Navigating the transition to residential aged care is often stressful and complex for older Australians and their families, requiring immediate and well-informed decisions. This process includes obtaining an assessment from an Aged Care Assessment Team/Service, selecting the best-suited care provider and determining the most appropriate funding method.

The costs of care for an older person encompass accommodation payments, daily care fees, and additional service fees and often necessitate financial, tax, social security, and estate planning considerations and advice to consider all the interactions when accessing care services and ongoing as situations change. Furthermore, these decisions are often made by another person on the older person's behalf under an Enduring Power of Attorney or financial management order, requiring greater protection of the older person's rights and best interest.

Because of this, the decision-making process involves various organisations, including government agencies like My Aged Care and Centrelink, community organisations, commercial placement services, professional service providers - such as financial advisers, accountants, and lawyers - and the aged care service providers. The diversity in expertise and focus, obligations, consumer protections, and potential conflicts and biases when interacting with this many providers makes finding the proper support challenging.

Many of these services offer assistance and advice to help clients understand financial options. However, they may leave the ultimate decision-making to individuals or families, who are generally ill-prepared and prone to poor decisions about funding their aged care. Where the services assist decision-making, the unregulated providers often focus decision-making on immediate outcomes without considering the full implications for the client. Unregulated advice services may need checks to monitor conflicts and biases in their advice and assistance as well as valid expertise, but without a regulatory framework, there is no oversight to ensure this occurs. Both advice types (when sitting outside a licensed environment) are shallow, need more regulatory oversight and consumer protection, and often lead to poor consumer outcomes.

The Royal Commission into Aged Care Quality and Safety highlighted many examples of adverse consumer outcomes and areas where the system needed improvements, focusing on access to aged care services and quality improvements. For example, the Commission noted, "The complex capital financing arrangements for residential aged care accommodation can distort incentives for older people and providers, and can impose a large cost burden on older people and their families." Further, the Commission noted, "We have heard there is a power imbalance during payment negotiations between providers and incoming residents." For these reasons, properly trained, registered, and regulated service providers can support those with aged care needs and their families in making the right decisions for their financial position and care needs around how to fund aged care service purchases.

The best outcomes for older Australians and their families arise when decision-making, particularly around financial, tax, social security, and estate planning, is provided to achieve the right outcome for day one as well as through the care and after-care phases. While aged care advice is predominantly strategic advice (i.e. investment into specific financial products is less likely to be recommended), it does cover classes of financial products, and advice is provided, even in simple scenarios such as where the recommended (or implied) strategy suggests taking money out of a bank account to pay a RAD (or daily accommodation payment - DAP) and fund ongoing fees. The Corporations Act 2001 defines 'product advice' as including a class of product advice which involves taking money out of, holding, or putting money into a specific financial product or asset class. The lack of a recommendation for a specific product option does not preclude the individual advising from providing personal advice, therefore capturing that advice under the Corporations Act.

There is a perception that health care and accommodation are the primary functions of a well-operating aged care system. However, financial security and positive outcomes for customers and their families are also critical. Where financial security is not evident, this can lead to significant detriment and financial stress. In short, the current unregulated aged care advice system puts older Australians and their families, the government and the aged care system at considerable risk of adverse financial outcomes through higher funding costs, an inability to access needed services due to economic constraints and a further perception of a sector which doesn't look after the very people who are most vulnerable in our society.

The alternative is to limit unlicensed services to factually explaining how the aged care system works, how to access care, the available care options, and generic fee information. However, consumers will often trust anyone explaining options clearly, not realising that the information may be conflicted and not in their best interest. As seen in other parts of the financial services industry, the distinction as to when an explanation contains only information and not personal financial product advice, which includes calculations and strategy analysis to ensure it is in the client's best interest, needs to be transparent to consumers, clarified in law, and regulated to ensure compliance.