Talking Long-Term Care Doesn’t Have to Be Tough
For advisors who find long-term care conversations daunting, what’s the best way to discuss planning for – and financing – life with a debilitating illness?
By some accounts, wealthy clients are missing out on critical advice. Just 8% of high net worth investors have received advice on how to manage future healthcare costs, according to a recent survey by UBS.
Ed Nasief, managing director at UBS Financial Services Wealth Management, says the cost of healthcare and long-term care are the biggest concerns for baby boomers because they don’t know how to plan for them: “clients are looking for a solution” before it's needed.
However, industry observers say some advisors struggle with the topic of long-term care because starting a conversation about Alzheimer’s Disease or dementia makes them uncomfortable.
“It’s important not to make the conversation [just] about dementia or Alzheimer’s,” says Elizabeth Loewy, former chief of the elder abuse unit in the New York County District Attorney’s office, because clients may need long-term care for a variety of different illnesses or an unexpected accident.
“The more you talk about it, the easier it gets,” says Kevin Reardon of the Pewaukee, Wisc.-based firm Shakespeare Wealth Management, which manages $130 million in assets.
Reardon initiates the conversation by asking clients an open-ended question: “Do you know anybody who has suffered with a long-term illness?”
Most of the time the answer is yes, and his clients end up sharing personal stories about a relative, friend, or neighbor diagnosed with Alzheimer’s or dementia, or recovering from a stroke.
The open-ended question strategy is far easier for financial advisors than other ways of broaching the subject, like quoting streams of statistics on incurable illnesses, says Loewy, who also trains financial advisors on how to have the tough conversations about LTC.
When speaking to clients, Loewy says advisors can ease into the topic of LTC by asking clients to fill out an emergency contact list and to include trusted family members who can take care of things if a crisis were to arise.
She says such a conversation opens the door to speak about the client’s plans for dealing with LTC issues. Addressing the emergency contact list can also lead into the discussion of who will act as power of attorney if the client were to become incapacitated.
Another question for financial advisors is what age to initiate LTC conversations with clients.
Barbara Fitzgerald, an elder law attorney at Cramer, Swetz, McManus & Jordan, says if advisors are having the LTC discussion when their clients are 60 or older, it’s too late.
One of Fitzgerald’s clients kept putting off LTC plans because she thought she was too young. The client later suffered a massive stroke in her early 50s and now needs long-term care for the rest of her life.
Fitzgerald says financial advisors should have LTC conversations with clients as early as their 20s: “That’s when we need to let clients know what their options are.”
Harley Gordon, elder law attorney and president of The Corporation for Long-Term Care Certification disagrees, observing that the chances of younger adults needing LTC are very unlikely. “These individuals have limited resources and wouldn’t be able to afford the premiums,” he says, so it’s unlikely they would be responsive to a conversation about LTC.
Instead, Gordon suggests financial advisors start the conversation with clients in their mid-50s because they start to see friends and associates diagnosed with chronic illnesses.
“Prior experience is a strong motivator for people to consider LTC planning,” he says.
After getting over the hurdle of how to start a conversation about LTC, Gordon says it’s up to advisors to take a proactive approach and “start by laying out the consequences.”