The Care Conversation Financial Planners Are Missing with Stephanie Leung of KareHero

Care costs up to £100,000 a year. 1 in 4 people in the UK sell their home to pay for it. And most financial planners are having the conversation far too late.

Click here for the KareHero Website 

In this episode, Sam sits down with Stephanie Leung, founder and CEO of KareHero, a UK-based service helping families navigate the care system and access funding they did not know existed. Stephanie has been a carer since the age of 14. She left a C-suite career at Uber managing 20 countries across Europe, and built KareHero after her father became seriously ill during Covid. She knows this world from both sides, and she pulls no punches.

If you have clients approaching later life, this is not a niche topic. 1 in 5 people in the UK are currently caring for someone. By age 50, there is a 50% chance your client is either a carer or being cared for. This is already your clients' reality. The question is whether you are ready for it.

What we cover in this episode:

• Why care can cost up to £100,000 a year and why 1 in 4 families sell  their home to fund it
• The three types of care funding available and who qualifies for each
• Why the care conversation should happen at the IHT planning stage, not in a crisis
• How power of attorney works, what happens without it, and why it takes 8 to 10 weeks to process
• What reverse parenting is and the emotional reality of caring for a parent with dementia
• How KareHero has accessed £12.3 million in funding for families told there was nothing available
• The role financial planners can play in signposting clients before care becomes a crisis
• Why this conversation is the key to building relationships with the next generation of clients

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Transcript

Care Enters The Money Conversation

SPEAKER_01 0:04

And today on the Financial Planet Life podcast, we have a conversation about care. That's long-term care for your clients. Stephanie Lung from Care Hero has a very personal journey of looking after her father, which inspired her to set up Care Hero as a positive impact business. She helps people from all walks of life access care and understand what later life support needs to look like, especially if you aren't able to access it. Now, if you're a financial planner, you must listen to this episode. So, Stephanie, thank you so much for joining me today on the Financial Planner Life Podcast. How are you?

SPEAKER_00 0:44

I'm great. Thank you for inviting me, Sam.

SPEAKER_01 0:46

For those that don't know you, can you introduce yourself and Care Hero?

SPEAKER_00 0:49

Yes. Um, so I'm Stephanie Lung. I'm the founder and CEO of Care Hero. Um, I started this business maybe three and a half, four years ago. Um, and we are there to help every family who's going through an adult care situation or journey in their life in the UK.

SPEAKER_01 1:03

Okay. Now you're on the Financial Planner Live podcast. Why should financial planners care about that?

SPEAKER_00 1:07

Because care is by far one of the most expensive decisions you're ever going to have to make. Um, and one in four people in this country now uh sell their house to pay for care.

SPEAKER_01 1:17

Wow. Okay. One in four people selling their house to pay for care.

SPEAKER_00 1:20

Yes.

SPEAKER_01 1:21

Tell us a little bit about care then. Tell us what's going on in the world and why you're so passionate about it.

SPEAKER_00 1:26

Uh yes. Well, I mean, there's a personal journey to it and a professional journey as well. I'll start with the professional. So uh about one in five people now in the country are caring for someone. Um, and the FCA has said very clearly uh by the time you get to age 50, um, 50% of you, um, you're either you have half a chance basically of either being a carer or being cared for. Um and care in this country is interesting. We're all living longer, but we're spending much longer uh being sick. So we get sicker earlier, but we live longer. People are spending about 13 to 15 years on average in chronic health conditions. Um, and because of the backlog in the NHS, it means that families uh where you may have had an adult in your family who started out with a small illness has now become a long-term chronic illness or even a terminal illness. And in order to get care, you need to access that care. And that care can either come from local authorities or the NHS, or you have to pay for it yourself. Um, and with a burgeoning aging population, less and less people qualify to get all like full support from the government. So you're ending up having to pay for yourself. Um, and care can cost you somewhere up to about 100,000 pounds a year.

SPEAKER_01 2:34

Okay. So, personal experience then. You

Stephanie’s Story Behind Care Hero

SPEAKER_01 2:38

yourself have been on a journey of being a carer.

SPEAKER_00 2:40

Yeah, so I I often reflect on this. When I first started this business, it had nothing to do with the finances at all. Um, so a bit of a background. I've been a carer since the age of 14. I'm last of three children. Um uh care is very much built into our culture. So, you know, from the day you're born into an Asian family, if you don't look after your elders, your ancestors will curse you, you know, as long as you live. Um, and as the last daughter of many, um, it was very much expected from a very young age that if your parents ever get sick, then you're the one who steps in. Um, so from a very, very young age, both my sisters were much older than me. They left home. Um, and every time my parents uh were getting sick or coming in and out of hospital, I started out as an, you know, as their translator and then looking after all their medical documents, taking them in and out of hospital when I started knowing how to drive. Um, and then eventually, even as I um, you know, as I developed my own career, I actually started out um in trading at Goldman Sachs. That was my first job. Um, or I went to the States to study, or I'd end up in Tokyo, um, you know, working on this Tokyo stock exchange. Every time something happened, I would have to fly back to the UK to try and sort stuff out for my parents. So I've been a carer my entire professional life. Um, and then um more recently, uh during COVID, my dad became quite poorly and got stuck in hospital. And I basically went through a uh, you know, you can call it a midlife crisis, but I'd call it a uh career introspection moment. Um, and I said to myself, this thing has been plaguing me my whole life. Um, and now it's getting to the point where I really need to think about what to do. And I so I basically gave up my corporate career and decided to do this. Um, I turned down lots of very attractive roles. I was already I'd already been in C-suite for about 10 years. Um, and I was part of the leadership team at Uber. I managed, um, I managed 20 countries in Europe. I started on the UK lead leadership team, uh, the board. Um, and I just said, it doesn't matter what job you have, every time your family member gets sick, you drop everything anyway. Um and I've had to quit my career several times because of it. So it just felt like, you know, I the best way to get through something you're afraid of is to go through it, uh, to get to the other side. So I started Care Hero Um, you know, ostensibly to help any family going through a care situation. You get that get stuck in hospital, they can't figure out their funding, they don't know what care setup they need, you need good advice in a timely manner. Um, and I just realized after listening to all the customers that we were dealing with, the third question in is how can I afford this? What can I do? What's eligible for me? Um, am I going to need to sell my house? And so I realized very quickly this is a finance issue. It's not just about accessing care, it's about accessing the ability to even pay for care. Because if you don't have those choices, you get stuck.

SPEAKER_01 5:24

Do you feel like the care fees are the responsibility, say, of your parents? It's difficult for you because it's like a cultural pressure.

SPEAKER_00 5:33

Yeah. That's a really well you want to do the right thing as well. I mean, lots of people wouldn't want to wouldn't want their parents to just you know I think Western culture is very different. I don't know. We've uh I think we deal with a lot of people who really do care. Actually, a lot of men live with their mums now.

SPEAKER_01 5:48

Really?

SPEAKER_00 5:48

Because dad has already passed. And so they move in to look after mum.

SPEAKER_01 5:52

Actually, saying I had a conversation. My mum was over at the weekend, and you know, if I was to picture my future, it would be I'd have my house in a farmhouse and I'd have like an annex, and that was where annexes are very popular. Yeah, and that's where my mum would live, you know, and I would want to look after her. And I said to the conversation, I've always said I would I'll always look after you. Yeah, I think I I think I would. You know, I genuinely would. So, what sort of struggles and strains that happen when people enter the care system then? What

Hospital Discharge And Fee Shock

SPEAKER_01 6:16

what you know, you obviously how to afford it. Yeah. But what about, you know, someone's all of a sudden ill, they all of a sudden, like yourself, have to cancel their job.

SPEAKER_00 6:23

And well, I think it it's a perfect storm, right? So you uh on the one hand, you have someone who's coming into care and they're either increasingly frail or something happens very suddenly. Um, typically you have a hospital admission. There's something's happened and someone's gone into hospital, um, but there's been a new diagnosis or someone's fallen over, they've broken a hip, and the whole family just has to recalibrate very quickly. Where do we go from here? Um, and you typically see two pathways out of that. One is okay, we have an interim solution and we'll solve it. Um, you know, after a couple of weeks, things will settle down, everything will be fine. Um, and I call those short-term interludes. And then you have what we call the new normal, which is you come out of hospital and now that person can't walk because they've had a stroke or they've been diagnosed with dementia and they've fallen over, um, they're not safe to be on their own. And the whole family has to recalibrate who is available, what do we do? Um, and typically what the hospital will do is send you back to your GP and the local authority. And that's where it gets fun because that they don't have the same systems, they don't talk to each other, there's backlogs in the system, and it takes a very long time for social workers to then come to you, do an assessment, and then and only then do families figure out whether they can get any support from the local uh government or not. And many, many people don't, can't get, or they don't know whether they can or not, or they're given poor advice, frankly. Um, and at that point they get sticker shock, which is if you want this your for yourself or you want to pay for it yourself, it's gonna cost you. And and it is not abnormal to be now paying for care anywhere between 1800 to 2,000 pounds a week. So, and that my mom recently went to see a care home and she thought, oh, it's only 2,000 pounds a month. And I think she misheard. I said, No, it's 2,000 pounds a week.

SPEAKER_01 8:08

Wow.

SPEAKER_00 8:09

Um and so that kind of level of savings is not, it's not, you know, there's not a lot of people who can suddenly pull out that kind of liquid liquidity very quickly. Um, and I think the thing most shocking is there are lots of um, if you do choose to go private, um, and many people do, I think about 50% of the country, um you have to have two years of your fees up front in your bank account, and you have to show that as a bank statement to the care provider before they will let you sign a contract and let you in. Um, and 80% of residents in care homes have dementia. And so in my mind, I'm thinking you have a gentleman or a lady who's got dementia, who is sick enough to, you know, or far advanced enough to need a care place, but they have to have two years' worth of fees liquid in their bank account, but they might not even remember their password. So that feels slightly at odds with me on, you know, A, are they subject to fraud? B, have we thought through this properly? And C, does the family even know how they need to go about that? And it it's it's a very messy system.

Why Most Advisers Feel Unready

SPEAKER_01 9:09

In your experience, and we're bringing it back to financial planners, how many financial planners know what to do in that situation?

SPEAKER_00 9:15

Um, so there are people who do specialize in this. Um, and typically they will have a license or their accreditation and they've spent a lot of time thinking about it. And in terms of, you know, and maybe it's immediate needs annuity, critical um health insurance, critical illness insurance, those types of things. But the typical advisor doesn't. And the reason why is because A, it's um your advisor kind of grows old with you, and there's been a lot of retirement recently of slightly older advisors, and they might have in, you know, it might mean the next generation advisors have inherited uh a bunch of clients who might be slightly older, because we're all living longer, right? Um, and then the other thing is technically that when that person gets sick, um, there's there's two things going on. One is they don't want to admit they're sick. You you can't tell your client, oh, you're, you know, you're sick, you need help. Some people might say, well, I'm old doesn't mean I'm sick. Um, but they're also technically a vulnerable customer. So when you're a vulnerable customer under FCA consumer duty, there's probably a barrage of, you know, paperwork you might need to consider or things you need to think about. You need to tread very carefully. Is it all documented? You don't want to fall foul of regulatory compliance. Um, so there are, you know, if people have choices, they may not choose this area. But what I can say is one in five of us are over the age of 65 in this country right now, and it'll be one in four pretty soon. So this will be the bulk of where wealth is. This will be the bulk of where uh your customers are going to be. So getting smart about this is not a niche issue. It's around kind of getting ahead of it.

SPEAKER_01 10:39

So when does a conversation of care happen?

SPEAKER_00 10:42

Not when it should be happening. Uh I think it should be happening at the time you have a discussion about IHT, uh, about next gen, about planning intragenerational and intergenerational. Uh, right now it's happening in a crisis. So it's like, oh my goodness, I uh my dad's gone into hospital, I heard he's your client, or um, dad just passed away and now we need to talk to mom, or some kind of medical emergency where if you're a trusted advisor, you'll get a call in the middle of the night and they're in a panic because they want to liquidate their long-term investments because they are getting told, okay, you need this money right now. And that's what I call the typical knee-jerk reaction. Um, they'll make a decision and it means they they didn't look at all their options and they went for the fastest way to grab whatever liquidity they could. Um, but it means that they've got less saved up. It means that they are now in a situation where they're not leaving as much for the next generation. Um, and I think one of the other most emotional things is when they are told by um different people, oh, you just have to sell your house. This is no other option. Um that's when your family starts fracturing. Uh, because that we've seen um nothing more emotional than if you have to, if your children are expected to inherit the house and they don't, um, because it's gone towards care. And typically what we see is one member of the family is is I don't want to say stuck, but they take on the bulk of the responsibility of care. And the other siblings don't see the problem. They just think, well, you know, it can't be that difficult. Um, I think it is difficult looking after someone else 24-7, attending to their medical needs, their financial needs. You have to have power of attorney in place, you're making some big bold decisions as well as juggling your own work, career, things like that. Um, but then you know, one might say, Well, I need the house in order to pay for care, and the other say, Well, I want the house for my inheritance. You can't sell it. Um, but all three kids' names are maybe on the house, or you know, it's written in some kind of uh process. And that's when you see families really um breaking away from each other and getting into very difficult conversations and politics, um, and advisors don't want to get in there. Like advisors might be advising multiple people in their family, actually. And what you the last thing they want to do is take sides. Um, so it's a very, very emotional process.

SPEAKER_01 13:02

What should financial planners do at that time if that happens? What's what should they actually do?

SPEAKER_00 13:06

Well, I think they should they should definitely look at how they should look at what advice they're being given. Um, and I don't necessarily mean financial advice, I mean care advice. Like what are what are local authorities saying to them, what are their doctors saying to them? And then, you know, and this is partly why we founded this service, they should speak to people who do this all day, um, uh, which is, you know, what Care Hero does. We uh assign every single member with their own advisor. Um, we're non-FCA regulated, so these are care advisors, but they are uh experts in looking at funding in and looking at your family situation, understanding if there are multiple people in your family who need care. Um, and you can actually get funding if you're caring as well as being the care cared for. Um, and we will take an overarching view of what are that, what is that person's care needs, what are their financial situations, and then present you with options and affordability. Um so you it's different if you get care inside your home versus if you get care outside. So if you leave your house and you and it becomes empty because you want to move into a care home, the government will take your property as a assumed asset with value and they will uh put a charge against it. And that charge means that they will expect that when you pass that house will be sold and that money will go back to the uh the local authority, but that money will go towards paying for your care. Um now, if you have care in your own home, uh your property is not taken into consideration. And so they'll just look at your bank balance, for example, and say, right, you know, you you fall below the threshold or you have this amount of savings, therefore, um, you know, you you qualify for more funding from the government, or we will pay for your care.

SPEAKER_01 14:43

Okay.

SPEAKER_00 14:44

Yeah.

SPEAKER_01 14:44

Okay, that's gonna be one of my questions as well. When it comes to benefits, you always associate benefits with people that can't afford something.

SPEAKER_00 14:50

Yep. That is not true.

SPEAKER_01 14:51

Okay. Yeah. So tell me a little bit about that then. What

The Funding People Forget To Claim

SPEAKER_01 14:54

benefits are there available to families that are either caring or going through care?

SPEAKER_00 14:57

So there's broadly three types of funding. Um, one is means tested, which absolutely does look at income. Um, but again, they only look at certain aspects of your income. So if you're in your house and you're getting care in your home, your property is not taken into consideration. There are certain types of um investments which are also um exempt. Um, and so you could still have a million quid put inside a type of investment. Um, and but they, because it's exempt, they only look at what's in your bank account, um, things like that. Um, and then there's what we call non-means tested, which means you could be Bill Gates and you'd still be eligible for that type of funding. So attendance allowance is typical. Uh, you can now get up to about 5,900 pounds a year of money towards your uh your care. Um, and you can spend it on anything. You can spend it on food, you can spend it on care, you can spend it on getting someone to walk your dog because you're too weak to walk your dog. Um, but that £5,900 is tax-free money. Um, it's not post-income salaried money. It's it's there for you to assist yourself as you're going through um going through care. And then you have what we call healthcare-based funding. So if you are um very poorly, um, you can actually qualify for NHS funding. Um, so it might be funded nursing care, it might be continued healthcare funding, which actually will cover you for all your care costs until the day you pass away. And that tends to be for people who are terminal or have a trajectory towards being terminal. Um, and in those cases, you can be even coming into somewhere with £60,000,000, £70,000 a year to pay for your entire care.

SPEAKER_01 16:29

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SPEAKER_01 16:30

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Building A Care Plan Around Advice

SPEAKER_01 17:33

Okay. So where a financial planner might have built the plan for somebody to retire happily ever after, you know, things in life happen where perhaps someone gets unwell and ill, and as you rightly pointed out, we're living longer and we're getting iller.

SPEAKER_00 17:46

Yeah.

SPEAKER_01 17:47

You work with people that end up in a situation of care to build another plan for the rest of their life.

SPEAKER_00 17:55

Yes. So I I would like to say we're almost like a um a perfect pairing with a financial advisor.

SPEAKER_01 18:02

Yeah, it sounds that way.

SPEAKER_00 18:03

So the financial advisor um quite rightly looks through uh the entire holistic view of that family. You know, how many kids do you have? How do you want to plan for your future? And of course, we all go through different life stages, right? Um, or it might even be, well, I want to leave my money to my grandchildren, et cetera. Um, what they can't uh predict is how's this person going to get sick? When are they gonna get sick? What kind of illness are they gonna have? What kind of care needs do they need? And the market is changing all the time, the government's changing rules all the time. And um, and whilst, you know, yes, there are financial advisors who look after people who are very, very wealthy, uh, or people who are not, you know, not extremely wealthy, but they've definitely got got wealth, you know, stored away somewhere. If you have an option, you do want to look at what you can access before you're funneling into your savings or cashing in on your pension or your insurance or all the things that you had put away for a rainy day, uh, or you'd even put them away as a safe haven to cat that to pass to your children. Um, because care can be very costly and it will drain a hole, a significant hole in your savings if you're not careful. Um, I think that's one factor. The second factor is what I call the reverse of birth order, which is death order uh or care order, maybe I would be as grim as death order. So care order is if you're the first person to need care in your family, then you've got a larger pool of assets to work from. Um, if you are the second person, you assumed that the first person has already used up a good chunk of those assets. So if the house has already been sold or there's a charge against it, or maybe someone put a took an equity release on it, um, instead of using that cash towards buying an immediate needs annuity, they just spent it, right? So, and they prayed that their loved one died before they ran out of money. We see that a lot. Um, now your your second parent or maybe your partner is also sick, uh, because the first maybe your you know ex-person has already passed away now now their partner or maybe your partner or your sibling is passing away, like you know, has a long-term condition. You don't have as much savings as you well, there's not there's less pool of money left, frankly. Um, and therefore you do fall into what I call more government support and and less choice. Um, and what we're beginning to see is families who have uh gone through the, let's say the first parent has already passed, the second parent doesn't have a house to rely on, the savings are probably significantly depleted and they're close to bankruptcy. Then the parents is um on the one hand, you can be quite happy in the children from a children's perspective, you might say, well, okay, they now qualify for more government funding. But then you're also qualified for government, um uh government care. And there could be a backlog, or it could be to a standard that you might not necessarily like. And we are seeing a lot of children, a lot of children are topping up. Um, so they're paying uh a couple of hundred extra quid a week or something to give their parents an option to be go to a pub a private place. But that is actually a good outcome because many people don't actually know that's a choice. And so they will, I've I've seen grown men cry because they leave their, they walk out of a care home on a Sunday and they say, Why did I leave my mom in this situation? Um no one's told them there are other other options, including getting care at home or a day center, um, or even you know, getting a night nurse, but maybe spend time with your mom during the day. Um there's there are there are lots of different combinations, but no one talks you through those those the the sort of array of options that you get. You're just sort of advised while sell your house to pay for care.

Power Of Attorney Before Crisis

SPEAKER_01 21:35

Do you provide education to financial planners to be able to prepare for those conversations? And then the idea is that they signpost the client to you to be able to give that um concierge service, I guess, around that period of life. So Yes.

SPEAKER_00 21:47

So what we do is well, the first conversation we generally have is do you have a power of attorney? Because if you don't, then you can't actually make any decisions for your loved one.

SPEAKER_01 21:55

Just signed one this weekend for my mum, actually.

SPEAKER_00 21:57

Oh that's that's a really good thing to do. I mean What people don't realize is it takes eight to ten weeks for the government to even process your document with the Office of Public Guardian. Um, it is not cheap. It it also, if you even if you have a typo, you have to redo it all over again. Um, so because they're very strict. But also, if someone's gone to hospital and you want to make decisions, and the let's say that person is now in a coma um or they are quite far on their dementia um, you know, journey, the doctor will deem that they need to make a decision. Um, and they might take the, well, they generally, I assume, will take families' wishes into into you know into account, but mostly they will make their judgment on what they deem is best for the patient. And it may not be what the family wants, it may not even be what that person wanted. Uh, but if you don't have a power of attorney for someone's health or their financial, um, you know, their financial uh, you know, means, um, it's left to someone else. Um, and we have had many cases where people didn't realize that until it was too late. And then you have to go through courts, uh, you have to reapply for through the court of protection. It takes ages, it's costly, um, it's a very, it's a very heavy penalty for not being aware. Um, so we will have those conversations and then we'll make sure the family understands what stage of care their loved one is in and what their likelihood is to descend into maybe further care over the next two to five years and what the likely costs are. And if you don't have those conversations now with your loved ones, then you're not really doing planning at all. So if you think about IHT, it's about looking into the future. Um, this is equally as important.

SPEAKER_01 23:32

So these are all things that you've gone through yourself, right?

SPEAKER_00 23:34

Yes.

SPEAKER_01 23:34

Yeah, this is what it's born out of, your own personal experience and wanting to help others not go through something where it's difficult to navigate and the emotional burden and stress and causes you.

SPEAKER_00 23:43

Yeah. And if you told me three and a half, four years ago I'd be sitting here talking about money when it comes to care, I'd I'd think you were, you know, joking. And um, I never expected this to be a finance conversation, but that's the thing that nobody talks about. It is a very, very costly journey that no one ever realizes until they get there and then they get sticker shock and they run out of options and it's too late.

SPEAKER_01 24:04

Let's

Carer Burnout And Dementia Realities

SPEAKER_01 24:05

put the money to one side a second, but what about the well-being of the individuals that are actually looking after uh people that are sick? You know, what do you do to support those individuals? And is there a lot of support there for them?

SPEAKER_00 24:14

It's quite an interesting uh area. So we we do have internal um folks who are uh actually trained mental well-being counselors, for example. And what we have always said is we wanted to build a business that gets to the root cause of the problem. Um, so finance is one, legal is one, the care setup is one. Um, but generally what happens is when when we are approached, it's seldom the care recipient who approaches us. It's the family who've been left to figure out the pieces that do. Um so even if it's one of your clients, for example, as an advisor, they if you're sick, you're not in the mood to read small print. You, you know, you apply for any type of care support via the government, um, which if you get it can be very helpful. They're 40 pages long. And the explainer, the the I can I can confirm because I did it myself recently. The legal power of attorney has a 68-page explainer document on the government website. You're very welcome to read it, it will take you a while. Um, but all these things, when you're poorly, you don't want to read it. I mean, your brain probably just wants to sleep, right? You're trying to get better. So, what you do is you assign the person you love and trust to take care of your affairs for you, and that's the person who we call the attorney. Um, and oftentimes the advisors end up working with the attorney. Um, and I think there are uh they are in huge amounts of stress because they've got their own life, they've got their own family. Typically, you know, they might be married and have their own kids and their own job, uh, they're trying to manage their own wealth in certain ways, and now they're juggling two households, two households, finances, bills, appointments on top of their day job. Um, or you know, if you've got sandwich carers, they've they've got teenage kids and elderly parents. Um, or in some, you know, the I think some of the roughest cases we've ever seen is a woman who had uh her parents weren't well, her in-laws weren't well, and her husband was terminal. And that was very rough. Um, and in those cases, you have to be quite um thoughtful around offering a portfolio approach of advice. Because it could be that you're applying, you're helping them navigate where, what do you apply for first and why? How do you maximize your options to enable that you will come out of it alive, even? Um, and so the mental load is incredibly high. Um, and most people end up quitting their job or having a mental breakdown. Um, so us being there through that journey is very, very important uh because we know what they're going through. Um that I think that's one aspect. The other aspect nobody talks about is when you have um, so dementia is by far the biggest disease now in terms of later life. Um, as I mentioned, 80% of care home residents suffered from dementia. Uh I think one in three of us born today will actually die of dementia. So it's quite a big number. Um, but there is something that I it's not an official term, but I call this myself. I call it reverse parenting. So your mom and dad are now your children. Um, you're but they are still legally adults, so they have to make their own, you know, you have to respect their wishes and make that make that they make their decisions. But if they are declining and deteriorating, you are, you have, they are children. They are you're trying to manage them. And reverse parenting is very emotional uh because um I'm not a clinician, but my understanding is that when you're under duress, you revert to your fellow five, your five-year-old self and you expect your parents to be there for you. So you tell you not to walk across the road, not to bump your head and you know, not to touch the hot kettle. When you're reverse parenting, your parents aren't there. I mean, they're there, but they're not there. You're the parent. So that's a very emotional journey. And if you get up in the morning and your mom doesn't recognize you, you have to, you love them, but they're a stranger all at the same time. Um, and then worst cases we've seen is um we once child held a webinar on how to reduce violence in the home because people actually don't feel safe looking after their loved ones because if they don't recognize them and they think you're a burglar, um, you you will be injured. They will throw stuff at you. So these are all very um, you know, our team has a combination of people who have a lot of care experience and have been through the system, have been living carers, have run care homes, um, as well as those who are funding experts, but you you can't separate one from the other.

SPEAKER_01 28:22

Okay. Um I'd

Making Care A Normal Review Topic

SPEAKER_01 28:23

I'd love to know what you deem as the right way to have the conversation of care as a financial planner. When should you have that conversation? Um, really, what can be done to help um decrease the level of worry, stress, and unpredictability that a family member having or needing care is going to have in the future. Is there something that can be done?

SPEAKER_00 28:45

Yes, I think there can be. So when we look at personas, we think about, you know, what is what makes your client want to talk to you about difficult topics? Um, I think the annual review is always a good way to open those topics. Uh, legal power of attorney is also one I think is very natural to have. Um uh, you know, I I don't obviously I don't speak to um I don't speak to uh you know loads and loads of clients every day in the same way that a financial advisor might do on a one-to-one basis. But there may be a misunderstanding that legal power of attorney is, you know, the minute you sign it over, someone's gonna come and pillage your account. Um actually there are safeguards in place. Um, but having their having that document there for a rainy day is very important. Um, and so maybe even having that discussion with your client to say, you know, is this something that you need to think about? Um, you know, you're 70 years old now, um, or you're, you know, you're 65 and you clearly have some long-term conditions that you're worried about, it's better to have that for a rainy day than not. And here's the consequences. I think what people don't often talk about is if you don't have this in place or this planning in place, these are the financial penalties you have to pay. And they're much more costly than being able to plan for it ahead. Um, and then the other thing is you're if you're having a chat about IHT, it means that person cares about passing money on to the next generation. I think it's very, very natural to say before that money gets passed through, it will take a dip into what we call the lane of care. And whatever costs will come out of that, you're only then passing on what's net after care costs. And it's a journey that we all go through. Uh, we all believe we're never gonna die. Uh, but all of us, as far as I know, all die. So I think these are one of those conversations that if an advisor says it in a um in a way that's almost part of life planning at all, then it won't be as emotional as having the conversation when that person's literally in hospital or on their last legs or very, very poorly. Um, and and you could even, you know, frame it in a way of like, I'm sure you want to leave enough for your next generation or the generation after. Let's have that conversation now so that we can understand what your broader plans are and then speak to someone like Ke Hiro, who can then help you think about the other side of the coin.

SPEAKER_01 31:00

Absolutely. And what about the next generation? So that intergeneral generational wealth transfer, we're looking at five five trillion army. It's such a huge, huge figure that's being passed down generation to generation. Do you think there's the space to be having that conversation with the children? Or do you think that's um disrespectful to the client, for example? Like how do you how do you how do you broach that kind of conversation? Is that at the IHT tax planning point, the power of returning point? That seems like the best best stage because it's a great place to place it. But also I suppose it's it's it's all part of the long-term plan. If I'm sitting here at 44 years old, I should be thinking about care. You're making me think about care now.

SPEAKER_00 31:35

It's it is very interesting because the conversation of care, isn't it? It is a combination of care. And I think when you want to, you know, a lot of advisors are worried about intergenerational transfer of wealth. We're going to lose their client, they don't know the next generation. This is a perfect way to open the conversation and make friends with the next generation. You're there to help them. You're there to basically say, look, you know, your mom and dad will get up like uh unwell one day. Uh this will, you know, you're at the point of transfer. A whole lot of stuff has happened before that point of transfer. We're here to help you more than just the financial aspects. Um, and I think it's a perfect opening to build a broader relationship with families. Um, I also think it's quite interesting that, you know, I don't know the national stats, but my understanding is more men than women seek help from a financial advisor and will set up, set up a relationship with a financial advisor. And if and unfortunately, men do dice on average earlier, a couple of years earlier than women in this country. Um so it does mean that when that wealth transfers, it transfers to your partner, who most likely will be someone's mom. Um, so as the kids are getting involved, because they are naturally going to be the ones who are attorneys, it they want to look after both their mom and dad and have that meaningful conversation.

SPEAKER_01 32:47

Let me ask you with the financial planners that you're working with at the moment, um, the great relationships that you're building, the support that you're giving to them and their clients, men, women, is it equal in respect of the advisor? Who tends to come across engaging with what it is that you're offering?

SPEAKER_00 33:02

That's a really good question. So we do have, we we have both actually. Um, we have those who um specifically started their practice to just build into this because they see it as a growing sector, because all of us are getting older. Um, and there are those who um started advising on later life because they maybe their mom wasn't well and already passed and they felt like, okay, I didn't plan it well for myself and maybe I can help others. Um, and then there are those who are managing multi-generational um facets of someone's family already. So it might be, well, I take care of this entire family. So it's grandpa, parents, kids, and their kids. Um, so they they will basically see as a natural part. Uh, but we see probably I say equal. Uh, I think on the financial advisors, there's slightly more men than women, but definitely the women are very active. Um, and I think they are naturally more um akin to having that caring conversation, if that makes sense. Um, and then what we also see is that they they the word gets around that they're very good at it. Um, and so, you know, within, let's say, women's circles, it might be that, oh, you should really have a chat with that person because they can help you find out if you can get more, get more funding or get more assessments or more financing um before you dip into your savings for care.

SPEAKER_01 34:16

I produce

Retirement Spending And The Hidden Curve

SPEAKER_01 34:17

a podcast called Just Covered for Legal in General, and it's all about life protection.

SPEAKER_00 34:20

Yes.

SPEAKER_01 34:21

And how financial planners should really be positioning it better, having a conversation about death.

SPEAKER_00 34:25

Yes.

SPEAKER_01 34:26

You know, what could happen. And that to have something like a story that resonates with the person that you're speaking to. Yes. More often than not, it's a client that they've worked with, and thank God they had life protection or critical illness or whatever in place that of that individual at the time. It's the same thing, isn't it? Like it's bringing that conversation of care. Because if we look at the, I suppose if we look at the the process of advice is life, it's it's pension, it's investment. But where does care fit into that? Is it is it kind of like if you look at it in the sense of death care life or care death life? So it's like a pro it's a process, isn't it? You kind of got to go through it. And yeah, life pr life planning is very aspirational with this idea that we're gonna be sitting on the brick beach, you know, sipping a pina colada and living out our years. Yes. But the actual reality of it, if you look at the stats, etc., is it's probably there's a high chance that's you you might not get there. Yeah. Um so when you actually bring in another layer of um of risk, I suppose, or of um something that you can't account for and you should account for, then your dream retirement, let's say, is is becoming you know more of a more of a risk. Yeah, I think the preparation of it has to has to come. There has to be this conversation around the Yeah.

SPEAKER_00 35:33

So I I always think um retirement has both a has a romantic uh connotation to it, but then there's also in a reality. And I'm sure you've heard of the U curve, right? So people um retire and they feel like they can finally let loose, go on cruises and spend um um very happily and and buy things that they've always wanted to buy. Um that does happen. And it's uh it's not just unique to this country in every country that we go through the U curve is like, you know, how much you spend versus versus time. What then happens is they've they've gone on their cruises, and my parents did exactly the same thing. They've gone on their cruises and then they sort of bottom out. Now they're very uh, you know, they're watching their savings, they want to make sure it lasts until the day they die. And then you've see the other side of the U curve, which is where it's care costs. Suddenly they're spending a lot of money and it's because they're sick on the other side. Nobody ever talks about that. People think about retirement as, oh, let's go on the cruise and go on the holiday. And I and I think that that is a it's a very nice thing. Uh, but the other side we don't talk about. So, in terms of protection, I like to think about care as the precursor. So when you talk about life insurance, I always find it interesting because you don't get paid until you're dead. So I don't know why it's called life insurance. Maybe, you know, they pay out on your life, of course, but you're already dead. Uh but there's a long journey until you die. Um, and chronic health is by far the biggest issue right now in this country. Uh, we even have almost three million people who aren't working today because they've got long-term chronic conditions. So it isn't unique to just older people. And we don't just help older people, we help anyone from the age of 18. If you've got MS or Parkinson's and you're 50 years old, you could have early onset dementia at 53, you could have been born with spina bifida, all sorts of things. But that journey is long. You're not dead yet at all. Um, so you don't get the payout um from that particular cover until then.

SPEAKER_01 37:25

So why can't people just have critical illness policies?

SPEAKER_00 37:29

You can, and people do, uh, but it's not a well-known product or tool. And um, and sometimes there are very strict criteria. So again, it this is one of those. I I think in my ideal world, I wish everyone had a care insurance that they would pay into. There are other countries that do that.

SPEAKER_01 37:46

Do we not have one in the UK?

SPEAKER_00 37:47

Uh not one that let's say you you pull out of your salary every month and put towards you don't. Right. Um, but there are countries that do, and they do it well. Yeah, but uh we know we have also have the NHS, which is quite unique. Not every country has something like that.

SPEAKER_01 38:00

Okay.

What Financial Planners Should Do Next

SPEAKER_01 38:01

Coming to the end of this podcast now, what would you like a financial planner to do and how should they take action to have that conversation of care or to um to prepare their clients for this life event?

SPEAKER_00 38:14

Yeah, um I think first of all, it would be if I were able to speak to all financial advisors today, I would say that talking about it when it's at crisis point is too late. Um it is something that they might feel awkward to have the conversation, in which case, you know, you can reach out to us, but we but we we do training, for example, on on how to have talk about the elephant in the room. Um it is part of life, it's a very natural step. Getting ahead of it can save the client a lot of money. Uh we've now accessed 12.3 million pounds for clients who came and worked with us. Um and many of them are from the, you know, from had financial advisors. So it's not necessary for those who just don't have money, for example. Um, and um, and I think when they look at their client, think about not just their age, but also their risk factors. Um, if they are looking like they're gonna be very unwell or they're definitely developing long-term conditions, it is okay to have that conversation um and make it less of a stigma. Coming in at a crisis point is already a bit too late for the family.

SPEAKER_01 39:21

Okay. Have the conversation care.

SPEAKER_00 39:22

Yeah.

SPEAKER_01 39:23

Which is what you're doing. Yes. You're like a care hero.

SPEAKER_00 39:26

Yes. And so the reason why we call it care hero is because we think uh carers are unsung heroes. I mean, we saw it during COVID, right? Like people never talk about them, they're never thanked. They're often only called upon when they've done something wrong. Um but I just think it's really important to spotlight there are people like that in who are trying to sort of join all the dots, look after people's money, look after their health, and helping them live longer. Um, and that's why we named the company what it is today.

SPEAKER_01 39:51

Love it. As I said to you, look, you know, my mother-in-law is very unwell. Um, I don't know how far she's gone down what she can and can't access. She herself is in incredible pain.

SPEAKER_00 40:00

Yeah.

SPEAKER_01 40:00

Husband works in um a shop every single day to try and pay the bills, and it's very, very difficult for them. So I definitely need to get in contact with you and understand the options.

SPEAKER_00 40:09

Yeah, about one in two people never apply or consider any type of funding or benefits from the local authority. Every single local authority has slightly different rules. Um, and uh and we think it's a real shame if they haven't had that conversation.

SPEAKER_01 40:22

I think also you need to have the conversation on behalf of them because they're so beaten. So when they go through a system of the NHS and they're getting knocked back all the time, and you know, you're getting conflicting advice. Yeah, always. But also it comes to a point where you just oh we can, we tried it, we can't do anything about it, we can't do anything about it.

SPEAKER_00 40:38

We actually we actually have people who get rejected, yeah. And then they come to us and say, Well, there's nothing there. And we realize they didn't understand the wording in the forms, they're very complicated, they're being thrown a loop to try and navigate a very complex system. There are 39 different benefits they can apply for. And if you aren't eligible for one type, you won't be eligible for another type. So it it is a minefield. And if you don't know how to navigate it, you don't have a specialist, frankly, helping you through it. You automatically assume you're eligible for nothing. And that means you're selling your house, you're dipping into your savings, you're using your life, your life savings.

SPEAKER_01 41:12

Which is also the story of being said in the media as well, right? And you can fall into that trap and believe that that's your only option, which puts you in a complete yeah, it can put you into a state of absolute panic and yeah, and even people who had wealth quickly come out of wealth because you're burning through 100k a year. Yeah, crazy. Well, look,

Closing Thanks And Final Reflection

SPEAKER_01 41:28

the work you're doing is absolutely fantastic. It is purpose-led, it is driven by positive impact at points in in time where people would rather bury their head in the sand that other people are going through that. So I applaud you on that. We want you very much more, and we want to any financial planner listening to this, definitely reach out. This links in the comments. Um, it's people that I want to put you in contact with as well. I do feel like there is a further discussion around this. Um, and I've got a few people I think we can do that with a round table discussion.

SPEAKER_00 41:53

That would be very interesting.

SPEAKER_01 41:53

So I think we should definitely go ahead and do that. But thank you very much for sharing your personal journey um and um the amazing work that you do at Kahiro.

SPEAKER_00 42:00

Thank you. Thanks very much, Sam.

SPEAKER_01 42:02

Okay.