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Independent financial advice resource directory

Introduction

The Care Act 2014 ("the act") enacts some significant changes to the role of local authorities in providing advice and information for local people when arranging adult social care.

One of those significant changes can be found in section 4 of the act and the requirement that local authorities must help people to benefit from independent financial advice, so that they can get support to plan and prepare for the future costs of care.

Local authorities are required to provide comprehensive information and advice about care and support services in their local area. This will help people to understand how care and support services work locally, the care and funding options available, and how people can access care and support services.

The act clearly sets out the general requirements for what information and advice must be provided to local people and how they can find independent financial advice about care and support and help them to access it.

We have produced an Independent Financial Advice Resource Directory to support people to access independent financial advice.

The Care Act guidance states that local authorities are not required to make a direct referral to a single Independent Financial Adviser (IFA) but should instead direct a person to a choice of advisors, regulated by the Financial Conduct Authority (FCA) with the appropriate qualifications and accreditation.

Directing the person to a choice of advisors means that it is ultimately down to the person, or their representative to choose who they may seek advice from.

The local authority will however support people to make that decision by providing information and advice about the benefits of seeking independent financial information and advice, the range of services on offer (from free, generic sources through to regulated advice) and making clear that some services may charge.

For example, many people move to a care home because they and their family do not realise that continuing to live independently in their own home with suitable care and support is a realistic alternative. If you are funding your own care, you may not be aware of all the available options. It may seem simplest to pay care fees from savings, income or selling your home, but this may not be the best solution.

Therefore, if you need any assistance or further clarification on this information sheet, or need help in accessing a specialist financial advisor, you can contact our Contact Cares Team on 01744 676767 or alternatively via email at contactcares@sthelens.gov.uk

Who can benefit from independent financial advice?

People who may benefit from the independent financial advice include:

  • those who might need a small amount of additional income to fund care at home, or capital for adaptations/extensions to their home.
  • people with an immediate need for long-term residential or nursing home care.
  • those who are already resident in a care home and paying for their care from their income and savings.
  • existing or potential residents who want to make sure that their savings, investments, and other assets pass to their family and/or other beneficiaries; and
  • people acting as an 'attorney' and looking after the financial affairs of someone in any of the above circumstances.

Different types of investment advisors

If you are getting advice about investing your money, you need to know there are two different types of financial advisors - 'independent' and 'restricted' - and this can affect the advice you are given.

Some advisors can offer the full range of financial products and providers available and are called independent advisors. But many advisors have chosen to offer 'restricted advice' and will focus on a limited selection of products and/or providers.

For more information, please visit the Financial Conduct Authority website.

Who are independent financial advisors?

They are independent of the local authority.

Independent financial advisors will assess your financial circumstances and explain the options available to pay for your care and support to make sure that you:

  • fund care fees in the most cost and tax efficient way.
  • receive information and advice to make an informed decision about renting or selling your home.
  • can pay the fees of your preferred residential care home or care at home, now and in the future - allowing for inflation; and
  • receive the benefits and payments to which you are entitled.

Independent financial advisors will provide advice on the best options for your individual needs. These may include:

  • financial assistance to enable you to continue living independently in your own home.
  • how to release extra income from existing savings/investments.
  • releasing equity from the value of your home to directly fund the cost of care at home, adaptations/extension or purchase an Immediate Needs Annuity (provides a guaranteed regular income to cover the cost of your care).
  • estate planning and its implications on care fees planning.
  • renting out your property (rental income could contribute towards the cost of care).
  • investment - many different types of accounts and investments may be suitable to provide a return to help pay for care; and
  • legal, tax and benefit issues - getting advice about your rights and entitlements is crucial when planning for later life and choosing the best way to pay for care and support.

Things to consider

When considering future care, it is important to find a well-qualified independent financial adviser, somebody who you feel you can rely upon to understand the plans you need to make and the complexities of the many decisions you may need to face when looking at funding your future care services.

Financial advice should take you to the stage where you can make clear and informed decisions in the knowledge that you have all the information and choices you need to reach those decisions.

Independent financial advisors charge for their time and advice; however many will offer a free one-hour initial consultation. When you contact an advisor, make sure you understand what you will be expected to pay. There are three main ways of paying for advice:

a) Fees - you pay the adviser a fee, either at an hourly rate or a set fee.

b) Commission - you pay the adviser indirectly. The product provider pays them a commission for the product that you buy. This money is then deducted by the product provider from the amount of money they pay you from the product(s) you purchase. All commission must be disclosed by advisers.

c) Fees and commission - by paying a combination of fees and commission.

Not all advisers offer all three payment options. Make sure the adviser offers the payment option that you want and that you compare the cost of different

When choosing an independent financial advisor, check:

  • That they have experience of providing advice on long-term care funding
  • That they hold the specialist CF8 qualification (this is required by the Financial Services Authority for any financial adviser giving financial advice about long-term care).
  • How independent the advice is. You need the adviser to act in your best interests, not in the interests of people who want to sell you their products.

Other types of 'advice'

If you are only given general information about one or more investment products, or have products or related terms explained to you, you may have received 'guidance' rather than 'advice'. This is sometimes also called an 'information only' or 'non-advice' service.

The main difference between guidance and advice is that you decide which product to buy without having one or more recommended to you.

The Society of Later Life Advisers (SOLLA)

The Society of Later Life Advisers is a not-for-profit organisation to meet the need of consumers, advisors and those who provide financial products and services to the later life market.

SOLLA helps people to find independent financial advisors who specialise in the financial needs of older people. Members have taken steps to become independently accredited to offer the added reassurance that as well as holding professional qualifications, they can offer the practical guidance needed to make the right decisions at the right time.

SOLLA can be contacted through their website at www.societyoflaterlifeadvisers.co.uk or on 0333 2020 454.

Other useful links

Paying for Care

The Saga Care Funding Advice Service

My Care My Home

Carehome.co.uk