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IFAs could save councils £1bn a year

Horlick: Help for self-funders

Local authorities could save over £1bn a year if they used IFAs to advise them on funding for long-term care, says Partnership.

Managing director of care Chris Horlick says local authorities are paying over £1bn a year for people who fund care for themselves but end up falling back on the state when they can no longer afford care costs. He says financial advice could help self-funders to plan their finances so that they do not run out of money and need state help.

Horlick’s call comes after the Audit Commission last week warned that if care costs rise in line with the ageing population, they will double by 2026. It urged councils to develop strategies to deal with the cost.

Horlick says: “If they all had properly qualified financial advice at the outset, they could cut that by a significant proportion. Local authorities have a duty to inform, signpost and advise self-funders as well as state-funded people when they are going into care. If they exercised that duty properly, it would end up saving them money. Why don’t they set up panels of appropriately qualified IFAs to refer all self-funders to?”

Horlick has presented his findings to the health select committee and in his response to the Government’s green paper into a new care and support system. He says Partnership is working with 15 to 20 county councils and a number of London boroughs to help identify the need for care fees advice.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. I have been dealing with the Finance Dept of Glasgow City Council over long term care issues for my husband overr the last years. Please please please could someone tell me how they get into their jobs in the first place and perhaps insist they sit some Financial exams prior to their appointment. I have been running rings round them and they still don’t understand basic information!!!!!!!!!!!

  2. A good idea but from my experience you may find the various departments i.e Social work, housing departments and the Councelors at odds with themselves as they all have different priorities and self interest in what takes place within the council.

  3. At last an IFA is possibly being treated as a Professional and not labelled as a ‘Commission Hungry Salesman’.

    If this issue is properly handled and any IFA involved was fee based or could offer a fee based arrangement, ideally any fees paid by the Council in question, simular to a Solicitor being paid by Legal Aid for example, this could prove to be a good use of public money because with careful planning, the IFA could help the client to pay their own fees and as such, save the cost to the local Council.

    Please local MP’s explore this issue and start earning your expenses.

  4. If you are going to try to deal with the public sector, good luck to you, and be prepared to go bankrupt. Unfortunately it is staffed by nimbys who dont care whether the job gets done as they are paid a salary if they do lots of work or none at all. unfortunately they are not performance related paid ether. If decisions have to be made it has to go to a meeting then an AGM then a further meeting to discuss the findings of the first two meetings!The most annoying fact above this, is the actual reluctance of the staff to actually make decision’s and accept that a member of the private sector can actually help them. Much training with the public sector staff would have to be done if this would ever get a chance of getting off the ground. The biggest problem would be to break down the barriers and the lack of understanding of what IFAs could do. But who’s prepared to waste their time doing that, and more importantly fund it?

  5. At last a sensible approach but will logic prevail? Not before a lot of IFAs have been seen off by the rececession and lifetimes of training and experience wasted, with yet more of the public purse spent inefficiently by government bodies. The fact that we should eventually be paid for our time will seem so unsavoury to all of those in their ivory towers

  6. And what is wrong with earning commission on this (or any other matter)? The public has absolutely no difficulty at all with a bank doing it, or a direct salesman employed by the product provider.

    The so-called consumer lobby doesn’t have a difficulty with it either, unless it’s the IFA earning in that way. That’s illogical and unsupportable.

    IFAs have not stood their ground either. For most consumers commission is the best way, so why is our industry further damaging itself with this stupid idea of fees?

  7. Chris Horlick is quite right to highlight the need for good qualityfinancial advice in this area
    Care funding is an area where the right advice , given at the right time [ie before all their money has run out] can make a real difference.
    It has taken the Local Authorities a long time to even begin to recognise the value of good financial advice at the time a person has their care needs assessed by the local authority. If self funders are left to their own devices it is a matter of chance if they get access to good advice or not.
    Without this they may well run out of money and ultimately need to be local authority funded ;a position Local Authorities are increasingly keen to avoid !
    The current economic climate has certainly begun to have the effect of making the public sector look again at what the private sector can offer in terms of financial advice.
    Historically Local Authorities have also been reluctant to recommend any particular firm and this has been a barrier to good collaborative arrangements. The Society of Later Life Advisers [SOLLA]has made good progress in this regard as it identifies a range of accredited later life advisers which gives the local authority more confidence when making a recommendation.
    In this respect financial advisers can indeed therefore help local authorities to achieve savings in their budgets.
    Most importantly this kind of advice will help the person who needs it most – the elderly person themselves.

  8. Unfortunately the motivation for Mr Horlick’s comment is likely to be seen as the desire to sell more of Partnership’s Care Plans (&very competitive they are) & a brilliant product it is for the right person.

    However, there is so much that can often be done for a resident without recourse to a regulated product. But nobody wants to pay & as soon as you’ve given ‘advice’ there is little chance of getting a fee.

    The Care System is designed to confuse. From my experience (which is not insignificant) Social Services Departments have only one thought – Do you have a house? They then know that they can probably cover the major part of a resident’s care from that.

    From that point on the Resident (& family) are largely on their own.

    Social Workers, in general, have little or no knowledge of the funding system over and above the very basics. Neither have they any real incentive to advise the family on how best to preserve the family wealth. All the majority appear concerned about is that it is not their problem if the Resident is self funding.

    However, equally as short sighted are the families who will not ask or take advice as soon as the potential need for care arises.

    So much could be done to advise re wills, LPAs, splitting assets, claiming benefits (especially for a non resident husband or wife) to ensure that they claim their entitlement and thereby minimise the effect of care on the family. Thousands can be saved for the resident.

    However, the public in general will not PAY for advice. If they seek advice at all, they become reliant on those who eventually MUST, sooner or later, sell a product whether they are open about this or hide behind a quasi-charitable front.

    An example:

    I have recently met with a lady who has, in little more than two years, run joint assets down from £150,000 to £50,000 to pay for her husband’s care. By splitting the assets, she could & should have HALVED the amount it has cost her (them).

    The savings are still in joint names so she will have to get down to £28,000 before the tariff income stops.

    She continues to have mirror wills.So if she dies the husband gets the house.

    She hasn’t taken claimed Pension Credit on her own account.

    She hasn’t taken a funeral plan to avoid paying for the funeral out of the £14,000 that may be left by her husband.

    How do I get paid for sorting out this mess?

    Unfortunately the only way the vast majority of the public will pay for advice is through a product.

    Yours – A commission Hungry IFA

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