A new discussion paper explores whether individuals and organisations which provide aged care financial advice should be authorised under an AFSL and comply with financial advice laws, regulations and ethical codes.
Aged Care Steps, which provides advisers with the resources and tools needed to offer aged care advice, has launched a consultation project that explores how older Australians and their families access financial advice to support their aged care decisions.
It is seeking feedback from AFSLs and advice providers, alongside other stakeholders.
The organisation says that the project, centred on a discussion paper and stakeholder research, was launched “…after a worrying trend emerged.”
It says that despite the strategic and financial complexity inherent in aged care advice “…financial advice on aged care is increasingly provided … by unlicensed and unregulated businesses and services.”
…the outcome is leading to a prevalence of superficial, often conflicted advice, no regulatory oversight, and a lack of essential consumer protections…
It says the outcome is “…leading to a prevalence of superficial, often conflicted advice, no regulatory oversight, and a lack of essential consumer protections, which may place the client at substantial risk and lead to decisions that are not well-informed.”
Louise Biti, Director of Aged Care Steps, says the variety of care options, the rush to make immediate decisions, cost of advice, complicated fee structures, conflicts of interest, and raw emotions are just a few of the challenges people face when accessing aged care advice.
She adds that moreover, aged care legislation, choices and costs associated with aged care are constantly changing.
…the delivery of personal advice on aged care financial decisions needs to be examined and regulations need to be clarified and more consistently applied…
“We believe that the delivery of personal advice on aged care financial decisions needs to be examined and regulations need to be clarified and more consistently applied to protect older Australians and their families.”
Aged Care Steps says that personal advice, which leads to investment into specific financial products “…is clearly regulated under the Corporations Act 2001 as personal advice; however, a range of contrasting views exist about personal advice on aged care, which focuses on strategic outcomes, albeit strategic outcomes which include advice on financial products including basic deposit products.”
Its discussion paper explores “…whether individuals and organisations who provide aged care financial advice should be authorised under an AFSL and comply with financial advice laws, regulations and ethical codes.”
Alongside the discussion paper, the consultation project will include research with key stakeholders within the financial services sector, aged care sector and other connected support areas as well as older Australians and their families.
Click here to read the discussion paper and here to share insights via the survey.
The consultation period will run until 10 May, 2024.
Once the consultation has ended, Aged Care Steps will prepare a white paper as a basis for engagement with the relevant industry bodies and regulators “…to work towards meaningful changes in the regulation of aged care advice in the interest of protecting older Australians.”
