Beware of "free" Senior Living Advisor services
Posted November 19, 2018 12:09 p.m. EST
Updated November 19, 2018 5:59 p.m. EST
A number of people have recently asked me how seemingly “free” Senior Living Advisors from national companies like A Place for Mom, CarePatrol or Caring.com get paid to help them identify the best retirement community for their family. The short answer is they are paid by the community where they place their client.
While a family working with this kind of advisor or agent is never billed once they have selected an assisted living or memory community, in truth, they may end up paying dearly over time for this “free” service. These advisors, who work in many ways like a realtor, are paid a commission which can range from a few thousand dollars up to one to two times the cost of one month’s rent by the community who receives the placement.
I was recently brought in to help a family move a loved one from one memory community to another. In trying to negotiate down the "community fee" (which was the equivalent of one month's rent), the marketing director at that community said there was no room for negotiation because she had just paid the Senior Living Advisor who brought the family for the initial tour $8,500. When I conveyed to the family that I could not negotiate the community fee, they were dismayed. They said, "She got paid $8,500 for taking us on two tours one afternoon?"
Unfortunately, I had to tell them, that's right.
While many of these agents or advisors go into this service with the best of intentions, it would be easy to understand how they might, over time, only place clients in the communities that offer the highest payment incentives.
These agents may have no idea how the monthly price of a place changes over time with increasing care levels. They may not have financial referral relationships with communities that are much more convenient for a family. Also, importantly, they may not really know what the care is like in the places they are recommending to clients because they have no relationship with the clients over time. Once they’ve received their commission from the community, their work is done. If the family is disappointed with the care received, they have no recourse with the agent they worked with.
When I entered this field, I had no idea that this was the predominant business model. In caring for my own family members, I simply saw a need for some kind of wise guide to choosing the best option for a very particular family’s needs. I came to understand that it’s so difficult and overwhelming to choose a place—and honestly, having been in and out of 60 to 80 places in this region, I know that no place is perfect.
I also know what helps make one place more right for one family than another. The factors I consider are proximity to family and community, quality of the kind of care this specific family member needs, the monthly cost on entry and how the cost escalates over time (as care levels increase), whether the place can accommodate needs over time or the different needs of a married couple, whether the community meets the requirements of a long term care insurance plan, etc.
Clients pay me on an hourly or set-fee basis for a lengthy report detailing three appropriate choices, with pros and cons of each, and an apples to apples cost comparison over time. If the average person needs significant care for two and a half years-- twenty percent of people need care for more than five years—this can translate to a difference in cost between places of a hundred thousand dollars or more.
When I asked a Marketing Director of an Assisted Living community about the practice of paying Senior Living Advisors a set fee or the equivalent of one to two month's rent, she said, “we consider this simply part of our marketing budget.”
An owner of a local family care home said the same. "It allows me to fill my rooms without bringing on a permanent marketing director who I have to keep paying even when all my rooms are filled."
I suppose if you take nothing else away from this article, please understand that there are no “free” senior living advising services, or that what might seem like a good deal in the short-run may end up costing you more than a pretty penny (or even 100,000 of them) over time.