Financial advice: Planning for peace of mind

As part of our goal to encourage 'care conversations' ahead of the point of need, we discuss the value of looking into funding options, and there are many...

Very often, we receive requests for our home care services from relatives or individuals that are at a point of crisis. It may be that a loved one has fallen, suffered a sudden injury or illness or often that a family member has visited after a long period of time and realises that their loved one needs support, as a matter of urgency.

It’s been a longstanding goal of ours to encourage ‘care conversations’ ahead of the point of need. This enables clear and informed decisions to be made, vital needs to be met and importantly, the wishes of an individual to be followed too.

If you have taken part in one of our free ‘Choosing the Right Care’ Community Talks workshops, led by our Owner/MD Mark McGlade, you will recall the advice that in our experience, conversation is key to achieving the very best outcomes.

Having these ‘care conversations’ between couples, family members and legal representatives such as Power of Attorneys, can often highlight potential areas of risk – such as a lack of knowledge on behalf of one party in a marriage, with regards to their financial situation. This lack of knowledge could leave them vulnerable to exploitation if they find themselves suddenly without their life partner, who was for many years in control of money matters. So, for a range of reasons, it’s sensible to talk.

Even with the best laid plans in place, if a person loses the ability to make decisions about finances and has not nominated or appointed a person of trust to make decisions on their behalf (such as a Power of Attorney), funds will effectively be frozen – meaning that the state will then make the decisions that it thinks are in the best interest of an individual, until another party/person is appointed to do so. Our article, ‘Choosing a Power of Attorney’ explains this a little further.

The financial cost of care is always a consideration but yet again, discussing the matter in advance allows all parties to make preparations and to look into the options that might be available. There are generally three options available to those that look to self-fund their care:

Hold cash – Anyone who needs care is advised to hold a sensible amount of ‘cash’ (in the form of funds held in a bank account) as this is the standard method of payment to a care provider. Having ‘cash’ funds available also means that you can quickly adapt as care needs change. However, holding too much ‘cash’ could compromise your ability to fund care fees for an extended duration.

Hold Investments – Holding investments as opposed to cash, offers the potential to achieve a higher return than regular interest rates will achieve. This could be important if you are looking to pay care costs over a period of years. It is very important that the investments have what could be considered a ‘sensible risk profile’ so that the value of your investment is not at extreme risk.

Buy a Care Fees Annuity (sometimes known as a Care Fees Plan) – In basic terms, this means giving an insurance company an amount of your capital in exchange for the insurance company guaranteeing to pay your care provider a regular amount, on a monthly basis, for the rest of your life.

An appropriate financial plan could involve a combination of all three.

All too often, an assumption is made with regards to the inevitability of residential care, and in many situations, there is an alternative – even with limited investments.

If you decide to move into Residential Care it is sometimes considered sensible to sell your home, but if you prefer to stay in your own home and you own it, equity release can potentially be another way to raise the cash you need to meet your care and support costs.

Home care provision can offer you greater control and, depending upon the degree of care and support you require, it can also be a lower cost. It is a financially comparable option – especially given the rising costs of residential care.

This option also allows an individual to retain a sense of independence, as they continue to live in the home that they love. Fluctuating rates of Covid-19 remain a concern in residential settings too. These are all topics discussed in our recent article, ‘Home Care or Care Home?’.

In order to explore the options, some find that the guidance of a Financial Advisor is beneficial. However, this area alone can present complicated choices and areas of concern…

The financial services sector is overseen by a number of regulatory bodies and organisations, some of which simply offer accreditations in return for a membership fee, and others which require members to adhere to strict guidelines and to take additional examinations and advanced, specialist training in order to qualify. The latter is preferable, as service users can then feel assured that the Advisor that they are trusting does indeed have specialist knowledge.

Home Instead would always suggest that Clients use a Society of Later Life Advisers (SOLLA) accredited member for legal or financial advice. The SOLLA organisation also has ‘tiers’ of membership, with some simply joining as an ‘Associate Member’, which allows them access to some of the organisation’s resources and training, for free.

A fully accredited SOLLA member will have successfully completed a number of specialist examinations and will have been rigorously tested by SOLLA to check their knowledge, experience and skills – at considerable cost. They will be entitled to use the letters LLAA after their name. A comprehensive list of fully accredited members can be found on the SOLLA website, at: – Click HERE for a direct link.

LLAA accreditations are only awarded to individuals, not to companies as a whole. Meeting two or three LLAA advisors before you decide which one, if any, to instruct, could mark the start of finding fair and trustworthy financial advice.

It is important to note that full SOLLA Members come in two forms: Restricted Financial Advisers or Independent Financial Advisers.

Restricted Financial Advisers, one way or another act as an Agent of their principal organisation, meaning that they are restricted to advising on whatever range of products or investments their organisation allows them to offer. They also usually only earn a fee if a product is purchased.

Independent Financial Advisers act as Agents of their clients, and are duty bound to select the most appropriate product or investment from all those available in the market. Independent Financial Advisers charge for their advice and service in different ways. Some charge fixed fees which are not linked to the sale of a product or investment, others charge a percentage of the product purchase price or amount invested. Some charge a fee for advice and then a further implementation fee when a product is bought or sold.

Details about how an Advisor operates are important questions to ask when looking at the terms of a contract on offer and making decisions. If a Financial Adviser only gets paid if you purchase a product or investment, this could present them with a conflict of interest – particularly if the more you invest the higher their fee they will earn.

Whilst we cannot offer recommendations with regards to financial matters, we would encourage those looking to undertake financial advisory services to thoroughly investigate their options in relation to financial guidance and investment, and to seek the advice of trusted organisations such as the following, if in doubt.

The Citizens Advice Bureau can offer limited support, including access to their Benefit Calculator and personalised advice in relation to State Benefits.

CoPPA is an organisation that aims to develop good practice in the Court of Protection and works in conjunction with trusted organisations through a process of education and training.

The Financial Vulnerability Taskforce is a newly created and independent professional body which covers the Personal Finance, Insurance and wider Financial Services Sectors. It has an aim of promoting understanding, encouraging appropriate behaviours among Advisers and establishing good practice with regards to consumer vulnerability.

If you would like further information regarding choosing the right care, please don’t hesitate to contact our team.

Our officially ‘outstanding in all areas’ home care offers a variety of options from companionship through to more complex care needs and Live-In Care options, including our Care Solutions plan. In all regards, we are here to help.

Find out About Us on our website, talk to a member of our team on 01395 200600, send us an enquiry via email or find us on Facebook, to discover why we are different.