Putting people front and centre

As consumers considering their retirement options become more sophisticated, seek more flexible and comprehensive services to meet their changing health and wellbeing needs as they age, and arrive with more complex financial circumstances, retirement living operators need to develop accommodation and service models to meet these changing needs and continue to put consumers front and centre.

It has been a busy 12 to 18 months in the sector as retirement living operators work at developing these models while continuing to work within an increasingly complex regulatory framework. 

Retirement living operators have developed alternative service models within the traditional retirement village, through offering user pays services directly or through a brokered arrangement with a third party provider or assisting residents to access funded home care services by partnering with approved home care providers or in some cases providing those services through their own business operation by becoming an approved provider. 

These models assist consumers to remain in their own homes, obtain the services they need to meet their changing health and wellbeing needs, without the risk of losing their security of tenure due to their increasing care needs. This changing offer has increased the demand for entry to retirement living and for at least one of our clients increased the market price for accommodation in their developments. 

We have also assisted retirement living operators in developing a variety of financial models, tailored to the different financial circumstances of consumers. A prepaid upfront model may be more attractive to a consumer with significant assets; a guaranteed buyback for a fixed price may be more attractive to a consumer with limited assets, receiving the full aged pension; a pay as you go model may be more attractive to a consumer with a continuing income stream with assets invested in long term arrangements.

The opportunity for consumers to elect which model suits their financial circumstances is a significant improvement to the financial offering in the sector. However, significant work is still required to educate consumers as to the differing models, ensure they seek appropriate financial and legal advice and can make informed decisions as to the model which suits their needs, and to ensure that full and clear disclosure of the offerings are provided.   

These market offerings can only be further refined and developed in a regulatory framework which allows for innovation by operators and choice for consumers. Of course, these models must be offered with full disclosure, transparency, consultation with consumers and so as to ensure their security of tenure.

It will be an important part of this process to ensure that regulators are supportive of these developments and the opportunity they provide to consumers and ensuring that their needs are put front and centre. 

This article was written by Rosemary Southgate, Principal, Russell Kennedy Lawyers. Russell Kennedy is a sponsor of the National Retirement Living Summit 2018.