The Association of British Insurers has rejected claims that local councils are blocking referrals of long-term care self-funders to financial advisers, but has admitted that there is “a lot of work” to do.
Speaking to FTAdviser, Yvonne Braun, head of savings, retirement and social care at the ABI, said some authorities do refer clients to intermediaries accredited by the Society of Later Life Advisers advisers, but she said the area is “a continuing dialogue”.
She added that councils will “always have concerns about liability”, but that “different models have been shown to work” and that the industry needs to build “a greater relationship of trust with local authorities”.
Kay Ingram, divisional director of individual savings and investments at national firm LEBC Group, told FTAdviser last week that councils are blocking advice referrals due to past mis-selling cases.
Speaking following an ABI meeting attended by a number of local authorities as well as adviser firms and providers, Ms Ingram said local authorities “seemed wary” of referring those that need long-term care to financial advisers “due to mis-selling scandals of the past”.
She added that councils had spoken out against plans, rejected by the government in its Long-Term Care Bill, to demand self-funders are referred to regulated advice.
Ms Braun said: “For local authorities there are economic benefits from referring people to financial advice.
“A quarter of self-funders fall back on the state which costs £500m a year – and those people would have benefited from financial advice but only about 7 per cent have taken financial advice and that’s what we want to deal with.
“Local authorities will always have concerns about liability and they need to see what processes can be developed. What actually works and won’t work will differ per local authority and this should be done at a local level.”
In July, the government rejected an amendment to the care bill that would have forced local authorities to refer people in need of long-term care to regulated financial advisers. Instead of being required to refer to regulated advice, councils need only refer people to advice that is independent of the local authority, which would include charities and other organisations.
Just Retirement and Partnership are both pushing for advice from ‘regulated’ financial advisers to be part of the care bill.
While the ABI says it supports the need to refer self-funding individuals to regulated advisers, it emphasised that not everyone needs regulated advice as it depends on wealth, amongst other things. Any advice given needs to “maximise the benefits you have”, Ms Braun added.
She said: “Currently, people with assets less than £23,250 can receive financial support from their local authority and the majority of people in residential care receive some support (which may increase once the asset threshold rises under new rules). We expect that generic financial information and guidance would be the starting point for most people.”
