As the baby boom population ages and average life expectancies climb, advisors must address elder care in their client conversations. Wealth management firms like Morgan Stanley, U.S. Trust and Wells Fargo Private Bank are tackling this issue with services aimed at helping to ease their clients' elder care challenges.
In a May survey from Bank of America Merrill Lynch and demographic research firm Age Wave, 52% of respondents with between $250,000 to $3 million in investable assets cited health care costs as a top concern. Three-quarters of all respondents wanted help with health and long-term care choices, while 40% asked for more direction on caring for aging relatives and parents.
To better answer this outcry from advisors and clients, wealth management firms are setting up or expanding partnerships with health care companies that offer assessments, planning and elder care coordination services. The result is a new suite of offerings that address this major, and very emotional, source of client angst and potential financial drain.
Morgan Stanley has turned to PinnacleCare, a health care advisory company based in Baltimore, to design specialized elder care services, according to Deanna Rodriguez, executive director of lifestyle advisory services at Morgan Stanley Wealth Management. "Just as we have helped clients plan for college educations, our advisors were being asked, 'How do I plan for caring for my parents?" Rodriguez says.
The initial package of services from PinnacleCare, which provides services separately from Morgan Stanley, includes a health assessment of an elderly family member, patient medical record coordination, in-home evaluation of the person's ability to live unassisted, research on the person's Medicare coverage and assistance with insurance claims. Clients are charged a flat fee for these initial services. Additional services are charged separately, or clients can pay an annual subscription fee for on-going assistance.
The new offering expands an existing relationship between the firms. Morgan Stanley has long referred clients to PinnacleCare for guidance on health care issues ranging from chronic disease to terminal illness. Peter Chieco, a Morgan Stanley private wealth advisor, used PinnacleCare last year when the 23-year old son of a client was experiencing sudden adverse symptoms that his family thought was related to his cystic fibrosis. After evaluations by PinnacleCare, the clients learned the symptoms were due to overmedication from painkillers. He's now happy to offer his clients PinnacleCare's elder services.
Wells Fargo started its program in 1997 for frail, elderly clients who were in crisis. But in the past six years, the program has shifted to focus on helping clients remain independent as long as possible, says Keith Klovee-Smith, head of elder services at Wells Fargo Private Bank. That shift resulted in dramatic growth, Klovee-Smith says. Now, the services, which target clients with $1 million and up in investable assets, are provided in 70 markets in 28 states.
The elder serviceswhich cost an additional feeinclude a health and wellness assessment completed by a medical professional, processing of claims for medical and insurance bills, preparation of tax documents and help with life and wealth management decisions including powers of attorney and the assessment of a client's social and psychological wellbeing, among others.
The services offer a glimpse into a client's situation that sometimes even his or her family does not see, Klovee-Smith says. One 72-year-old client had $2.5 million in assets and was reluctant to make any moves with her money. Unknown to her family, she wanted to leave $2 million to her daughter.
During conversations with the Wells Fargo elder services specialists, the woman revealed her plan. The firm coordinated a conversation between the client and her daughter. The daughter reassured her mother she was financially sound, which encouraged her mother to spend money on planning for her own care.
Old and New
At U.S. Trust, elder care services came as part of a broader push in 2011 to embrace both the next and older generations, says Chris Heil- mann, chief fiduciary executive at U.S. Trust, Bank of America Private Wealth Management.
The elder services, which are complimentary to the firm's predominantly ultra-high-net-worth clients, include: organizational services that compile and store documents like power of attorney, health care proxy and life insurance policies in one place; care coordination, in which the firm works with third-party providers for health care assessments and related services; wealth planning services; long-term care insurance; and estate planning services for both clients and their families. Fees charged by third parties are paid for by the client directly.
The elder care services have been successful in both luring new clients and serving long-standing ones, Heilmann says. Recently, when a client in her 80s from Washington, D.C., became ill on a trip to New York, U.S. Trust's team was able to arrange for her transportation home and have professionals waiting on her arrival to administer the health care assessments she needed, Heilmann says.