Ageing population and financial services
Care Adviser Network response to FCA Discussion paper DP16/1
One of the key challenges faced by anyone making care decisions for an older person, whether that is the person themselves, a spouse, younger family member or carer is the emotional impact of a crisis situation and the added pressure to make a quick decision with little time and no previous experience of the care and benefit systems.
Confusion and frustration is caused by a fragmented system with no clear and transparent pathway for personalised care advice and a missing link between regulated and unregulated financial advice. This imposes a reliance on services that are not intended to provide financial care advice and restricts access to the appropriate specialist advice needed for people to make fully informed decisions when choosing and paying for older people’s care.
Types of financial advice
During several ‘Value of Advice’ session in 2013/2014 we asked 264 people including; carers, care providers, adult social care teams, solicitors and financial advisers which of these subjects they were most likely to need information and advice on?
The purpose of the exercise was to establish a priority of need for provision of information and advice on choosing and paying for adult care.
Over 85% of those asked identified a need for unregulated advice on financially related topics for example; NHS Continuing Healthcare funding, welfare benefits, deferred payment agreements, top ups and care and housing options. The clear leader amongst all groups (including financial advisers) was a need for information and advice on welfare benefits.
Care Advice and our ageing population
With the subject of the discussion paper ageing population and financial services we should use the opportunity to consider how people receive care funding advice and how it contributes to an intergenerational, inclusive financial advice provision that can provide real choice and control, delay/mitigate wealth depletion and prevent people falling back onto the Local Authority for care funding.
While considering how people approach and interact with financial advisers and any associated barrier of a lack of awareness of what regulated financial advisers do, how they can help and what it will cost, not just amongst the general public but other professionals has an impact as lost opportunities for regulated advice.
It may not be that people don’t want (or are not able) to cross the threshold but that they don’t realise what help is on the other side.
Care Act 2014
With people being encouraged to approach the Local Authority for information, advice and support there is a need for a fundamental change in behaviour towards care fees planning and a link between unregulated and regulated financial advice.
The Care Act 2014 provides this as a requirement with a new legal framework in Section 4 of the Care Act 2014 and Chapter 3 of Care and Support Statutory Guidance requiring Local Authorities to “actively help and direct a person to a choice of advisers regulated by the Financial Conduct Authority with the appropriate qualifications and accreditation”. 3.51
A reforming law it reiterates the importance of information and advice as prevention and “fundamental for enabling people to make well-informed choices about, their care and support and how they fund it. Local authorities must: “establish and maintain a service for providing people in its area with information and advice relating to care and support for adults and support for carers” and this includes unregulated and regulated financial information and advice
Further practice guidance was also developed to help local authorities meet their duty to facilitate access to independent financial information and advice under the Care Act 2014.
Is it working?
Independent Age published a report (Jan 2016) - Information and Advice since the Care Act - how are councils performing? Which highlights the “mix of quality standards” and “that staff were not experienced enough to provide information on complex topics such as funding care”.
“While the majority are providing a minimum level of information and advice through their websites, our researchers found that more than two thirds (70%) were not able to demonstrate that they had sufficient online information in all the areas required by the Care Act. Only 45 councils out of 152 provided all the online information that is required by legislation.
Adding to this valuable research we wanted to consider the barrier to financial services of this “mix of quality standards” and for a guide on how Local Authorities are meeting the legal requirements “to facilitate access to financial information and advice which is impartial and independent of the Local Authority” we sent a freedom of information request asking the 152 Local Authorities in England;
1) Are your staff and any other information and advice providers used by you able to:
Identify people who may benefit from taking regulated financial advice
Describe the benefits of taking regulated financial advice
2) Have you provided training to enable this? If so please state the method/s used
3) How do you ‘facilitate access’ to regulated financial advice when appropriate? (3.51)
4) Do you have a specific financial advice pathway for self-funders?
5) How do you quality assure financial information and advice provided by your staff and/or any external providers?
Responses to FOI request
81 out of 152 Local Authorities responded to the request.
Of the 81 responses;
54% said their staff were able to identify people who may benefit from regulated financial advice.
58% said their staff could NOT describe the benefits of taking financial advice
43 out of 81 had provided training, of which 20 was general Care Act training including information and advice. Only 9.3% had provided specific financial advice awareness training.
Q3. ‘How do you ‘facilitate access to regulated financial advice’ included responses indicating use of internet links and signposting to SOLLA (26) and the FCA (7). But this question also seemed to cause the most confusion with many responses indicating that the Local Authority satisfy this requirement by providing access to Citizens Advice, AgeUK, Independent Age, Care advice organisations (Care Advice Line, My Care My Home), Money Advice Service and Which?
There was a clear lack of understanding of the differences between regulated and unregulated financial advice for example; 81% responded NO to question 5 (How do you quality assure financial information and advice), with many stating that that they are not responsible for quality assuring financial information and advice. Some having also said that the internal financial assessment teams deliver benefits advice for those who have been assessed with an eligible need. This seems to ignore the requirement to “review a strategy and learn from ensuring appropriate quality assurance and review, including customer feedback to make sure that the service learns from experience and continuously improves”. (3.56)
Some of the comments included;
“We do not expect staff to make a judgement when regulated advice is appropriate”
“We use external agencies to give regulated financial advice i.e. provided through reputable agents such as Citizens Advice Bureau. CAB has its own regulated training methods”
“Care Act 2014 training has been provided to internal and external teams, including specific ‘Working with financial adviser’ workshops outlining when and how to appropriately ‘facilitate access’ to regulated financial advice. Independent financial advisers have attended these sessions to provide an overview of the advice services that are regulated by the Financial Conduct Authority”.
“The Council would benefit from any advice offered in implementing and/or monitoring the ongoing effectiveness of a care funding advice pathway”.
Demand for care funding advice
There are 11.4 million people aged 65 or over in the UK and an estimated 4 million with a long term illness.(1)
In England, 371,770 people aged 65+ received community-based care and support at home in 2013/14 (2)
3 million people are currently receiving state support for care services in England (3)
Approximately 475,000 self-funders (4)
On average, around one in three women and one in five men aged 65 will enter a care home at some point in the future (5).
Currently 433’000 people in care homes (2014/15) (6)
The NHS deals with 1 million patients every 36 hours (7).
Two thirds of NHS clients are aged 65. Of the 16 million adults admitted to hospital last year, almost 8 million were aged 65+ and up to 60% of older people in hospital have mental health problems or develop them during their stay. (8)
Providers of regulated advice
There are 26’569 regulated financial advisers in the UK (FCA 31/7/13), a few thousand with either CF8 or Level 3 Certificate in Long-Term Care Insurance and several hundred dedicated to later life advice and SOLLA accredited.
Regulated advisers who are not all specialists in choosing and paying for care may also belong under the demand heading, requiring support from unregulated advisers who can help them to provide a quality assured inclusive advice service, avoiding duplication of effort and saving time.
Providers of unregulated advice
Alongside the wealth of online ‘menu driven’ financial information available much is also provided by those who work in the 1.63 million Adult Social Care jobs in England (9) and the 1.3 million people employed by the NHS in England (7), 5.8 million informal carers, care providers, independent support brokers and social workers, personal assistants, advocates (informal and independent) and specialist care advisers, voluntary sector and specialist disability organisations, all providing varying degrees of information and advice.
Requiring staff who are not competent to provide complex care funding advice and don’t understand how regulated advice can help costs money, it compromises quality assurance and expertise and risks damaging consumer confidence. Never has this need for integrated working and a standard to unregulated care advice been more important.
A joined up approach
Without question care fees planning needs a specialist and intergenerational advice approach from both regulated and unregulated financial advisers.
Not everyone planning for care or making a care decision will benefit from regulated advice. A care journey does not need to begin with a regulated adviser and with demand significantly outweighing the number of specialist regulated financial advisers it is neither appropriate nor achievable.
Using the expertise of unregulated advisers who can quality assure their advice should be considered good practice, in the same way as unregulated advisers should understand and acknowledge the value and role of a regulated financial adviser to provide a comprehensive, joined up advice provision.
To build consumer confidence it must be clear who does what - a transparent pathway to quality assured financial care advice with a joined up approach to make sure that care and life choices are appropriate and affordable.
1) Mid-2014 Population Estimates UK Office for National Statistics, 2015. General Lifestyle Survey 2011, Office for National Statistics, 2013(1)
2) Community Care Statistics Activity Report 2013/14 (England)(2)
3) Health and Social Care Information Centre (2013a). 2012-13, Final Release – Health & Social
4) Department of Health (2013). Caring for our future: Consultation on reforming what and how people pay for their care and support.
5) The Commission on Funding of Care and Support (Dec 2010), Call for evidence on the future funding of Care and Support
6) Laing and Buisson (2014) Care of Older People – UK Market ReportCare of Elderly People Market Survey 2013/14, Laing and Buisson, 2014
7) NHS Choices
8) AgeUK Later Life report
9) National Minimum Dataset for Social Care 2013