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#242 Louise Biti – Transcript

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SUMMARY KEYWORDS

clients, aged care, advisors, people, homecare, advice, home, fees, conversation, frailty, financial planners, kids, families, problem, community, support, consumer, packages, business, understand

SPEAKERS

Capital Group, Fraser Jack, Louise Biti

 

Fraser Jack 

Welcome to the x y advisor podcast, a global community of financial advisors sharing and learning with one another to drive the positive evolution of financial advice. To get involved, go to x y advisor.com. Or simply download the x y advisor.

 

Capital Group 

What gives me confidence about investment decisions? rigorous fundamental research with portfolio managers focused on the long term, who looked beyond the spreadsheets to understand the companies they invest in from break room to boardroom, who know the only way to get a 360 degree view is to go around the world to get it can I rely on in depth research to give me steadfast confidence with Capital Group? I can.

 

Fraser Jack 

Welcome back to the x y advisor podcast. I’m Fraser Jack and today I’m joined by Louise v. Kayla wheat. Hi, Fraser. Jack, good to be here. Thank you for coming and having a chat with us today. Now, if you want to give us a quick overview of you and what you’re doing at the moment.

 

Louise Biti 

So I’m a director of aged care steps, aged care steps works with financial advisors, lawyers, accountants, anybody who’s trying to give advice to people about affording aged care accessing aged care and planning for the future. Really fantastic. And

 

Fraser Jack 

you’re absolutely right, that is a large group of people. Often it’s, there’s a, there’s a planner involved in there somewhere, but it can be some, you know, a whole lot of randoms, from from time to time from hospital staff to doctors, to lawyers to you know, trusted professionals in any particular way.

 

Louise Biti 

Yeah, there is it is a wide group, because there is so many people who are looking for help on aged care advice, but really don’t even know where to start. So it might be that they’re in the hospital cafeterias trying to figure out what to do. And they’ve been given a diagnosis for mom or for dad. And it’s the hospital staff who are there, helping them or guiding them or giving them some experience about where they’ve been or who what they’ve seen their other clients, or patients look for as well. And sometimes it’s just randomly how clients find somebody to help them give the gift get access this advice, which is one of the reasons why we spent a lot of time talking to financial planners saying, you need to start the conversations, you need to start telling people that you can help with aged care and getting that message out there. Because we would much prefer the first person a client speaks to being a financial planner, and not somebody in the hospital.

 

Fraser Jack 

Yep, exactly. Right. And it’s and it’s one of those experiences that people tend to go through so few times in their life from the you know, from the consumer point of view, that they really don’t know what to do or what to look out for, and really do need to reach out to those professionals. So we’ll get we’ll get on to that. But we might start with a little bit about you. Tell us about your journey. Where did you start in this in this profession

 

Louise Biti 

that feels like such a long time ago now phrase that I’ve always worked, I guess in the technical services area, looking at legislation, understanding it, analyzing it, working out where the strategic opportunities are. But my very first step into that was with a consumer organization, back in the days when I lived in Canberra. And that was when the Department of Social Security, as it was called in was starting off with deeming and getting clients to think about how their investments impacted pensions. So the consumer organization I work with, trained for the fis offices, we produce brochures for them. And we had a helpline for consumers to just 60 times a day answer how does deeming work. So Social Security has been a very comfortable area for me because that was where I started. And then as I moved into the wider area of financial advice with superannuation attacks, I enjoyed those areas. But I think the social security in aged care has always been my passion. It’s about solving problems for clients and strew puzzles, you know, it’s strategic advice that uses all of our financial planning skills. And also to what I’ve looked for throughout my career is where the gaps are. Where are the emerging trends and needs in advice? What is nobody else really focused on or providing advisors with support on? And how can we fill those gaps and aged care has been right in the middle of all of that as a great big gap that people were either hoping they could ignore, or just not sure how to get started in so here we are. Fair enough. Now, a true problem solver at my own heart here. I love the problem to solve. So

 

Fraser Jack 

Let’s clearly say that I’m a nerd though that that’s also cool. We love nerds. You’ve obviously seen a bit of changes over that time is it sort of the system has changed many times, I guess over a period?

 

Louise Biti 

Well, we have we’ve had a couple of major periods of transformation, you know, within, we’re looking at aged care legislation, or 1997, was a start point where the Aged Care Act came into introduction. 2014, was where we saw a major overhaul in the calculation of fees. And I think that’s the point where financial planners really started to notice aged care, because these are becoming more expensive, they were more visible what they were charging, and the strategies became more prominent. And recently, nobody’s missed that we’ve had a royal commission into aged care quality and safety. And that’s led to this budget, the government announcing an entire new focus and structure and formatting of the aged care system to improve how it works for clients and for consumers as well.

 

Fraser Jack 

Yeah, amazing. It’s interesting to see what’s going to come out of the the what’s actually going to be put in place out of the back of this royal commission, there’s been some some fairly interesting ideas, I guess, put forward but I guess we what we need is lots of ideas and to be able to debate those in a way that, you know, works out what’s best.

 

Louise Biti 

As I was saying, I mean, proof is in the pudding that the direction the government is is is talking about is right. It’s very consumer focused, it’s based on needs, it will offer as much more choice and sustainability. But it’s how they pull all that together, because it’s a massive, massive job. And is it just rhetoric? Or is it really action that leads to change. And we do need to wait and see that. I think that’s where consumers are starting to be very concerned and wanting to take more control themselves, which is why we’ve seen this starting to be something that financial planners, and now putting their hand up to say, we need to understand aged care advice.

 

Fraser Jack 

Yes. And I like the way you talked about being controlling, because I think that’s that could be a driver for where this turns out making sure that people do have control control over decisions. And those sorts of things. I think that advisors play a big part of that. I want to get back to the 2014 piece when obviously the fees all changed. And there was a lot of complexity around how things were going to be calculated and and that need for not just the finding a bid conversation and what’s going to happen, but the whole financial side of it came into force, talk us through that period, and how you work with advisors then.

 

Louise Biti 

So during that period, I guess the main change was that these were going to be published for accommodation. So it was about the cost per accommodation went up quite significantly. But we could see exactly what any particular provider was going to charge. The biggest issue from a financial planning point of view, though, was that clients were told very specifically, you have a choice, you have a choice to pay the lump sum, which we often talk about the Reds as being buying the right to live there. So consumers were told you have the choice to buy the room, or to pay a daily fee, which is effectively to rent the room. And then clients we’re going war. How do we sort through that, that scenario. So that was one of the major changes, I think the fact that the fees went up, they were visible, and choices were given to consumers. So that meant financial planners needed to be geared up to talk clients through how they make those choices, what the financial impacts of those choices are, and not just financial impacts on the day they go into care, but right throughout the rest of their life with anything that changes how that will then drive it as well. And that has quite a lot of strategic impacts. So for financial planners, we set up a accreditation training program. And that accreditation training program goes way beyond just teaching them how the legislative rules work or what the fees are and how to calculate the fees. It goes right through putting in how does the Aged Care advisor process work? How does that fit into a normal financial planning practice? What knowledge does an advisor need, what skills, how to have the conversation, how to market the business? So all of the things about being business ready, being able to communicate and identify need and discussions with clients being To promote the business, been able to define service propositions and pricing models, but most importantly, be able to develop advice, solutions and strategies and explain them to clients.

 

Fraser Jack 

Yeah, this is this certainly is a lot to talk to me about this knowledge and skills, I think that’s probably where an advisor starts to think about getting into the, into this space and becoming an aged care specialist. What do they need to bring in before they before they start,

 

Louise Biti 

I think with the starting point is to really think about your own passion and your own client base in your own business model. Because even though we say every single advisor needs to include aged care advice into their financial planning business, in no way do I mean that every single advisor needs to be an expert, because we have worked with a lot of advisors who say, it’s not my skills, not my passion, but I know my clients need help. So we can give them enough information to be able to have those conversations, and then connect them with other advisors. Who can be the referral gets outsourced and refer their clients to them. So it might be just create awareness with clients refer to somebody else, but you as the advisor, stay in control of that.

 

Fraser Jack 

Yep. So the very first step is to become the GP, if you like in that the general practitioner, when you can understand enough to know when to spot the opportunities and when the need arises and got to have those early conversations with the clients, and then refer off and then and then as you as you develop your skills, you can then if you if like I said, if you had the passion for it, you could become a specialist.

 

Louise Biti 

Yeah, I think that’s exactly what it is. You are the generalist to start with. And then as you find your processes, you become more efficient, and you get more business and you enjoy it, then you decide to move through the various stages of becoming more and more involved in that advice process, and potentially becoming a specialist. Not everyone’s going down that pathway. But we do work with a number of advisors who, who do these days do nothing but aged care advice, and run very profitable businesses.

 

Fraser Jack 

And what we’re talking about this from a profitable business point of view, let’s look at the opportunity and the need. Going forward. Obviously, we’re talking things like the baby boomer population, starting to the stage with it with is where they’re maybe slowing down a little bit or starting to look at what what’s available. So let’s, let’s talk about that a little bit. What sort of, from an advice business point of view, what’s what, what’s what’s looking, looking ahead, what’s there.

 

Louise Biti 

Yeah, we often talk about the three phases of retirement, because one of the things we think, is that a lot of advisors don’t focus on aged care until the client puts a hand up and says, we’re in crisis and aged care events happened. We need help. Now. Now that that’s a great piece of advice. And something that advisors can definitely help a client to navigate through. But we think there’s also a really important piece, stepping back from that with all of the clients that an advisor has, as you say, to think ahead and say, where are we focusing on for retirement? What are the three phases that we go through, and with those three phases are an active phase, just where we’re having fun taking off our bucket list, spending money doing those things, then we will move through to a quiet phase, which is where we’re still very independent and still able to do things on our own. But more and more, it’s about slowing down, bringing some support to you in your homes, which can help you stay safe, help you to live more independently. And then then there’s going to be a frailty period. So we go through active phase quiet phase frailty period, where progressively we go through from independence to support remained independence, to support to just help with our activities of daily living. So all of those three phases have a different focus from financial planning around identifying the need, setting up the structures, helping clients think through to where they live, how they live, who supports them, and what financial resources they have available to meet them. And if we’re not having those conversations with clients, we’re not going to have them in a spot with they’re really unprepared to be able to switch easily and to have choice and control when they need to move into that next phase.

 

Fraser Jack 

Fantastic. And as you mentioned, those those three different areas I sort of see it as a you know, this three The three areas I guess, but there’s a transition between each of those areas as well as needed sort of a spectrum, if you like, between one and the other. And for advisors to be able to spot that and identify the signs and signals of when somebody is moving, say, from an activity to a quiet phase, or from a quiet phase into a, you know, friendship, fragile a period

 

Louise Biti 

of frailty period. Right. And they’re very hard conversations, sometimes for advisors to have, but they’re also very hard conversations for the clients to have. And I think as financial advisors, be brave, be brave, where you see a client may be moving through and the signs that they’re that they’re in that transition between phases, raise it, I mean, you’ve got good relationships, your clients trust you, they seek advice from you, your objective to their family situation, what we find is so often, and I find this with my own parents as well. Older people are not willing to, they don’t want to concede defeat, they don’t want to go to the kids and say, I’m struggling, I need help, because they think as soon as they do that, the kids are gonna swoop in, take control, push them into a nursing home, and be done with them. So financial advisors, offices, and the meetings that you have with the clients is a safe space, your objective, you’re there to point out and help them through those various difficult times. So I think brace it, when you see that happening, it’s about how do you raise that conversation, to say to the client, we’ve talked about the three phases where it’s good to talk about three phases. And I’m wondering whether we’re moving through a transition phase, whether we should be looking at how we can support you to keep your independence. Now,

 

Fraser Jack 

it seems to be a very big driving event, and then a few times controlling independence, is that something that is would be your starting point, I guess of any conversation?

 

Louise Biti 

I think it is rather than looking at the defeat side of it. And so what we find with aged care is nobody wants to talk about it. Because there’s nothing at all positive in it. It all seems to be that slippery slope downhill. But what we’re saying is that aged care is just such a broader picture than that it really is just about getting access to care, but maintaining quality of life, right, throughout a whole life, no matter what a health slide, what are mental capacities, like? How do we maintain quality of life? And so there are many different ways we can do that, you know, do we do that in our own home? Do we do that in our children’s homes? Do we go to a residential environment, but being able to evaluate the options, and be able to decide what’s important to me as a person? What resources do I have either financial or personal around me? And what can I make work where I’ll be safe and happy is a major role. And this is it financial advice is not necessarily about telling clients What to do? It’s about working with them to decide what’s important to them as a person? And how do they best achieve that, and what’s realistic for them. So sometimes it’s a reality check. We might not want to go to a residential environment. But maybe that’s the best place for us and for our families, to be comfortable to be able to support us as well.

 

Fraser Jack 

I really like this concept of it as just as you were saying that it sort of made me think that the clients the hero in this in this journey, you know, the advisor makes the client, the hero and they’re just there to support the hero that makes these decisions early and makes them you know, on their own terms.

 

Louise Biti 

Yeah, actually, I like that. That’s that’s good way of looking at because what we see so often, if there is no planning ahead, and nobody has really thought through the process, what happens is mumbles over breakthrough hip crisis happens. And then mum becomes a problem to solve, rather than, as you say, a hero to support. And I think that’s a big mind shift, and so much better value add, if we can start that planning early, and treat them as the hero of the story, rather than the problem to be solved.

 

Fraser Jack 

Yeah. And I feel like that might be an easier way for advisors to really take charge and control and by, you know, taking that approach rather than lucky sitting waiting for the crisis to happen.

 

Louise Biti 

Yeah, and putting your head in the sand and just thinking No, I don’t want to raise that conversation. It’s a much harder conversation when a client comes in and they’re clearly struggling. If you haven’t been preparing them for it to look at the client and go Mavis, I think perhaps you’re not going so well. How about we talk about agk today, that that’s not a great way to do it at all. Doesn’t feel very good. No

 

Fraser Jack 

fantasy net Tell us about the increase in numbers in aged care. Because obviously, as I mentioned before, we’ve got a larger population coming through than we’ve ever had before. How’s the system going to cope with it?

 

Louise Biti 

The the over age of 30 over at age group is increasing much faster than the increase in general population. So we are we know we are all living longer. And with living longer, it also means we’re recovering from illnesses that had more of an immediate death before. So we have a stroke we recover, we continue to live, we have a heart attack, we recover, we continue to live, albeit though with some frailties emerging because of that. So what there’s some very good statistics put out by the Australian Institute of Health and Welfare, which is saying if we break down retirement into those three phases of active use quiet is frailties, which should all expect will have a frailty period. And on average, that frailty period is between about 15 and 25%, of whatever we expect for retirement. So that is a massive period of retirement to leave clients completely exposed and vulnerable, not having planned for that we’ve got this increasing group of people coming through coming into that frailty period. And it is a big discussion point through the Royal Commission and the budget reforms that the government announced they’re going to start to implement around how do we make the Aged Care System sustainable and viable to be able to support those large numbers. But also, how do we make it something that clients think this is meeting my needs, and I’ve feel safe, and even though I don’t want to be there, I’m happy to access it. And I think at the moment, the government direction is all around just getting a better consumer focus on aged care to make it a safe and practical environment, looking at what the design and what services are being offered and getting the industry into a more robust situation, we need a lot, one of the issues is staff there. Even if we could give everybody who’s out there access to aged care that needs it, we don’t have the number of care workers to be supporting those people as well. So the one of the very first things is about looking at the design of aged care, the services that are provided, and where the staff are coming from and making sure those staff are suitable and adequately trained as well in that space, then they’re going to need to tackle affordability of this because at the moment, if you look at the budget, as a consumer, we are all going Yay, no increase in fees, but government’s going to fund all of the extra money that’s going into here in the next four years. That’s a 17 an extra $17 billion spend, now, that you and I know that is not sustainable in the long term. So what we suspect is that they’re really looking at making it a better robust system. And then in the next few years, they will need to address and what is fair and reasonable for us as consumers to be contributing towards the services we consume. And so those fees will likely be more expensive and more complex around just the wide variety of choices and ways that we can deal with our own frailties, and we can fund those. And I think, you know, homecare definitely a major area for us to think about. But also just how technology and innovation is going to change and drive change in that sector. But I really think it’s the people who have planned their finances to be able to afford to contribute what they need, who are going to have the best experiences.

 

Fraser Jack 

Yeah, yeah, I have the same feeling around the staging of the change that’s going to happen over the next few years. And, and we all know what’s going to happen, we’ll it sort of feels like feels like we’re coming up to the corner we really need to turn otherwise we’re gonna go off the edge of the cliff. So yeah, you know, he’s like, you mentioned getting getting the infrastructure right, and then looking at the the fee side of it. So I guess what does it mean for planners and advisors now talking to people about their retirement plans and, you know, lifetime pre retirees when it comes to actually working out what they might need in retirement?

 

Louise Biti 

I think when they’re looking at what they might need it that is a really hard question, but I think it’s about what they need from a personal point of view. What It’s important to them, what is really important that they always have in their life to be doing with quality. But, and making sure that they’ve got very strong cash flow, right throughout their life. And even in the current fee system for aged care, cash flow is the single most important component of a financial planning decision to maintain because with cash flow, we can pay for our accommodation. with cash flow, we can pay the fees we need to, but also access the extra luxuries that are going to make the difference between basic living and quality living as well. So managing a good strong cash flow and being mindful of what’s going to happen in the future. We saw one an interesting one we had this week was where families were very focused on, I think, inheritance in patients. And in this particular case, what happened is the kids transferred more than five years ago, the house from dead to one of the kids who lives with debt, and that seemed fine. But then they decided that had a whole lot of other assets that he probably didn’t need. So the kids have been distributing hundreds of 1000s of dollars over the last few years to themselves. Thinking that that meant when dad needed it, he would be able to get the age pension, and he could get into aged care at a very low cost. What they’ve now found is that dad has no assets left. But they’ve got gifting and deprivation that’s counting against him, which they had no idea that was going to count, surprise, surprise. And so Dad’s not getting any age pension, he needs to move into aged care. The room price is $400,000. Now, because of the gifting, he’s not going to get in on any of the subsidized rates. So they need to try to work out how to fund that accommodation, and all of his ongoing costs with no assets in his own name. So now they’ve faced at looking at how to give back the money they’ve taken from debt and what that means for them. So there was no planning ahead, there was no foresight, there was no understanding of what they were really doing. And probably some not quite ethical behaviors in that whole process as well. Now, that might seem like an extreme, but we see those sorts of situations every day where people haven’t understood their role as enduring powers of attorney or haven’t understood what the future might hold and how the system will work. And they haven’t planned ahead

 

Fraser Jack 

that they gifting it’s really interesting gifting story, it’s sort of I think it’s probably one that most families would go through at some point working out what how they can maximize their, their situation. But obviously, without it without advice. It’s just a absolute minefield things you sort of mentioned that we didn’t really go into was the concept of the abuse or the you know, like you said, the handing over to a power of attorney or, or just with the kids taking money in a way and just sort of spending it, I guess, or taking the cash and spending it.

 

Louise Biti 

So elder abuse is one of the hot topics of conversation in the community. And most families would say, That’s not us. But what we see is that elder abuse can take many forms, it can be physical, but it can be emotional. And it’s most commonly financial abuse. And when you look at the statistics of financial abuse the perpetrators of not that are not some random stranger. They are the kids using the enduring power of attorney or the kids using a boat emotional blackmail to parents saying, Mom, I really need this money, you know, you need to give it to me, I can’t come and visit you unless you do those sorts of conversations. Sometimes I think though, families would be surprised to hear that the actions they’re taking are actually elder abuse. They might still and we see families who will be saying we’ve got mum into care, we’ve got her the best of care, everything mum needs we’re paying for the chair so mums money she doesn’t need so we’ll start to down inheritance will start to use that now. That’s elder abuse, because kids don’t have the right to start accessing inheritance unless mum is freely and fully informed decision or dad to give that to them. So kids don’t have that right is in enduring power of attorney. And these are ethical debates that financial advisors are going need to have with kids every day? How do you invest any surplus, we need to be looking at the person who is the center of the conversation. So Mom or Dad, it’s their money, we need to invest it for their risk profile for their needs for the rest of their life. The kids can start to think about how they want to invest it once mama dad passed away, and that heritance inheritance has actually been distributed. But I think from a financial planning point of view, how do you navigate that because they are very different cop people have conversations with kids that you want to build a relationship with, and hope that they will become your ongoing client as well. So it’s about being clear. And we’ll say, you know, ask the kids who’ve got the enduring power of attorney, what do you understand your role is, and what rules you need to watch when you’re making decisions. And those rules are that it needs to be something mum or dad would do. Mum or Dad would be happy that is being done. But the key critical one is, every single transaction has to be in mum or dad’s best interest. And if you can’t show that, then you’re creating risk, not only for the older person, the risk that the kids might make bad decisions and leave them vulnerable. But you’re also creating risk for that enduring power of attorney. Because we are seeing far more legislation where a far more thorough court cases where the beneficiaries of estates are suing enduring powers of attorney for actions they’ve taken. And if there’s risks for your client, and for the enduring power of attorney, there’s most definitely risk for your advice businesses being caught up in the middle of all of that as well.

 

Fraser Jack 

Yes, exactly. So the The answer is, if you do nothing, you’re just as liable. And obviously, there’s an ethical, there’s an ethical dilemma, but there’s also a legal conversation and, and you did say, you know, what can we do about it, and I think we’d probably worth, you know, mentioning and food or going into a little bit of detail. I like them. I like the fact that you use best interest that the the kids job is to act in the best interest of the parent. But also we could throw sole purpose, I guess, into that conversation as well. And when it comes to do the decision making process talk about what what, what we all know what those things are. So it could be an easier way for us to talk to the clients about it, or the kid to the client about?

 

Louise Biti 

Yeah, I think so. And one of the things that advisors will often say as well as well, the kids are happy with it. So where’s the problem? Now, let me give you an A story, we’ll show you where problems can occur is again, we had one recently where an aged care provider has a client living in there has been there for a few years. All sudden, the kids are stopped paying the fees, because they’re saying dad has no money. So the aged care providers got hold of an advice document that a financial planner prepared for this client several years ago, they have gone to a second financial planner, and said, Do you think this first advice was inappropriate? Because dad’s got no money and can’t pay his fees. And so the second plan has come and asked us what we think about it. There’s nothing wrong with the first advice. We’ve looked at it, we said, we think the problem is the kids have sold dad’s house, taken the money themselves and spent it therein lies the problem. So if there’s any if there was any gifting or any advice in that first plan, where the advisors said it’s appropriate to do these sorts of things, or it’s appropriate to invest for yourself, it’s the aged care provider that was going to cause the problem to arise. And the aged care provider would end up referring that into the guardianship tribunal. And the adviser would have had a problem. Now in this case, the advisor was absolutely fine. The advice, not a problem or all this is just decisions the kids had decided to do on their own. But problems can arise, Arise by other people that are watching what’s happening, or disputes within families as well. So I think it’s very risky to think that you know, nothing’s going to go wrong. In these

 

Fraser Jack 

scenarios. This is really scary. So the Aged Care Provider taking legal action against whoever they can throw mud at, which will probably be the kids in this particular incident or that all the power of attorney and just you know, because they need to get their fees or they want to get their fee so they are finding legal action is an opportunity.

 

Louise Biti 

Yeah, and aged care providers will do that. If they see any signs of gifting or kids taking money from bank accounts. They will send it straight to the guardianship tribunal of the relevant state. Because they say it’s the first step towards them not getting their fees. Let’s face it, they’re already finding, finding it very financially difficult to run those businesses as well. They can’t afford to have kids spending all the money and not paying for mom or dad’s fees as well. So there’s that there is a role for advisors to play, most definitely in this space. And whether we like it or not, fussier code of ethics gives us some guidelines to remembering to look out for these things as well, you know, standard six requires us to look at giving advice, not only today, but for the rest of their client’s life. So we need to think about what’s going to change and anticipate that we need to be looking at fully informed decision making. And if it’s not with the client, then we need to treat the kids as if they were the client, not as if they were the kids looking after their own best interest as well. So there are so many clues, if you unpack that the serial code of ethics, that helps us remember how we should be navigating some of the minefields when we’ve got enduring powers of attorney and the kids, because this is going to have increasing levels of scrutiny. And as I said, we’re also seeing cases where beneficiaries coming back once a state of being wound up and suing the enduring power of attorney for misappropriating money. Now, if you were a financial adviser, having advised those enduring powers of attorney, you’re stuck in the middle of that litigation as well.

 

Fraser Jack 

Yeah, crazy. No, I also think there’s a space there, we sort of touched on it, we didn’t go into a bit of detail around the education around what financial abuse is to those related parties, and just letting everybody know, what the what the definition is, in some way, whether it’s an education piece to podcast, or, you know, something rather, provided to those people that that are surrounding us, so that everyone knows what to look out for.

 

Louise Biti 

Yeah, cuz I think kids take on the role. Yeah. Dad says, Can you be the enduring power of attorney kids sign the document, take the roles on, but nobody really helps them understand what their role is, and what’s right and what’s not. And just the subtleties of when are you stepping over that? And how do you make sure you know, it’s, it’s about every cent that mum or dad has, has to be used for their best interest? And that’s an interesting ethical dilemma that, you know, kids need the help to understand.

 

Fraser Jack 

Yeah, the more the more like you said, the more education information we can get up front that they’re better that are the easier that conversations gonna be.

 

Louise Biti 

Yeah. And I think also, you know, as financial planners and community, it’s debating that bringing up cases and going well, okay, here’s the scenario, what was appropriate, what wasn’t appropriate? How could we have had better conversations? How could we have avoided these dilemmas occurring? I think that’s going to be a very important part of building our professionalism and our ethical base going forward.

 

Fraser Jack 

We briefly touched on homecare earlier in the conversation, and I wanted to come back to that, because I think we need to sort of talk about where homecare well aware homecare has come from, where it’s where it’s is now and where it’s leading to in the future. I think it’s obviously with more and more homecare packages available. Let’s let’s talk about that, during that transition period of, you know, going from your quiet phase to frailty period.

 

Louise Biti 

So if we go back to 2014, to that set of legislative changes, at that point, there was probably a couple of 1000 homecare packages that really wasn’t a major part of aged care, except for sort of group funding things like Meals on Wheels or community nursing, home care packages was relatively new concept. But the in the community consultations at that time, pretty much every submission and everybody who contributed, said, we don’t want to live in residential care, we want to stay in our own homes. Yeah. And this generation of retirees that are coming through at the moment, the baby boomers, they are far more used to having choices in life and, and quality and luxury in lifestyles than their parents were, you know, I think about that my grandparents were more accepting of just what they had and what they could access and what was given to them than my parents who were demanding about and they’ll say I’m probably even more demanding, but you know, demanding about what we want and how we’re going to live and we want quality of life. So there is far greater demand for staying in our own homes. Now, that might be a great mission, but for a lot of people, it’s just not practical. For people who’ve got very advanced dementia, it can be hard to keep them safe and contained in the home without becoming a jailer. Residential environments might be more suitable for them. Some people with very high physical needs, again, it might be beyond the family’s ability to help them. Residential might be more important. But having said that, aged care, sorry, homecare is far more common these days. And the government has been since 2014, successively increasing the number of packages. And we saw in this last budget as well, there was a major increase in the number of homecare packages over the next two years. So we got another 80,000 homecare packages coming out. So by the time all the homecare packages that have been announced, are rolled out in two years time, we will have more homecare packages available than residential aged care places, you know, we’ll be up into about roughly around the 250,000 homecare places. So the problem is where we find all the staff. So that’s a whole other issue to be able to provide those packages. But it means there’s lots more opportunities. But it also means that people need to spend a lot more time being involved in accessing care, delivery of care, and supporting the people living in the home as well. So homecare packages might be great, but they aren’t going to necessarily work for somebody who lives alone without support around them. Because the Home Care Package doesn’t cover 20 473 165 days of care in your own home, it might provide a couple of hours as somebody’s doing the major support items you need each day. But then you need to be either be independent around that, or have financial resources to top that up with other services or to have family or a spouse or somebody else living there to support you through the rest of the day as well. So homecare, though is it’s there’s a lot of innovation in that space as well. So, homecare is going to become interesting with technology with this innovation around smart houses where we can put sensors in floors, or sensors on fridge doors, or kettles or other kitchen equipment to try to work out the patterns of how a person’s living and whether they appear to be looking after themselves and safe. There’s going to move perhaps more to different styles of community living, where we still live in our own homes. But in a more community setting, whether it’s a retirement village or other sort of community style, with home care brought in to us that we can spread the economies of that amongst a group of people rather than just one individual. The problem with homecare today has been that waiting list. So you get an approval for a home care package. But the government subsidies that come with that might take another year, or even longer to be able to access and nobody’s putting their name up for a homecare package until they absolutely need the help right there in there. So that waiting list has been a problem and that’s why the government is releasing more and more homecare packages to try to meet that particular need as well.

 

Fraser Jack 

Yeah, I I correct me if I’m wrong, but I kind of see it as the in some people will go straight to raise the but I sort of see see it as a staging area as well try and stay at home, get the home care bag, and then the Rosie is as part of the journey.

 

Louise Biti 

Yeah, it definitely is. So there is a progression. But you’re right, some people may jump straight over from independent to residential care. But for most of us, we should have a bit of a transition. And that transition might not be you know, homecare, as well as not necessarily needing somebody is going to come in and get you out of bed and get you in the shower and get you dressed and set you up for the day. It might be somebody that can come and renovate our bathrooms to be safe for older living. It might be somebody who just probably helps with meals preparation. It might be somebody who picks us up and takes us out to various community activities to keep us engaged in our communities or gets us to appointments as well. So it’s not all about that personal care. It might be about helping us stay connected to the community, being able to still protect Sipadan the activities that we’re interested in, are just making our homes a safe environment for us to stay living in. And I think that’s an interesting concept that people forget. It’s about giving us independence, as well as making sure we’re safe and supported. From a financial planning point of view. homecare is really all about cash flow. How do I fund the extra costs, because a lot of people think homecare is cheaper than residential care, I think it’s more expensive. Because we still need to maintain our home, we’re still at all in normal living expenses. And then we’ve also got some costs towards that care, as well. So we need cash flow, we need to be able to prioritize and work out how to take the best advantage of the government subsidies and the packages were given. But then what is it we’re going to value in actually accessing and paying for as well. So there is advice around navigating the system making choices. And as I said earlier, deciding what’s most important and valued to each individual, and then the cash flow, the cash flow to pay for it.

 

Fraser Jack 

It sounds like there’s a lot of information that advisors need to school themselves upon, or courses they need to take with regard to that, that home care piece, a lot of information, I guess that you can help them with that. But before we go there, I want to I you know, people that know me know that I love technology, innovation, and I let it go. And then I’m coming back to it. Let’s talk about innovation technology. You mentioned some wearables, I know that I think the latest Apple Watch even is getting into that space as well. So I think there’s a lot of large businesses, or corporations thinking that this is a this is a space where they can innovate and to talk to us about what’s what do you see there and what’s coming?

 

Louise Biti 

Yeah, there are all sorts of different trackers, which is just about tracking where a person is, and they’re great for people with dementia, who can wander, you know, if I can’t find them in their home, where are they, but also to what we’re seeing is technology around how to communicate. And if one good thing has come out of the COVID pandemic, we’ve all even our older members of the community have learned how to use zoom and how to use technology to stay connected to either our doctors or to our family and to our friends. There’s a lot more online education and activity groups, you know, you can do cooking lessons online, now you can do all sorts of things. So that sort of technology to stay connected is great that our older or older relatives have been able to use that you know, and they all know how to use qR scanners now. Set perhaps my mother but don’t tell her I said that. So those

 

Fraser Jack 

sorts of she listens to this podcast, she’s she’s gonna hear you.

 

Louise Biti 

She choices. She doesn’t like me talking about her in my workshops, but I said she just gives me so much great material to talk about as well. What we’re also seeing is that its potential with houses, as I mentioned earlier that you can smart wire the floor. And that’s about instead of having cameras watching somebody what they’re doing all day, it might be just looking for patterns of movements. And so the floors could be wired that if it can be sensed that there’s a large mass lying on the bathroom floor and it hasn’t moved for 10 minutes. unusual for to be there looks like the shape of a person. Let’s send some emergency help around. They can smart Well, one of the things that is about people being able to stay in their own home is proper nutrition, proper hydration. So I’ve heard about technology where you can smart wire the fridge door. So you can see how many times a day somebody is opening the fridge. And that might give us a measure around hydration and how often are they going to get a drink? Are they getting milk to make them themselves cups of tea? Again, for my mother, I always say that’s only gonna tell me how drunk she is because that’s where she keeps the wine. She drinks water at the tap.

 

Fraser Jack 

Good hydration.

 

Louise Biti 

Yeah, she’ll say it’s hydration. So it’s some of those sorts of things that are very interesting. Even to it might not be at our own homes, but it might be that more community living, you know, group houses where groups of people with similar sorts of care needs, can live together on what feels like a home rather than feels like an institution, but being able to access homecare packages that they combine and pull together to pay for the resources. And there are places like that that do that already. And they require you know various ways of accessing care, when we can’t stay individually in the home, but we want to recreate that environment as well. Yep. There is there is all sorts of different technology and again, in residential kids a lot of technology about how to have better communication, better awareness of what’s happening for the residents and communicating with their families to Yeah, fantastic is definitely where we need to go. Isn’t it a

 

Fraser Jack 

lot in the medical side? A lot in the connectivity side, as well. And you’re absolutely right, I think, you know, facetiming, through the, you know, meetings where you can see people and engage without having to be mobile is fantastic. Now, you did mention the concept of people living together moving, which is a relatively new, you know, concept to this. What How do you see this evolving in the future with regards to what you know, aged care might look like? Either whether their communities, they Lend Lease spaces there? How do you see this changing in the future,

 

Louise Biti 

we’re already starting to see a change. And there are some residential environments, which are instead of being big, institutional, multi storey buildings, a smaller cluster style housing, where groups of people live in houses and houses are in clusters. And that creates that home environment more. And we’re learning a bit from some of the Scandinavian models in that space as well. And there are some innovative ones here in Australia already. One of the things that was in the budget announcements this year as well, is that the government is part of its body of framework has flagged that they want to look at the accommodation framework, because we don’t really have good design principles yet for what should an aged care facility look like? What’s the design structure, if we’re trying to meet the needs, particularly for people with dementia, and that’s where a lot of the focus is going to be on what’s design for somebody with dementia. And I know there’s one up in Queensland, there’s created like a little village. So people can have the impression of walking through a street with shot to recreate, you know, community living as well as in in home living as well. So we need to look at this design framework for what is good design for different types of care needs. And how does that work as well. And I think there is a shift to some of this smaller cluster housing, rather than some of the big institutional, the problem has been that we needed to move towards those big institutional ones get the economies of scale, because there was so much overhead cost in running an aged care service. So that’s where part of the redesign in costs and funding in aged care fees will come with that shift as well. And that said, there is a group in Sydney, which has group housing for people with dementia. And I’ve been to see one of them. And it just looks like an ordinary executive home, albeit with a lot of bedrooms with, you know, up to 10 bedrooms, with en suites, where people live as if it’s a normal house with a kitchen in the middle, they can watch the meals being prepared, they can participate in that, and they will have home care packages. There is many different models, I’ve seen some down in Victoria, which they call keyhole housing, where it’s for family homes, with a physiotherapy nursing station in the middle that connects them, so that they can help the person with the disability without intruding on family life. Some of those things can be really quite interesting where we go, but there’s no set pattern that is better than another. I think sometimes it’s what suits a particular person. And it’s a community conversation that we’re going to have around that design framework.

 

Fraser Jack 

It will be really interesting, you know, in I guess the power of the fact is that if you don’t know that there they exist, you don’t know about them, and you can’t talk to clients about them. So it’s about it’s about understanding what’s available, understanding what’s coming up and what might be available, so you can have those conversations. Always How are you helping from with from an agency point of view? How do you help planners,

 

Louise Biti 

so we, we are there to help planners be business ready? And then to be able to give the advice? So I think there’s the two aspects of it. So being business ready, the very the first step we recommend is do our accreditation training. So you can do a two day face to face one if we can keep borders open that we’re starting to go back into some face to face workshops, but we’re also doing them online. So for advisors Don’t want to travel, we can break them down to being online. All live all interactive still get to interrogate me and ask me all the questions that you want to learn about as well to be trained. Within that we talk a lot about picking your business model. So thinking about what your business model wants to be, so we can help you with the getting business ready. So help you with that training, we can help you with thinking about your pricing model, your service proposition. And then what we can do is move into we have two subscription services. One which gives you access to our Central’s membership gives you access, then to all the tools that you need to start the conversation with clients be able to educate your clients, be able to market your business, create profile, do quick calculations, keep your knowledge up to date, find answers to questions. So it’s an online portal with lots and lots of tools. But it’s not just rules, they’re very practical tools that advisors can use on a day to day basis for all of their business activities. And then we’ve also got support when you’re developing that advice solution. So we can either help or mentor you by we could be the personal advisor, if that’s something you either need help to be mentored to learn, or you want to be in control of the situation to the client, but not actually give the advice, we could do that. We could be the paraplanner for you. So we do paraplanning only in aged care advice. But we could do paraplanning. Or we could license you to use the software which we built, which has been purpose built to be as simple and flexible and quick to use as possible. So that you can then produce your own advice documents. And again, we think that’s a progression. We’re not a financial planning business, per se, but we have got a personal advice license so we can help planners build their business, or connect them to somebody else’s a specialist, we can be the paraplanner we can give you the software so you can do the whole advice process in house as well. So it’s about getting advisors, business ready, giving them all the tools they need to have the conversations to promote their business, and to give good quality and flexible advice to clients.

 

Fraser Jack 

Fantastic. And how can people reach out to you if they want to continue the conversation,

 

Louise Biti 

they can go to our website, which is aged care steps.com.au they could also phone our team on our helpline which is one 300 double 26816 or send us an email at info at aged care steps.com.au or even if they just want to stay connected and not really just watch what they’re doing. Go on to LinkedIn and look for aged care steps and follow our page or go onto our website and ask for our newsletter to be sent to you as well. Wonderful Thank

 

Fraser Jack 

you The ways for coming on and chatting today. I love I love the idea of advisors taking their clients are making their clients the hero of their of their aged care journey and helping them get more giving them back and making sure they maintain control of all the decisions that need to be made. Really appreciate it. Thank you for coming on. Thanks again. My pleasure. Thanks Fraser. Well there you have it another episode over the x y advisor podcast. I’m Fraser Jack and I’m joined by Emily Blanche Kelly. Hey Fraser, how you doing? I’m tremendous. Thank you for asking and cause we come to a time of the week where we get to champion some amazing x y advisors.

 

 

Yes, let’s do it. So today’s shout out I would love to give to x by member Rosina saw now Xena I hope I pronounced your name correctly, so please let me know if that’s incorrect. But Cena has been an absolute champion. She’s been the MVP on the platform. She is constantly in there answering advisors questions, being really helpful being super collaborative. I can tell just from the stories that she shared and her contributions that she has a wealth of knowledge she has been in the industry for 20 or 30 years. And she’s very generous with sharing that knowledge so Rosina, it doesn’t go unnoticed. Thanks for being a total champion on the x y platform.

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