Too few clients truly understand the costs of aging in place, says an expert.Obencem/iStockPhoto / Getty Images
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David Christianson, senior wealth advisor and portfolio manager with Christianson Wealth Advisors at National Bank Financial Wealth Management in Winnipeg, has noticed a real shift in conversations with his baby boomer clients in the past decade. While these clients once revelled in discussions about rock-and-roll music gatherings, today’s chats mainly focus on health care and eldercare issues, which he now calls the largest growing area of his practice.
With the average boomer now around age 68, thinking about issues around aging is hardly a surprise but advisors need to up their knowledge and contacts to help clients navigate this inevitable transition better.
“You need to develop expertise around [eldercare] by preparing a list of contacts, sources, where they can seek help,” he says. “If you call yourself an advisor, you should be helping.”
Mr. Christianson got a head start on eldercare issues years ago when he assisted clients with making plans for their aging parents. Now, the clients themselves are older, so he’s helping them directly by pointing them to senior communities or specific eldercare professionals.
He likes to engage clients with many open-ended questions such as, “What are the issues you see moving forward in your life?” Over the course of a year, he says eldercare comes up evenly from either himself or the client.
Analyzing what they can afford
Kurt Rosentreter, certified financial planner and portfolio manager at Manulife Securities Inc. in Toronto, quarterbacks multilayered conversations regularly on where clients see themselves as they age and what they can afford – private long-term care or aging at home. He also looks into any tax breaks that may benefit specific types of care, such as the disability tax credit or the caregivers’ amount. Finally, he helps clients price out the cost of care, examining income sources and, sometimes helping to evaluate care facilities and home care.
“I have found most of their preference is to stay in their home as long as they can, and they want to live in a city where they know it’s easier to hire care,” Mr. Rosentreter says.
“The deaths we’ve seen at long-term care facilities during the pandemic have only escalated the desire for people to stay home. Most clients in my practice don’t want to go anywhere unless they truly feel they can either no longer manage on their own or they get pressured by the kids.”
He says the cost estimates are usually calculated by the family or client themselves if they’re still able to do so. While Mr. Rosentreter doesn’t usually participate in investigating home and facility options, he says he’s the one they send information to and then he analyzes what they can afford and how they can structure the income to pay for it all.
Karen Henderson, founder and chief executive officer of Long Term Care Planning Network in Toronto, says too few clients truly understand the costs of aging in place. She notes that while people are living longer, that doesn’t necessarily translate into better health outcomes.
“Worldwide research is telling us that many people are living longer but in poorer health close to the end of their lives,” she says. “We have a perfect storm because you have [Ontario] hospitals now wanting to charge people hundreds [of dollars] a day to stay. Maybe you’re in a house or a situation where it’s not suitable, but where do you go [instead]?”
Observe cognitive and physical changes in clients
Ms. Henderson recently gave a webinar for 200 clients of an advisor, and many didn’t have a clue about the work and financial investment required to age in their place of residence properly.
“The home they live in might have dangerous stairs,” she says. “There are just so many things that people don’t think about and they think they’re going to be able to stay there, be safe and independent with no changes to the home environment.”
Recommended adjustments, although expensive, may include revising a home’s main floor to include a bedroom, bathroom and laundry facilities, which Ms. Henderson says will make aging in place possible for the longer term.
Advisors also need to be more observant of cognitive and physical changes in their clients. She cites the example of a client coming to an appointment with a cane, and then six months later, with a walker. A holistic approach may be to talk to the client, learn more about their living situation, and offer suggestions to help keep them safe.
She acknowledges it’s often the adult children who observe their frail parents and want to take action before there’s a bad fall or stroke that limits the options available.
“So, advisors need to work on building and maintaining their network of professionals continually,” she says. “An advisor looks like a hero if they can say to a client, ‘I know that you’re having a problem where you live, let me hook you up with someone so you can have a conversation with them.’”
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