Topic 9 - Analysing a Client's Position Flashcards
What considerations should the adviser make when identifying the client’s needs for Long Term Care?
LTC Insurance regulated as if it were investments
Basic checks needed if immediate care required:
State Benefits - Client and anyone caring claiming appropriate benefits. If going into home should consider changing basis of claim from joint to single and check entitlement has not changed.
Local Authority Assistance - Support should be given such as valuing client’s assets.
Health Needs - Are they entitled to make claim for NHS Continuing healthcare?
Property (Legal Ownership) - If a partner needs to move into care home, they could consider changing ownership to tenancy in common to allow partner to will their half to beneficiaries to avert means testing for care but legal advice should be taken.
Property (Other considerations) - If empty after client has moved into care, may be need for deferred payments agreement and as such authority should disregard property for 12 months and adviser should check this is upheld. Also will need to advise home and contents insurer that property is empty.
Council Tax - Entitled to council tax exemption while property is empty after indivdual has moved into care.
Joint Accounts - Paying for care in joint account should consider splitting account to separate affairs and allow easier financial assessment.
Power of Attorney - Consider Lasting POA when fit and well to save them costs of the Court of Protection.
Choice of Accommodation - Check appropriate accommodation is affordable and confirm local authority will fund the care.
Existing Financial Arrangements - To determine if they can afford care fees.
Reviewing Long Term Care Provision
Changes to marital status - First of married couple living in same home, the home is disregarded.
Death and Divorce - Any assets willed or divorce settlements taken into account for assessments.
Health Changes - Mental capacity or likelihood of surviving for shorter/longer than expected.
Changes in Need - May recover and be able to fulfill more ADLs so claim may be reduced.
Mental Capacity - Must be sure of capacity before buying LTC insurance. If it is impaired may need to involve family member or friend with authority.
Changes in Legislation - Complex and provision spread across different bodies. So need to assess availability and benefits annually in case of changes.
Moving Abroad - If moving abroad and requires care, need to return to UK for local authority and insurance claim assessment.
Changes in Taxation, investment conditions and inflation - Adviser aware of current economic climate and changes to provide proper advice.
Care Cost Awareness - These change and rise quickly so this is also important to be aware of average cost of care in areas.
What Sources of Help are out there for the elderly?
Age UK - National charity formed in 2009. Help people make most of later life and offers support services and advice on finances, health and wellbeing. Also carries out training and research and ensures the interests of the elderly are considered in government policy.
Citizens Advice - Since 1939, government funded and aims to provide free, independent, confidential and impartial advice to everyone on their rights and responsibilities. Provides 24 hour online service
Money and Pensions Service - Started in 2019. Set up by government and funded by levy on financial services industry to help people manage their money through free and impartial advice on website.
Communicating with Clients
Explain concepts and complex information in a way they can understand. At intellectual level but not patronising.
Listen – analyse what the client is really saying and react accordingly.
Read basic body language – Awareness of gestures, posture, facial expression and use of body to understand what client is feeling and meaning.
Explain verbally, and in writing, the meaning of any terms and words that the client may not be familiar with.
Write clear, concise reports and letters avoiding jargon.
Plan written communication so that it has maximum clarity and effect.
Sound technical knowledge and the ability to apply that knowledge to client situations are essential. This requires the adviser to:
identify the parts of the information that the client needs to know;
decide the best way to present that information to the client;
anticipate many of the questions the client is likely to ask, and prepare answers.
Ethical Considerations
Where no strong loyalty exists, consumers will look for signs that demonstrate reputation and trustworthiness.
In some markets this may be a well-known brand; in others, particularly where advice is given, perceptions of professionalism may act as a proxy for trustworthiness.
It is important to recognise that generalised trust levels are the critical factor in encouraging initial engagement.
Low levels of trust are a significant factor in the lack of engagement of large sections of the population with financial services.
The outcome of all the positive aspects of communication and ethical considerations is that an adviser has the opportunity to earn a trusted adviser status with their clients.
As far as long-term care planning advice is concerned, when dealing with all clients, including the potentially vulnerable, a trusted adviser will be able to understand their client’s current situation, immediate needs and longer term objectives.
The adviser needs to move into a position of trust where the client turns to them for advice in the first instance for all their financial needs, as well as the adviser proactively approaching the client to review and meet their changing needs.
This also links to the potential to look after the whole family from an advisory perspective as all of their needs may be influenced or led by the original subject(s) of the long-term care plan. The same trusted adviser would be best placed to understand the family dynamics and advise all members appropriately.
