In the world of financial advice, Australia’s aging population has heightened the demand for specialised guidance tailored to aged care.
A good adviser understands the emotional and psychological challenges associated with aging and the transition into aged care. As a result, they provide more than just financial expertise – they offer support and reassurance during these times.
Digital tools are aiding in the assessment and modelling of the financial implications of various aged care options, thereby facilitating more informed decision-making. These tools are also improving communication and documentation, making the advisory process more efficient and easier to understand.
Within the aged care housing landscape, an understanding of several critical aged care fees is essential, including:
- The Refundable Accommodation Deposit (RAD) – serves as a gateway to flexibility, yet it necessitates a significant upfront cost, akin to purchasing an exclusive ticket to an event
- The Daily Accommodation Payment (DAP) – offers a pay-as-you-go approach, delivering financial flexibility while potentially limiting room choices, much like leasing a high-end vehicle
- The Means-Tested Care Fee (DAC) – operates on a progressive taxation model, with individuals of greater means contributing more
- The Daily Care Fee – serves as the daily living expense coverage, although it is non-negotiable and is contingent upon an individual’s income and assets
- Optional Service Packages – provides a customised experience, yet they come at an additional cost, akin to selecting bespoke services.
A good financial adviser must navigate this intricate fee landscape adeptly, offering a comprehensive approach that aligns not only with financial aspects but also with the needs of the client and family.
This delicate balance, combined with the application of technology to streamline processes, results in personalised, thorough advice that secures the financial future of older Australians during their later stages of life.
Stricter professional standards, including the necessity for Aged Care Specialist accreditation, are now in place to ensure the interests of older Australians are protected, and the advice received is tailored to their individual circumstances.
This article was authored by Luke Robson, Financial Adviser, Wealth Management in Brisbane. It was first published in the 2023-24 Summer Issue of Financial Times.