Policy-makers are debating whether to introduce an industry-funded initial financial advice consultation for people who incur long-term care costs.
During a parliamentary seminar on the Care Bill last week, MPs said they are considering asking the financial services industry to fund a no obligation, free initial consultation with care funders in a bid to allay fears over advice fees.
The bill, published last month and currently being debated in the House of Lords, sets out a requirement for local authorities to signpost care funders to “independent” financial advice but stops short of requiring the advice to be regulated.
Other sources of independent advice can include charities such as the Citizens Advice Bureau and AgeUK or the Money Advice Service.
It is understood the Department of Health is concerned people funding long-term care could be referred to IFAs and incur costs when it is not appropriate.
Society of Later Life Advisers joint chair Tish Hanifan says: “An initial free consultation would be a very good idea. It would smooth the way to for the Care bill to refer directly to regulated financial advisers.
“It could be an initial support by the industry to allow everyone access to time-limited advice to find out if they need more help. We have to change the mindset of going to financial advisers.”
Last month, Money Marketing revealed cross-bench peer Baroness Sally Greengross planned to table an amendment to the bill to force local authorities to explicitly refer people to regulated financial advice.
Her amendment, which has now been lodged, states: “A local authority must only offer a financial product to pay for care to people who have received regulated financial advice or are customers who have opted out of taking regulated financial advice.”
International Longevity Centre chief executive Greengross has also tabled amendments calling for care funders to be referred to regulated advisers for all areas of financial services, including equity release.
Solla president and Labour peer Lord David Lipsey has also tabled an amendment to make it clear people should be signposted, rather than refered, to regulated financial advice.
Strategic Society Centre director James Lloyd says it would be costly and inefficient to refer all care funders to regulated advisers.
He says: “Perhaps there is an intermediary stage for local authority financial assessors or charities to review people’s financial position and only refer on to regulated advice those who have an incentive to buy immediate needs annuity.
The bill sets out Government plans to cap care costs at £72,000 from April 2016. The advice amendments are set to be debated in the House of Lords during committee stage on 4 July for up to three days.