New industry white paper: The risk of unregulated aged care advice: Protecting older Australians and ensuring quality advice
A new white paper released by Aged Care Steps today explores the urgent need to regulate aged care financial advice to ensure older Australians and their families have access to transparent, accurate, and suitable guidance.
The complexity of making accurate recommendations when it comes to aged care is becoming even more necessary as Australia's population ages. The financial advice guiding decisions can often result in long-term consequences, and it is essential for advice to be holistic and tailored for each individual.
Aged Care Steps has identified that the current regulatory landscape lacks the clarity and oversight needed, leaving many older Australians vulnerable.
The report urges the government, regulators and broader advice industry to make a clear distinction between personal advice and information in relation to aged care funding, citing a proliferation in “advice errors” given by Services Australia, aged care providers and other unlicensed players.
The paper identifies major issues with how aged care advice is currently provided in Australia and makes five recommendations to strengthen consumer protections.
Key findings from the white paper include:
Regulatory gaps: A lack of boundaries between information and aged care advice.
Consumer risk: An unlicensed system has the potential for exploitation and/or financial harm.
System complexity: The complex nature of aged care planning makes it difficult for the average consumer to make informed decisions.
Lack of consumer awareness: Many older Australians are unaware of the importance of seeking professional advice.
To address these issues in a comprehensive and timely way, Aged Care Steps’ white paper proposes the following key recommendations:
Clarify aged care financial advice as Personal Financial Product Advice under the Corporations Act and require providers to be authorised under an Australian Financial Services Licensee (AFSL)
Enhance regulation and enforcement by strengthening the Australian Securities and Investments Commission’s role in overseeing aged care financial advice
Improve identification of accredited and licensed advisers by introducing financial planning specialisation categories, including aged care funding advice, on the Financial Advisers Register (FAR)
Launch a public campaign to educate consumers about the value of licensed financial advice and how to find an accredited aged care adviser, and
Explore ways to improve the affordability and accessibility of aged care advice, such as through subsidies or new service models.
The Aged Care Steps report is based on extensive stakeholder consultation with consideration to academic research and international comparisons. It also features insights from a survey of over 90 participants in the aged care sector.
By implementing these recommendations, we can create a more robust and transparent system that protects older Australians and ensures they receive the quality advice they need.
Aged Care Steps is committed to advocating for the rights and financial security of older Australians.
We urge Australian policymakers, regulators, and industry stakeholders to consider these recommendations and take swift action to implement reforms that will benefit our ageing population.