Advisers have been told they must check all funding options available when advising clients on long-term care.
It comes as several advice companies face litigation after failing to consider the fully-funded NHS continuing healthcare option that clients with care needs could benefit from.
Kelly Greig, partner and head of later life planning at Irwin Mitchell Private Wealth, said many advisers were failing to consider this.
She told FTAdviser that she has seen several cases where an adviser sold a care annuity to their client despite other funding options, such as NHS continuing healthcare, being available.
Ms Greig said: “The problem for financial advisers is that if they do not understand how NHS continuing healthcare is awarded, or who might get it, it is difficult to give accurate advice on financial planning.
“In my opinion, it is negligent to sell a care annuity or enter into an equity release scheme to fund care if NHS continuing health care would be available.”
Individuals who qualify for NHS continuing healthcare will have all their care paid for by the NHS, regardless of their own financial means.
Not everyone qualifies for this funding but according to recent government figures, 22 per cent of those referred to NHS continuing healthcare were assessed as eligible in 2018-19.
Eligibility is based on a checklist of the person's needs with regards to things like nutrition, mobility, and psychological and emotional needs, and their severity.
Jacqueline Berry, director of My Care Consultant, said: “Unless a client has a specialist care adviser who advises on this area regularly, other advisers may miss things.”
However, if advisers don’t get this right there is a risk that the beneficiaries of the estate could end up bringing a claim, she said.
Ms Berry said she was aware of a few firms that were subject to litigation in this area.
She said: “It is absolutely the role of the adviser to point out all the benefits available, this includes local authority benefits as well as the NHS funding side.”
Elliot Daniels, financial adviser at Utopia Financial Planning, said: “I don’t think it’s a case of being easy or hard to advise clients on care but there’s definitely a lot of factors that advisers should be taking into account when advising in this area."
amy.austin@ft.com
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