Regardless of your advisory role, you are entrusted with guiding clients through various life stages, including the planning for potential Long-Term Care (LTC) needs.  Even though many insurance-based options are available to cover LTC, too many in the advisory community fail to recommend them or allow clients to maintain the default position of self-funding those future LTC expenses.  As such, consumer surveys conducted in 2023 highlight the enormity of the problem, as OneAmerica and Nationwide Financial indicate less than 20% of American adults own an insurance-based plan for LTC.  Based on that data and its trajectory, the other 80%+ self-funding their LTC carry the significant risk of needing care. 

However, from the advisory perspective, that massive demographic (The Silver Tsunami) is targeting advisors and their practices and making the following strategies and best practices impossible to ignore……

Client Engagement and Education:   Clients without a formal LTC plan need engagement and education more than ever. They will rely on you to provide comprehensive guidance on navigating the complexities of finding and funding their care needs. That role will also require proactive communication and an understanding of the care resources and options available in every location where your clients reside.

"Claims Processing" and Administrative Resource Allocation:   You should plan to allocate sufficient time and resources to assist clients as their de facto "claims processor" with administrative tasks related to self-funded LTC needs.  That role may include guiding clients through complex paperwork and the documentation required to effectively access, manage, qualify, or pay for their care.

Specialized Knowledge and Training:   With so many clients self-funding LTC, you will need specialized knowledge and expertise, and staying current on the latest developments in the delivery, management, and funding of LTC services may involve pursuing certifications or collaborating with specialists in the field.

Collaboration with Other Professionals:   Clients who employ a self-funding strategy for LTC will necessitate collaboration with other professionals, such as attorneys, accountants, care providers, and placement specialists.  Where you once were singularly concerned about delivering results based on your core competency, you should anticipate building and maintaining relationships with these professionals to provide the holistic support your clients will need.

Adapting Revenue Streams:   The large number of clients self-funding LTC may impact your revenue streams, so you should consider creating a more flexible fee structure…..especially if your comp is based on a client's (shrinking) Assets Under Management. Your fee structures and service offerings may need to adapt to meet your client's evolving needs while maintaining your practice's sustainability.

Ethical Decision-Making:   Ethical considerations are central to advising clients who are self-funded LTC, and you should navigate these discussions with sensitivity and integrity.  You've allowed them to make the self-funding choice, which means prioritizing your clients' interests and ensuring you're prepared to clearly explain how to maintain their care preferences or their senior living options.

Compliance and Regulatory Considerations:  Compliance with laws, regulations, and taxation governing LTC expenses will be paramount. Staying informed about legislation and regulatory requirements changes will ensure you provide compliant advice and recommendations to clients.

The advisory community's tacit approval for client self-funding Long-Term Care presents significant challenges.  Only by staying informed, adapting your practices, and prioritizing your clients' needs can you effectively navigate this evolving landscape and continue to provide invaluable support and guidance to those you serve.

Now is the time to encourage clients to begin the Long-Term Care Planning process....

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