Regulating aged care advice - White Paper
Protecting Older Australians and Ensuring Quality Advice
Access to financial advice is critical to making well-informed aged care decisions – decisions are needed around what care costs and how to structure finances to afford the care needed, but advice behind these decisions should consider the full client needs, not just an immediate outcome.
We believe that gaps in the regulation of aged care advice are placing older Australians and their families at significant risk of receiving conflicted, inconsistent and inaccurate advice from the growing number of unlicensed providers, exposing these people to serious financial harm. With that in mind, Aged Care Steps (ACS) has been exploring how older Australians and their families access financial advice to support their aged care decisions.
Following the launch of a discussion paper which was based on extensive stakeholder consultation and insights from a survey of over 90 participants in the aged care sector as well as consideration given to academic research and international comparisons, Aged Care Steps is proud to release our White Paper that addresses this subject - “The risk of unregulated aged care advice: Protecting older Australians and ensuring quality advice”.
On this page, you can read through the background to the initial Discussion Paper (Document 3), as well as the key findings from the White Paper (Document 1). The Explanatory Paper (Document 2) contains a more detailed analysis of the survey results, academic research, and international comparisons. Copies of all three documents can be downloaded in pdf format using the links.
To access the White Paper (Document 1), please fill in the form below.
Page Contents:
White Paper: Summary of Key Findings
The White Paper urges the government, regulators and the 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” and incomplete “advice” given by Services Australia, aged care providers and other unlicensed players.
The paper identifies five major issues with how aged care advice is currently provided in Australia and makes five recommendations to strengthen consumer protections. The recommendations are:
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 licensed advisers by introducing financial planning specialisation categories, including aged care 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.
Background of Discussion Paper.
Older Australians (and their families) who need to access aged care services face various challenges in accessing appropriate advice on their choices and funding options. The range of funding options, rush to make immediate decisions, cost of advice, conflicts of interest, and raw emotions are just a few of the issues at stake. Moreover, aged care legislation, choices and costs are constantly changing, enhancing the difficulties with planning and education.
The discussion paper did not focus on the aged care industry's challenges for care delivery, but instead focused on the hurdles faced by older Australians and their families when making decisions on aged care funding options and the longer-term implications these decisions have on the affordability and accessibility of care options, as well as estate planning outcomes.
The objectives set by government to increase the sustainability and funding mix of the aged care industry for the ultimate benefit of older Australians are hindered by the confusion faced when making aged care decisions. Achievement of these objectives will require legislative change, enhancing financial literacy, and access to specialist advice for older Australians and their families to support navigating the aged care industry. A better understanding of the funding choices may drive an increased willingness for consumers to pay a more significant share of costs and reduce the instances and impact of elder abuse.
The current landscape shows a proliferation of unlicensed advice in relation to aged care funding decisions, raising significant concerns for the welfare of older Australians. This trend will further undermine the government's objectives for enhancing financial literacy and consumer engagement in aged care fee structures and funding options, and also presents a grave risk through greater potential for financial elder abuse.
Specifically, the focus of the Discussion Paper was to explore the distinction between information and advice, and whether advice on aged care funding options should be clearly regulated as a financial service under an AFSL as well as whether specific funding mechanisms, such as RADs, should be regulated by defining them as a financial product.
Issues with aged care financial advice.
The Discussion Paper delved into the complexities older Australians and their families face in accessing advice as they navigate the aged care system. The focus was on understanding current practices in the provision of financial advice as it relates to aged care funding choices for consumers, including:
evaluating the advice solutions available
identifying the challenges in accessing accurate and professional advice, and
understanding the effectiveness of these solutions in protecting consumers.
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 aged care needs assessment, 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 and living contributions, and higher everyday living fees. A clear understanding of the full situation necessitates advice on financial, tax, social security, and estate planning outcomes to fully consider the impact of all interactions when accessing care services, as well as 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.
This decision-making process involves interactions with various organisations, including government agencies like My Aged Care and Centrelink, community organisations, placement services, professional service providers (such as financial advisers, accountants, and lawyers) and aged care service providers. The diversity in expertise and focus, obligations, consumer protections, and potential conflicts and biases when interacting with this many organisations makes finding the proper support challenging.
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Providing personal advice about aged care funding options (and the distinction from information) needs to be clarified and more consistently applied to protect older Australians and their families. Personal advice, which leads to investment into specific financial products, is clearly regulated under the Corporations Act 2001; however, a range of contrasting views exist about advice on aged care, which focuses on strategic outcomes, even though outcomes include advice on financial products including basic deposit products.
When older Australians and their families seek advice on aged care, advice provided by unlicensed players often fails to extend beyond the immediate considerations. This myopic focus overlooks the crucial strategic nature of aged care advice and how it encompasses financial product advice, even in seemingly straightforward scenarios like using money from a bank account to pay a refundable accommodation deposit (RAD).
Despite the strategic and financial complexity inherent in aged care advice, a worrying trend has emerged. Financial advice on aged care is increasingly provided to older Australians by unlicensed and unregulated businesses and services. The outcome is a prevalence of superficial, often conflicted advice, no regulatory oversight and a lack of essential consumer protections, thereby putting the client at substantial risk. Unlicensed and unregulated advice also opens opportunities for greater incidence of financial elder abuse. This situation underscores the need to reassess the regulatory framework governing aged care advice, ensuring that where financial options and outcomes are considered by an "advice provider", the advice is holistic rather than solely strategic, legally compliant, and consumer-focused.
This Discussion Paper explored the imperative that individuals who provide aged care advice must be authorised under an Australian Financial Services License (AFSL) as a financial advice provider and comply with financial advice laws, regulations and ethical codes.
Stakeholder insights and experience
As part of this project, we sought information from a wide range of participants, including those providing aged care financial advice and those receiving this advice.
AFSLs and advice providers such as financial planners, accountants, lawyers and aged care consultants.
Aged care service providers including care providers, placement services, peak bodies, and social workers.
Consumers including individuals, carers, families and consumer groups.
Other interested people or groups.
Those interested were encouraged to provide feedback and insights on their experiences with aged care financial advice via our consultation survey.
White Paper
The risk of unregulated aged care advice: Protecting older Australians and ensuring quality advice.
In response to the issues and challenges outlined above, Aged Care Steps undertook a comprehensive survey in 2024 to assess the need for regulation of aged care advice. The White Paper presents the key findings, issues and recommendations arising from this consultation.
The aged care system is inherently complex and continues to evolve. The introduction of the Aged Care Act 2024, including substantial changes to aged care funding from November 2025 further intensifies the need for high-quality professional advice.
The financial decisions required to navigate aged care are further compounded by a multi-faceted system involving numerous stakeholders, including government agencies, care providers and financial advisers. Frequent legislative and regulatory changes contribute to a dynamic and often overwhelming environment for those seeking to navigate it. A wide range of advice sources exists, from general information to complex personal advice. Increasingly, unlicensed providers are offering strategic aged care advice without appropriate regulatory oversight, and often extending beyond their legal mandate.
This lack of clear boundaries between information and personal financial advice has created regulatory gaps that place consumers at risk. When unqualified or unregulated providers cross into the provision of financial advice, older Australians may make decisions with serious and irreversible financial and estate planning consequences. This situation may also undermine public confidence in, and acceptance of, higher user contributions for aged care services.
Addressing these issues is not only a matter of individual consumer protection, but also a significant public policy concern. This white paper highlights the need for clearer definitions between information and personal advice, stronger regulation of aged care financial advice, and enhanced consumer protections in the provision of aged care financial advice.
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The White Paper advocates for aged care advice to be provided exclusively by financial planners authorised under an Australian Financial Services Licence (AFSL), who are subject to relevant laws, regulatory oversight, and ethical standards. Such a framework would significantly strengthen consumer protection by ensuring advisers act in their clients’ best interests, meet minimum education and competency requirements, hold professional indemnity insurance and participate in an external dispute resolution scheme. These safeguards are not available when advice is provided by unlicensed or unregulated providers.
Strengthening the regulation of aged care financial advice is essential to ensuring that older Australians and their families receive clear, appropriate and trustworthy guidance when making some of the most critical financial decisions of their lives.
The paper proposes several recommendations:
Clarify aged care financial advice as Personal Financial Product Advice.
Enhance regulation and enforcement.
Improve identification of licensed advisers.
Educate consumers.
Address accessibility.
A more detailed analysis of the survey results, academic research, and international comparisons can be found in a separate explanatory paper (Document 2). The explanatory paper presents examples of inadequate advice alongside illustrations highlighting the benefits of aged care financial advice.
You can download the documents using the links towards the top of this page.