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Podcast Transcript

Episode 102, Season 1

Why you should care, about aged care, with Rachel Lane


Rachel Lane (00:00):

The goal, the end point seems to be retirement. And then you draw down on your super and there’s advice about that and how do you how does that interact with your pension in total? All of those sorts of things about how do you then make that cost. But there’s not really seem to be a need for significant planning beyond that point and yet there really is a need because people are going to make some very big decisions. The biggest one being where will they live?

Fraser Jack (00:32):

Hello and welcome to the Goals Based Advice podcast where I’ve conversations with the pioneers of the new world of financial advice. I’m your host to Fraser Jack. I want to thank you so much for tuning in today. I would also like to thank her supporting her partner Advice Intelligence for powering this podcast. And if you enjoyed this podcast and please help me spread the word by sharing it with your colleagues.

Fraser Jack (00:53):

In this episode I chat with principal of Aged Care Gurus, Rachel Lane. She runs a network of specialist aged care advisors as well as have a software for planners to help them run the numbers and we discuss what age care really is and all the different options available to clients and just when we should be thinking about these conversations with our clients. So if you work with your clients on helping them retire, then I recommend you get across this conversation. Let’s kick off my chat with Rachel now. Welcome to the show, Rachel.

Rachel Lane (01:30):

Hi, thanks for having me.

Fraser Jack (01:31):

Now tell us about yourself.

Rachel Lane (01:34):

What would you like to know?

Fraser Jack (01:36):

Tell us about you and the business.

Rachel Lane (01:39):

Well I guess I started out in financial planning in sort of the early 2000s and fell into aged care advice. I worked in a financial planning firm where there was two parts, two distinct parts to the business. There was the high net worth advice. And the practice also had a number of accountants. And then there was the aged care advice. And that was not really a focus of the business, but it was something that was growing as a result of the director of the business having given advice to his mother in law who moved into aged care.

Rachel Lane (02:17):

And it just sort of took on a life of its own where the aged care facility started referring other people that they thought had a similar problem. And I just really, I guess because I grew up with my grandma, I understood that generation, I understood what they wanted, I understood what they valued and I just really loved those clients. And so I sort of pursued that part of the business unit, that part of advice. And I found that the aged care facilities were so happy with what was the advice that was being given to their residents. And then they had networks and so they would talk to other aged care facilities and say, “Oh, you should send your residents to see Rachel if they’ve got these financial problems.” And it just blossomed from there.

Fraser Jack (03:06):

Yeah. I really liked this scenario that you grew up with your grandmother said that you obviously came from a massive place of empathy from that. And then it’s interesting that these are the way that these businesses we fall into advice and even the people that you’re working with, they sort of had, I think you put it as the aged care part of the business because of a need, because it’s something that happened and they went, “Oh we need to do this.” It wasn’t sort of a pre plan thing around, “Okay, let’s set out to do this in a structured format because we know the demographics or whatever is going to work.” It was just, we will fell into, it’s interesting, isn’t it?

Rachel Lane (03:44):

Yeah, that’s right.

Fraser Jack (03:45):

Yeah. So you, so you now run, tell us about the network that you run and how does that work?

Rachel Lane (03:51):

So we have a network of about 40 financial advisors. So I guess when I was advising, there wasn’t really the resources that I would’ve really liked. And so we’ve built that for our network of advisors. And sometimes I refer to it as our office in a box, but it’s much more than that. We’ve got some really terrific software that can model all different scenarios and project those scenarios and put tables into a word document to create whether it’s a discussion paper or a statement of advice, whatever it is the advisors looking to create. We’ve got fact sheets, newsletters. We really try and help the advisor from a kind of whole of business approach, but certainly our software is the hero at the moment.

Fraser Jack (04:43):

Yeah. I know. I really want to told you about the software because obviously I’m passionate about software. But before we do, I want to talk about the idea of the network. How does, how does this work as this, it’s not a licensee, it’s sort of a group, it’s a collective that you, although you do sort of a lot of training inside it?

Rachel Lane (04:58):

Yeah. So I guess when I stepped away from advice and I had a lot of different what we call centers of influence, referral partners, whatever you want to call them, I could see that we needed to have a network of advisors to provide that advice because I felt like I can’t just step away from this and leave people with no advice.

Rachel Lane (05:20):

So I wanted to build a network of advisors who shared the same I guess, ethics that I do that share the same passion for aged care. And so I went about building an education framework of what do I think they need to know about granny flats, retirement villages, Landlease communities, home care, residential aged care, and putting all of that into various workshops and accreditations.

Rachel Lane (05:48):

And in more recent times, we’ve taken that education pathway through to UTS, University of Technology in Sydney. And that’s available from next year as a subject in the masters of financial planning. So we’ve always known that that’s where it sits. But it’s great to get a university on board and we can offer it as a residential subject. And then we’ve created a designation which we abbreviate to RELACS, but which stands for Retirement Living in Aged Care Specialist. And we’ve gone down the road of having that trademarked with IP Australia and doing all of those sorts of things. And we very much encourage our advisors to kind of tick off all of the education that’s needed to hold that designation, which really is the pinnacle of education in aged care advice.

Fraser Jack (06:49):

So I love that. I love this, that you would use the word specialist because it is a very much a specialty. Let’s go into this, the just the age care because we ‘bunny ears’ whatever we want to call them. It’s a big thing and we often get narrowed down to it’s just one thing, but it’s a lot of things. Do you want to sort of abbreviate on that?

Rachel Lane (07:15):

I ask advisors this question a lot when they say, “Oh look, I really can’t make a business out of aged care advice or I really can’t see the opportunity in providing aged care advice.” And the first question I’ll say to them is, “Well, what is your definition of aged care advice?” They’re like, “Well looking at the structuring of assets and income for pension and means tested care fee arrangements for people moving into residential aged care.” That’s kind of the kind of synopsis that they’d give me. And I say, “Right, but what about the other 82% of people who don’t get their aged care in a residential aged care facility? What advice are you going to offer them?”

Rachel Lane (07:53):

And sort of look at me like, because the media do such a good job of perpetuating this myth that if you need aged care, you must move into what we used to call a nursing home, what we now call residential aged care. And it’s simply not true. And it’s becoming less and less true over time. So at the moment we’ve got about 1.3 million people accessing aged care services and about 230-ish thousand of them leaving residential aged care. By 2050 they think that that 1.3 million people will become 3.5 million people as a result of what they call the aging population. And I put the bunny ears on that because we have to call it the aging population or the baby boomers will revolt. Because we can’t tell them they’re getting older, but that the reality is we’re talking about the baby boomers.

Fraser Jack (08:50):

It’s a spectrum. We’re all aging, right?

Rachel Lane (08:53):

Some of us count some of us don’t. But yeah, so that 3.5 million, if you had the same roughly 80/20 split, that would mean that we would need to go from circa 200,000 residential aged care beds to 700,000 residential aged care beds. And it’s just not going to happen. It’s just not going to happen. Even at the moment we see residential aged care with vacancy rates of about 10%.

Rachel Lane (09:28):

So more and more people are choosing to get their aged care somewhere other than residential aged care. And that’s not to say that residential aged care is an invalid option is absolutely a valid option. And for a lot of people it is a necessary option. But I think it’s important from an advice point of view and there’s several reasons why I think it’s important that the definition advisors have of aged care advice is pretty much any decision the client can make about how and where they get their aged care.

Rachel Lane (10:03):

So it might be a granny flat with their kids fraught with danger by the way, [crosstalk 00:10:09] that might be their choice. Or it might be a retirement village that delivers a combination of home care packages and private care. It’s really about understanding that clients have all these options and advice is no less valuable if it’s a granny flat or a retirement village. In fact, I’d probably argue advice is even more valuable in those scenarios. But it does create a lot more of a requirement around education, accreditation and the tools and support the advisor are going to need to access enabled to deliver that really good advice.

Fraser Jack (10:50):

Yeah, it seems to me that we’re waiting too long. We’re waiting till residential aged care is needed, where we should be having these conversations around the over 50s, over 60s sixties. The things that are springing up everywhere where you buy your house it’s a-

Rachel Lane (11:05):

Landlease community.

Fraser Jack (11:06):

Landlease community title and everyone sort of is moving into those and partying from what I can hear.

Rachel Lane (11:15):


Fraser Jack (11:17):

But that’s where it starts. Right? And so that’s where the advice needs to start. Not waiting until we’re getting to the residential care into the end of it, I guess you could say.

Rachel Lane (11:28):

Yeah, I think the financial advice industry have done a terrific job of explaining to people the need to plan for retirement. I don’t know that we’ve done such a great job of explaining to people the need to plan beyond retirement. I think the kind of the goal, the end point seems to be retirement and then you draw down your super and there’s advice about that and how do you how does that interact with your pension, in total? All of those sorts of things about how do you then make that cost? But there’s not really seen to be a need for significant planning beyond that point. And yet there really is a need because people are going to make some very big decisions. The biggest one being where will they live?

Fraser Jack (12:18):

Yeah. And who are they going to live with as we just mentioned. So let’s go into this part because this is a really interesting part. A lot of the time, one of the options as you mentioned, probably not the best option is to just the granny flat conversation and move in with the kids. Tell us about that, fraught with danger.

Rachel Lane (12:36):

Well, like I said at the start, I grew up with my grandma, so I have intimate experience with these granny flat arrangements. And it is one of those things that I think a lot of it comes from very good and sometimes cultural expectations sit around granny flat arrangements as well. But a lot of the time people haven’t really thought it through. They’ve kind of thought about it on a surface level. And sometimes mum thinks, “Oh this is terrific of have clearly done the best job as a mother because my children want to look after me forever and ever, amen.”

Rachel Lane (13:14):

And then kids think, “Well, this is terrific. Mum loves spending time with the grandkids. We’ve got our Saturday nights back. Tickety boo. This works for everybody.” But they really need to kind of think beyond that. And the hardest part of that conversation with families in my experience is to say, “Well, when does it end?” Because no one ever wants to talk about a granny flat arrangement ending. It’s just there’s going to be a celestial transfer. Mom’s going to go to sleep one night, up until then, having no care needs whatsoever, still driving and then in her sleep, celestial transfer. And that’s the end of the granny flat arrangement.

Rachel Lane (13:56):

But of course there’s so many things and I always say to people, “If you’re setting up this granny flat arrangement today and mum’s 75 today, how long realistically do you think is granny flat arrangements going to last?” I said, “Oh well 15 years. Mum could make 90 maybe longer if mom makes 100, 25 years.” So okay then that’s the starting point. “What do we think could happen over that 25 years? You kids could lose your jobs. Is there a mortgage on the house? You kids could become sick, your kids could move out, but move back in. You could divorce. The property, could be part of a property settlement.”

Rachel Lane (14:39):

All of these things that could happen, including mum could need care at some point in time. Now that came might be short term care. It might be longterm care in the home or it might be that her care needs dictate that she needs to move into residential aged care, that that is the safest environment and the best environment for her to be in. We have to deal with everything that is likely to come up over the term of this agreement.

Rachel Lane (15:06):

You see them think, “Oh, my gosh, I hadn’t really thought about that. I’ve just thought about what are we going to build? How are we going to connect the services? What’s it going to look like on Sunday lunch when everybody gets together and it’s so nice to have three or four generations around the dining table.” And they haven’t really thought about the practicalities, insurances that they might need to stop mom from being rendered homeless if they default on their home loan. And all of those things that are, that are boring, but they’re necessary.

Rachel Lane (15:35):

Because the one thing I know is that nobody ever really looks at their contract after they sign it until something happens that they’re not expecting. So until they’re faced with a situation where they say, “Oh, I don’t really know what my rights and responsibilities are here. I don’t really know what I should do and what I should expect somebody else to do. I’ll look at my contract and see what it says.” And really that’s what a contract is for. Is to very clearly set out what happens when and why.

Rachel Lane (16:10):

And so I used to encourage clients to have granny flat agreements that accounted for absolutely everything. Who pays what share of the water bill, the power bill. Is mum responsible for rate? Is she responsible for insurances? In Victoria we have these funny planning laws where you can build a granny flat as what’s known as a dependent persons unit. It involves putting that person’s name and date of birth and things like that on the actual planning permit.

Rachel Lane (16:39):

But it also requires normally that you pack it up when the dependent person who’s no longer living there. So there’s concessions given to the planning permit because of the family arrangements. So a lot of the time you’ve got siblings who sit there and they say, “Well this is completely unfair. My brother is getting an $80,000 capital improvement to his home through this granny flat. It’s going to increase the value of his home. He shouldn’t get as much as inheritance as what I get because he’s got this benefit along the way.”

Rachel Lane (17:10):

And it’s like, “Well have you factored in to that, that that granny flat is going to need to be removed when mom’s not living there and the landscaping’s going to need to be replaced and all the services that are connected to it need to be disconnected? And then the second hand price of granny flats isn’t that high. In fact, if you want to get a bargain in the property market, secondhand granny flats are pretty cheap for the value you get.

Rachel Lane (17:38):

I think what makes it hard is it’s a family dynamic. And so a lot of the time people don’t want to talk about what they expect and certainly they don’t want to talk about things coming to an end and everybody not getting along because they don’t go into it with that expectation. But it’s really important that they have those agreements.

Fraser Jack (17:57):

Yeah. I was going to ask you about the prenup, but you, you did cover off on that already. So you’re right. It’s important that everyone understands what’s going to happen when, not if, but when it all comes to an end. So you’ve got a network of advisors, you mentioned the software earlier. I’m really keen to chat about the software. How does that work? One of the things I was going to ask you about the software because of the demographic of the clients. Obviously there’s a perception out there that software and people are, who are in the aged care area don’t always mix. Can you depend on that?

Rachel Lane (18:35):

Well our software is for financial advisors. I’m not sure what would happen if you tried to put it in the hands of consumers. It is pretty technical in terms of the modeling that it can do because it’s really designed to model financial advice. So it’s designed to be able to model sort of five or six different scenarios, whether you keep the house, sell the house, rent the house all of that kind of stuff.

Rachel Lane (18:57):

So I don’t know, it’s like any form of calculator, right? If you put rubbish in, you’ll get rubbish out. I don’t know that if you put it in the hands of consumers, as much as I am absolutely all about empowering consumers to make informed decisions that they would necessarily be able to drive it.

Fraser Jack (19:17):

Yeah. But what about the report that comes out of it? They actually look at that and value there. The fact that it’s been through something so rigorous?

Rachel Lane (19:26):

Well, I don’t know that the consumer knows how the advisors are producing the advice. And from our point of view from Aged Care Guru’s point of view, yes, we’re sending consumers to our advisor network to get advice because we genuinely believe that they are the best of the best. And so it makes sense to send someone to an advisor that you have confidence he’s going to deliver great advice.

Rachel Lane (19:53):

But I don’t know that the consumer has any awareness or expectation that when the advisor is producing that advice document that it’s coming out of software built by Aged Care Gurus. We don’t label because it comes out on the advisor’s advice document, be that a discussion paper a statement of advice. However the advisor wants to use that information in delivering their advice. We’re just there really to run the scenarios and the projections and pension calculations and retirement village exit fee calculations and all of those sorts of things for them.

Fraser Jack (20:32):

So tell us how this works then what does the advisor do and what do they get and what do they see and how does it work?

Rachel Lane (20:39):

In terms of being part of the network?

Fraser Jack (20:41):

The software, as in technically what the advisor has to put in and what they get out and what they can see.

Rachel Lane (20:47):

Okay, so I guess from our point of view, we have two memberships. We have the network where they have to have a certain level of education and pass an accreditation to be invited to be part of that network. And the network do receive technical support, on call technical support as well as referrals.

Rachel Lane (21:11):

And then we have our more basic membership, which we call essentials and both of them give access to the software. So the software itself can run, like I said, up to five, maybe six scenarios depending on what it is that you’re trying to model. It’s got a lot of smarts built into it.

Rachel Lane (21:30):

So when we decided to go down the road of offering an essentials membership, we realized that unlike the advisor network who some of them have worked with me for the best part of a decade, unlike those guys, some of the people that would be using the software that was subscribing under the essentials amp service may be new to aged care advice.

Rachel Lane (21:53):

So we’ve built in to the software what we call the advice buddy. And the advice buddy is there to say essentially, “Hey, did you know, that this is how the rules work under these circumstances?” So just to give you an example, if you’re modeling something for residential aged care, it will ask you what is the date of entry for this particular client?

Rachel Lane (22:20):

Based on that date of entry, there are different rules that can apply to the former home. So if you keep and rent the former home and the person went into aged care in 2015 there’s a completely different set of rules that would apply then if that person went into aged care today. And a lot of people seek advice after they’ve moved into residential aged care because that move can be really fast.

Rachel Lane (22:43):

So the advice body will tell you, “Hey, this person entered aged care in this time and if you keep and rent the former home, then it will be exempt from the asset test. It will the rent generator. We didn’t want to create software that dictated to the advisor what the strategies should be. But we also didn’t want to create software that assumed that the advisor knew and understood every different set of rules that is going to be applied in the software without telling them what was going on.

Rachel Lane (23:22):

And sometimes before we added the advice buddy in, we would get phone calls saying, “Oh, the software is wrong. We’ve done these calculations and it’s not including the rain in the means tested care fee.” Of course we’d look at it, we go, “Oh my gosh, what’s happened?” So we’d look at it and we’d be like, “No, I based on that date of entry, the rent isn’t included in the means tested care fee.”

Rachel Lane (23:46):

And the advisor would be like, because if they came into advice after those rules had been superseded by other rules, then it’s never been part of their kind of education training, all of those sorts of things. So we have a little advice buddy in there that helps the advisor to know about different rules that that can and do apply and even things about retirement villages. “Did that this person will be traded as a non homeowner under these circumstances and may be eligible to receive rent assistance?” It’s just little kind of tool tips or whatever. I more think of them as strategy tips to help. It’s really there to help the advisor formulate the advice.

Fraser Jack (24:29):

Yeah, brilliant. And of course the one thing we know for sure is that the rules are going to change and change and change again and again.

Rachel Lane (24:34):

Change is inevitable.

Fraser Jack (24:36):

Its like keeping up with all the rules is a pretty hard job if you’re not utilizing the software.

Rachel Lane (24:41):

Well and if you’ve come into the industry and those rules were long kind of, you can’t even see them anymore in the rear vision mirror, it can help to make sense of it all.

Fraser Jack (24:54):

Now if somebody wanted to go forth and get the accreditation, the specialists there RELACS as you put it, how would they do that?

Rachel Lane (25:03):

So they can jump on our website and look at the education pathway. Obviously from the new year there’ll be able to do that through UTS. We run workshops, so typically the, the starting point for a lot of advisors is the residential aged care workshop, which takes two days. But it really depends. Some advisors who already have quite a bit of experience and education around residential aged care, they want to start with education on things that they haven’t done any education about in the past.

Rachel Lane (25:40):

So they might start with our retirement communities workshop because they can see quite obviously that they’re doing residential aged care advice, but it’s not enough. And simply to have a business but simply by adding retirement communities to that which is quite complimentary, completely different. It’s an apple and an orange financially speaking, but complimentary in terms of what their clients are looking at. Then just by doing that they’ve doubled their market. Because there’s roughly the same number of people living in retirement communities as there are living in residential aged care.

Rachel Lane (26:21):

So it really does depend. We don’t kind of dictate that the advisors have to start with a particular topic. If they’re coming in with no experience, most of them will start with residential aged care because it’s something that they’ve heard of or they have some limited understanding of. But really it’s up to them. Some start on granny flats, some start on home care. It’ll just depend on the advisor themselves.

Rachel Lane (26:48):

I guess, which workshops we’ve got coming up. It may be that at the point that they decide that they want to make aged care part of their business, the next workshop coming up is a granny flats workshop. So they think, “Well I’ll start my education pathway with that.” There’s no workshop that’s any more or less important than any other when they’re trying to get to the RELACS designation.

Fraser Jack (27:13):

It’s interesting and we come back to the size of the market conversation, each little piece you add to the jigsaw puzzle increases the size of the market. And you mentioned some figures around that, that size of the market. How do you see, like how is this traveling over the next few years? Is it getting Windsor peak in all this?

Rachel Lane (27:31):

Well peak’s estimated to be roughly, I think 2052 is estimated to be peak demand. And like I said before, where we’re currently sitting at about 1.3 million people accessing aged care services nationally. And 2050 figures are about 3.5 million. So you’re talking about more than doubling of the numbers in the next 30 years. And I think as a result of that increase, we’ll also see a greater tendency towards non residential aged care decisions.

Rachel Lane (28:12):

So yeah, it’s definitely a growing market. And I’m hopeful that there’s also going to be some innovations in terms of products that are available for people to use to help them fund aged care. Because I don’t think aged care is getting any cheaper anytime soon.

Fraser Jack (28:30):

No it’s not. It’s a lot of people to service when you’ve got sort of 40 year old advisors in the network. So it’s a lot of people per advisor. It’s a lot of people per advisor. If you’ve got 15,000 financial planners in the network. It’s still a lot of people to look after.

Rachel Lane (28:45):

And some of the advisors are incredibly busy. In fact a lot of my advisors and a lot of the growth that we’ve had in the network has been organic growth. So what I mean by that is we have an advisor who starts out saying, “Well, I want to kind of go down this road and make this part of my business and then they get too busy. By the time they decide that they’re too busy, they’re doing sort of 10 or 15 appointments a week on aged care advice and they’re literally working seven days a week. And they go, “Oh, I think I need to add another advisor.” It’s like, “Yeah, I think you do.” And the network’s grown a lot through that kind of organic growth as the individual advisors, businesses have grown, they’ve then employed another advisor to help them.

Fraser Jack (29:30):

Yeah. Then the way I see this coming into the goals based advice conversation as you said before, is that that planning beyond retirement conversations and planning to what people’s goals and values and dreams and hopes and wishes are not just at the retirement date but post. They might go through a phase of the first few years of retirement where they’re having a great time but then planning ahead.

Rachel Lane (29:52):

Some of my advisors do a terrific job in terms of yes, they give aged care advice solely. So they’ve just got so much work that they can’t go back to giving planning for retirement advice, but they have complementary advisors in their office. Because a lot of the time with aged care advice, you’re not just dealing with the person going into aged care, you’re dealing with their children who are perhaps they’re either as an interested party or as a power of attorney.

Rachel Lane (30:23):

And it’s very common for them to come back and say, “Listen, what you did for mom and dad or both is amazing. And we’d really like you to give us some advice about our circumstances.” But of course their, their circumstances are a completely different thing. And so there are a number of advisors who are making good referrals inside their practice as a result of the aged care advice too.

Fraser Jack (30:48):

You are certainly seeing a lot of practices form out of what used to be sort of a few smaller businesses getting together and forming these professional practices. So yeah, I can certainly see how one of the areas of their business could be the age care conversation.

Rachel Lane (31:01):

Yeah. And when I was an advisor, that’s what I used to do. If someone came to me and said “Thanks so much for what you did for mom, could you give me advice about whatever.” And I’d say, “Look, yeah, technically yes. The piece of paper on the wall behind me says that I can, but I just don’t believe that I am in the best position to give you the best advice. But I know people who are really good at superannuation advice, if that’s the sort of advice that they were looking for and I’ll happily refer you over to them.”

Rachel Lane (31:32):

After a period of time, we all used to refer to each other and you had lawyers and other accountants and other people and I termed at the mutual admiration society because we never charged people for our referrals or some of the things that go on now, we just worked in the best interests of our clients and that had paid its own dividends.

Fraser Jack (31:55):

Yeah. And that’s certainly worked for a long period of time. I hope that doesn’t change under the new rules that are coming in, but it’s absolutely right. If you trust somebody to look after the people that you want looked after, then you should still be able to say, “I trust this person to do this thing.” Now you’ve written a few books or a couple of books and white papers and you write everything really. I mean-

Rachel Lane (32:17):

For someone who’s not a very good writer. I seem to spend a lot of time doing it. But I think I spend so much time doing it because I’m not very good at it.

Fraser Jack (32:24):

So you think it’s a good practice?

Rachel Lane (32:26):

Oh, I’m not really sure, but I’m, I’m very jealous of, Noel Whittaker is my coauthor on a lot of the books and he seems to just be able to write so easily and so clearly. And I look at that with such admiration and because to me, writing is almost torturous. And yet I seem to do it to myself on a daily, if not weekly basis.

Fraser Jack (32:53):

You’re an author.

Rachel Lane (32:55):

Well, I never set out to be. Noel convinced me to do that. So he had his mother-in-law needing to go into aged care and very kindly invited me over to his house for dinner one night when I was in Brisbane. And he asked me a whole lot of questions that he was trying to sort of map out what to do and I duly answered, “Do this and you do that and that’ll be okay,” and whatever. And then at the end of the main meal he said, “Now this is fantastic this is terrific.”

Rachel Lane (33:32):

That’s how Noel talks. He’s very excited. And I said, “And clearly you the answers to all of these things and I know you so this is wonderful.” He said, “But what about the people who don’t know you? How are they meant to get these answers to these questions?” I just looked at him, I said, “I don’t know. I’ve got no idea.” And he said, “Well, you should write a book.”

Rachel Lane (33:58):

And I just looked at you, shook my head. I said, “Mate, what would I know about writing a book?” And he said, “I’ll help you. You write a book.” So I duly sat down and started writing Aged Care, Who Cares. Which is a now bestselling book in its third edition and I guess kind of the pin-up child of the books that we’ve written. It just has taken on a life of its own really where people say to me, “So when are you writing the next one? I’ve got, I’ve got every edition.” I always joke, because I keep changing the color of, the cover has an orange panel at the bottom, but a different color at the top for each edition. So I say we’ll have to have some sort of a prize or some sort of where people make a suggestion about what the color should be for the next edition.

Rachel Lane (34:59):

So we do that now. Most recent book, which came out two days ago now, which is Downsizing Made Simple. That’s just taken on a life of its own, I guess. Because I think sometimes you just have the right topic at the right time.

Fraser Jack (35:17):

Downsizing is certainly a huge topic at the moment. Tiny houses and smaller houses. There was movie on downsizing. But you sort of refer to it as right sizing.

Rachel Lane (35:27):

Yeah. Well, because it is. And I think downsizing still has some negative connotations. I think sometimes people hear the word downsizing and they think, “Well, this going to be terrible. I’m going to have to throw out or give away all these things that I love and want and use and I’m going to end up living in a shoe box and I won’t be able to take any of the furniture that has been handed down and holds such a precious place in my memories and all of that.”

Rachel Lane (35:52):

And it’s just not true. I say to people when I’m talking about right sizing or downsizing, “How many bedrooms have you got?” Most of them will say four. Okay. “And how many bedrooms do you use?” And most of them say, “Well two. We have the bedroom that we sleep in and then we have the other one, which we use as a home office or a craft room.” I’m like, “So what do the other two bedrooms serve as a purpose?”

Rachel Lane (36:19):

“Oh, well our kids have left their stuff here that they don’t want thrown out, their childhood toys and their school uniforms.” And it’s like, “Right. So it’s so precious that they can’t find anywhere to store it except your house?” So to me it is about right-sizing. It’s about looking at what do you want, like what lifestyle do you want for the next chapter of life. And being retirement and what accommodation is going to give you that lifestyle.

Rachel Lane (36:51):

If you want to travel all over the country or all over the world for six months of the year, it can be hard to do that if you’ve got a freestanding house in the suburbs with a swimming pool and a garden and you might not feel like it’s safe to just lock it up and leave it for six months. And so is that the right property for this stage of your life? And really just looking at what’s going to give you the best lifestyle.

Rachel Lane (37:17):

If you say, “Look, Rachel, I really want my lifestyle to be cleaning out the gutters and mowing the lawns and fishing leaves out of the pool and all the rest of it.” Then downsizing might not be for you. We’re not saying everybody should downsize, but certainly for people who are looking at downsizing, there’s so many options.

Rachel Lane (37:37):

And I think sometimes it can be that people think the only option is to move into an apartment or a townhouse, but there’s so many options that people have got. As you said before about the Landlease communities popping up everywhere. There’s such a popular option because you still have a freestanding house. Some of those houses are still quite big. You get three bedroom and a study houses, you get front verandas, backyards, all of those sorts of things, but they’re much easier to maintain and you get all of the communal facilities, the swimming pools, but you don’t have to fish the leaves out the gardens. But someone else trims the hedges and mows of the lawns. All of that comes with it. And they’re becoming really popular for exactly that reason.

Fraser Jack (38:23):

Yeah. Now I wanted to ask you about writing a book because a lot of planners they get told, “You should write a book.” “Yeah, I should.” But I admire the idea that you probably didn’t know where to start or what to do. And so you co-authored in that, for somebody who’s obviously knew what they were doing. So talk me through that process and then how would you recommend people get involved if they wanted to write a book?

Rachel Lane (38:47):

The key word, which you just said is process. So first of all, understand that it’s a process. I often joke, people say to me, “Oh, you’ve written a new book. How long did that take?” And I’ll joke and say, “A couple of weekends.” In reality, writing a book takes months if not the best part of a year. Depending on what else you’ve got going on. But there’s a lot of time and, and research and effort that goes in to writing a book. I think everybody finds a process that works for them.

Rachel Lane (39:21):

And I guess in my mind, I’m not a writer, so I don’t feel like I’m qualified to tell people how to write a book. I get that I’ve written a few, but I don’t kind of identify myself as a writer because I it is a bit torturous for me to do. For me, the process is about I start with the list of chapters. So I start with what am I going to write about? And then I find that some of those chapters become so big because there’s other related topics that you can’t necessarily not talk about. And so then you have to kind of work out, well, what, what goes where?

Rachel Lane (40:05):

But I honestly, I don’t, I don’t know what advice to give somebody about writing a book other than, except that it’s a process except that it’s kind of like renovating your house. Right? That’s the best analogy-

Fraser Jack (40:21):

Do you mean it never finishes?

Rachel Lane (40:24):

As in it’s going to take three times as long as you expect in costs twice as much.

Fraser Jack (40:28):

Fair enough. Oh, very good. Let’s look at the future. We talked about the market growing and those sorts of things happening. How do you see this sort of playing out over the next few years been on the changes in the government and a lot of stuff going on. I’m from Queensland, so there’s a lot of stuff going on with regards to aged care facilities and how they work. Where do you see sort of things moving in this direction?

Rachel Lane (40:54):

Well and you may have heard that aged care have got their own Royal Commission underway at the moment. Final recommendations from that are about 12 months away. I expect that that will result in change. In fact I’m banking on it resulting in change because clearly things need to change. I expect that over time. The structure of the actual aged care system is still quite heavily biased towards residential aged care. Even though it’s the smallest kind of category like Commonwealth Home Support Program deliver care and support services to a lot more people than residential aged care.

Rachel Lane (41:57):

Residential aged care is what takes up the lion’s share of the government’s budget. So I think with the aging population, and we have a huge issue with home care packages. There’s about a 100,000 people getting a home care package and about 120,000 waiting for one. And there’s some really just terrible statistics about 13,000 people died last year waiting for their home care package. It has to change. It just has to change.

Rachel Lane (42:34):

That’s going to require a realignment of funding, more funding. Although I don’t think we’ve got a government that’s inclined to do that. And even if we look at trying to solve just the home care package issue estimates from the aged care industry about what it would cost to fix that. So to have a 60 day maximum waiting time for home care package the costs is something like 1.3 to $1.7 billion. It’s not something that is cheap to solve, but it has to be solved.

Rachel Lane (43:15):

So I expect there’s going to be quite a big shake up in terms of where money goes as part of that. If the government want to minimize the amount of funding that they need to contribute but still fix it. Then I always say there’s only two people who pay for the aged care, the consumer and the government. So if the government aren’t paying, then the consumer will need to pay. It’s really that simple. And I think people need to be prepared for that.

Fraser Jack (43:52):

Yeah, certainly the cost of those things, if they’re going up, then their planners need to know about those and factor them in now.

Rachel Lane (43:58):

Yeah, absolutely. The good thing is that a lot of the time when these changes get made, people that are already in the current system are grandfathered, but it affects new entrants. So I’d be very surprised if there were changes to the means testing arrangements that then were applied retrospectively to existing users.

Fraser Jack (44:25):

That’s be a bit unfair. Now if you’re talking to consumers and I think you do a lot. What, what do you say to them?

Rachel Lane (44:32):

What are you trying to say?

Fraser Jack (44:35):

I know you talk to a lot of them. A lot of people have reached out, what are your tips for consumers that thinking about getting aged care or getting aged care early?

Rachel Lane (44:44):

Well that’s one of the tips is to plan ahead. Failing to plan is planning to fail, as I say. I do talk to a lot of consumers every weekend. When I’m talking to them about aged care are also do a bit of a poll and say, “Right, so how many of you, if and when you ever need aged care, want to get that aged care in your own home?” And all the hands go up. There’s virtually no one with their hand down going, “Nope, I’m moving into a nursing home when that time comes.” So everybody puts their hand up and I say, “Great. The thing that you guys all need to know is that aged care can be home delivered, but it’s not Uber Eats.”

Rachel Lane (45:34):

You don’t dial it up on your phone and in 20 minutes time, ding dong, I’m here with the key. It doesn’t work like that. At the moment, there’s people waiting to, we’ve even seen cases three years for home care package to start. So if that’s what you want, you need to plan for that. For some people they say, “Oh, well if I can’t get a home care package, then I’ll have to move into residential aged care.” And they make all sorts of assumptions that residential aged care is going to give them more care.

Rachel Lane (46:05):

I think one of the things we’ve learned from the Royal Commission is that this kind of unspoken truth or expectation that residential aged care provides the most amount of care of any care environment. I think what we’ve learned is that that’s simply not true in every case. So I always say to them, “Well, if you can’t get a home care package, it doesn’t mean you have to move into residential aged care. You need to know that residential aged care may not be the cheapest option that people think it’s means tested and therefore it’s affordable.” Well, that’s going to depend on what your circumstances are and how you choose to pay for it. It could very well be cheaper to stay at home and get private care and perhaps top it up with some help from family, friends, neighbors, people from the church, whatever it is that you’re doing.

Rachel Lane (46:59):

But to me, I guess the most important message for people who are looking at aged care, and this was really my motivation in writing the book Aged Care, Who Cares with Noel. Is there’s no such thing as right, wrong, best, right? It is what works for you. So if what works for you is to move into a retirement village and to have your care provided in that village and that village can do that in that safe and affordable and all of those sorts, then that’s what you should do.

Rachel Lane (47:41):

I guess what I struggle with is this kind of people try to homogenize it and yet we’re talking about individuals. And for some individuals that’s what they want. They want a retirement village where they can live as independently as possible. They can burn their toast in the morning if that’s what they want to do, they can make their own cups of tea and then they can also get some care and support.

Rachel Lane (48:08):

But likewise, there’s plenty of people who say, “Well, my expectation is that I’ll live with family.” And it’s really about just supporting people to make the decision that is best and right for them and kind of offering up the smorgasbord of choices to help them work out which one is it that they want or at least create a shortlist of things that they think might work and then they can go and kind of investigate those.

Fraser Jack (48:39):

Yeah, the smorgasbord idea is pretty important as well with regards to the unknown. If you don’t know what’s there, then how can you choose? Now, what tips do you give to planners, we’re about to go into 2020 and beyond. What tips you have to planners that are looking at getting into this?

Rachel Lane (49:01):

Well you don’t mind number one tip is please don’t define aged care advice as helping people move into residential aged care. Undoubtedly if you have an aged care advice business, that will be a big part of what you do, but it shouldn’t be everything that you do. And the reason I believe that and believe that passionately is because I think if the education and the tools that you equip yourself with focused on residential aged care, then you run the risk of not being able to provide great advice on the other options and potentially steering clients down a road that that isn’t it’s kind of like a square peg in a round hole.

Rachel Lane (49:44):

If that’s the advice that you’re really good at and they come in wondering about what their options are, you can kind of lead them down that path. Which I don’t think is the right thing to do. It’s really about the advice working for the client whatever their decision might be.

Fraser Jack (50:05):

I kind of feel after our chat today that the conversation around introducing aged care into your practice is one that you should do out of conscious thought and to be prepared and get yourself ready. And so that when that the cases or the conversations come up, you’re ready for it. Not just quickly rush at the last minute and go, “Oh now I’ve got client here sitting in front of me, I need to quickly work this out.”

Rachel Lane (50:30):

Yeah. It is a specialist area. I don’t see a need for every financial advisor to be giving aged care advice in the same way that I don’t see a need for every financial advisor to be giving self managed Superfund advice. It is a specialist area. So I guess it’s a question of saying, “Is this a specialist area that I’m passionate about?” Because really that’s what specialist areas are. They’re something that you just love doing.

Rachel Lane (51:00):

And if the answer to that is, “Well maybe not.” Then potentially the best option would be to have one of those mutual admiration societies where you have an aged care guru that you can refer your clients who need aged care advice and they can reciprocate with clients who need your advice in your specialty area. I don’t subscribe to this idea that every financial advisor needs to be trained on aged care advice.

Fraser Jack (51:30):

Now, Rachel, if you could go back in time and have a do over and give yourself some advice or tips, where would you go and what would you say to yourself?

Rachel Lane (51:41):

Do you know what? I feel so lucky that I found aged care advice. I’d been working as a financial advisor for a few years and I liked it, but I didn’t love it. I found it really interesting and really challenging. And I’ve worked in a few different kind of parts of the business from corporate super to company and trust structures for high net worth individuals. And none of it was really kind of rocking my world, if you know what I mean.

Rachel Lane (52:13):

And I just fell into this area of advice and I just loved it. And I look at people who have careers and some of those careers last a long time. And they never find something that they love that much. So I don’t think I’d change anything to be honest. So I think I’m very fortunate to have had a career that is a topic that I’m passionate about and I wouldn’t swap it for the world.

Fraser Jack (52:43):

Fantastic. Now you say you fell into it, but it sounds to me like he grew up with it.

Rachel Lane (52:47):

Yeah, exactly.

Fraser Jack (52:48):

Every time you help somebody you think, oh, I’m actually helping.

Rachel Lane (52:50):

Well, and my grandma I probably didn’t know that I was being trained as a financial planner when she was teaching me in the supermarket how to work out, before that they had to give you a price per unit. She was teaching me how to calculate what the cost is per unit or per biscuit or whatever it was that she was buying. And she was having grown up in the depression and things like that. And she’s a pensioner and that side of the family is Scottish. She is very thrifty.

Rachel Lane (53:24):

And some of some of her ways have gotten her into trouble over time. There’s a famous story of her which ended up getting, I told it at a Christmas party a few years ago to the editor of the money section of Sydney Morning Herald and she rang me a few weeks later and she said, “Can I ring your grandma and talk to her about her money saving tips?” And I said, “Sure.”

Rachel Lane (53:53):

But what she’d done is she lived in the Yarra Valley at that time and she had a manual car, a tiny little Mazda 323, manual car. And she was driving to the top of the hill and then putting the car in neutral and rolling down the other side to try and save money on petrol. But she got done by a police car with a radar gun that clocked here at more than 30 kilometers above the speed limit. So I got a phone call from the side of the highway because they impounded her car because we’ve got anti-

Fraser Jack (54:29):

For Hooning.

Rachel Lane (54:30):

Yeah, for Hooning. Exactly. Anti Hooning laws. And anyway, my mom and I had to get her car out of the impact and do all of that sort of stuff. And yeah it was quite funny. And I just said to her, “What on earth are you trying to do?” She said, “Well petrol is very expensive.” And that’s all she had to say. Having grown up with her, I understood completely. But I did go out and buy her a new car because that car was getting a bit long in the tooth. And when I bought this new car, I affectionately refer to her as a Ducky. She’s very small. And growing up she told me that she had caught Duck’s disease and that’s why she was so small. Because I was fascinated with how little she was.

Rachel Lane (55:19):

And anyway, so I got the personalized number plates Ducky and gave her this new car. I said, Now Duck, I’ve got good news and I’ve got bad news.” And she’s like, “Right.” And I said, “Well the good news is you’ve got an FM radio now.” Because the old car only had AM. She said, “Okay.” I said, “And the bad news is that this is an automatic car. So if you try that business where you put it in neutral, the steering wheel will lock and you’ll hit a tree. So don’t do that. No more putting the car in neutral and rolling down the hills.”

Fraser Jack (55:48):

And no more getting the car impounded for Hooning.

Rachel Lane (55:51):

Exactly. [crosstalk 00:55:52] It cost about $900 to get the car out, pay the fine. All the bits and pieces that went with it. So I said to her, “I hope you saved a lot of petrol Duck, because that was an expensive exercise.”

Fraser Jack (56:07):

Well she’s probably been doing it for years, so she probably has.

Rachel Lane (56:11):

Well, let’s not think about that. But you’re probably right.

Fraser Jack (56:12):

Rachel, thank you so much for coming here and having a chat with me today.

Rachel Lane (56:14):

You’re welcome, Thanks for having me.

Fraser Jack (56:15):

It’s been brilliant and I think a lot of people will get some great content and information out of what they should and could be doing in this space. Thank you.

Rachel Lane (56:22):

You’re welcome.

Fraser Jack (56:23):

If you haven’t already, I’d love you to subscribe to the podcast on your podcast platform of choice. And to continue the conversation head over to our social media channels. We’ll catch you next time.



Disclaimer: This document is a transcription obtained through a third party. There is no claim to accuracy on the content provided in this document, and divergence from the audio file are to be expected. As a transcription, this is not a legal document in itself, and should not be considered binding to advice intelligence, but merely a convenience for reference.