intermediary wants to participate in. Maybe this is due to the fact that it constantly demands more of your natural strengths than any skills you have learned along the way.
In our experience of running LTC training courses for advisers, the barrier seems to be not every adviser wants to deal with clients at these emotionally traumatic times in their lives. Not every adviser will feel comfortable giving comfort to a client who has dementia and whose behaviour can be unpredictable.
Consideration should also be given to the diminishing products available and the uncertainty surrounding the government’s response to the Dilnot commission’s suggestions. The time and effort that many long-term care cases demand, make it clear why this role is not for every adviser and in my opinion neither should it be.
This area of the market relates to the most vulnerable age group in our society whose representatives feel highly stressed out by the situation they are in. They should be able to call on empathetic, experienced and most of all, personable advisers who love what they do and will go at the families pace to offer support and advice on all matters, not just the financial aspects.
David Penny, Invest Southwest
This is a common-sense approach to the challenges thrown up by the FSA’s RDR requirements of firms wishing to maintain independent status. Not requiring each firm to have a qualified specialist advising on long-term care issues will allow many more firms to remain independent.
All that a firm needs to do is to be able to recognise situations in which it would be appropriate to refer a client to a specialist long-term care adviser.
The challenge will be to implement standards of recognition of a client’s situation which should lead to a referral to a specialist.
We have a specialist adviser, but if we did not we would run a training session in the fourth quarter with regular reviews of adviser understanding. We would also run targeted file checks of clients.
One risk could be advisers recommending income-bearing products such as investment bonds or other where the client and immediate family may have selected an immediate care annuity given the option.
A specialist intermediary would engage with the local authority, the NHS and other care organisations to explore ways of reducing the cost. In some cases, all costs can be avoided by holding the correct agencies to account.
A fee-hungry adviser without specialist knowledge may miss this opportunity to help client by wanting to implement solutions themselves. This is a risk to the client and firm.
