If you are like most advisors, you may believe that the greatest threat to your business is that all of your clients are dying. That’s right; it is inevitable. Most advisors are by now aware that a massive generational wealth shift is under way. If you are a typical successful advisor, many of your clients are at or nearing retirement. As they age and pass away, their wealth will transfer to the next generation. If you do not have a good relationship with that next generation, you are likely to lose their accounts.

But there is a more immediate threat to your business that is much less frequently discussed: the threat that your clients will have health or age-related issues that jeopardize their financial decision-making and their wealth before they die. If you do not help your clients identify potential risks, plan for change or take the necessary steps to protect them before problems arise, their financial security will be at risk, and your ability to provide financial advice for the next generation will be jeopardized, too.

Until recently, there was no health and eldercare financial planning platform that advisors could turn to that dealt with these issues systematically. Now there is. It’s called “Whealthcare.”

It’s the brainchild of Carolyn McClanahan, a medical doctor and CFP. McClanahan is the co-founder of Whealthcare Planning LLC and founder and director of financial planning at Life Planning Partners Inc. In addition to NAPFA and the FPA, she belongs to the American Academy of Family Physicians. Having begun her career as a doctor, she speaks nationally to planners and physicians on the interplay between health and financial issues, while also contributing to Forbes, Financial Planning magazine and CNBC; offering quotes to The Wall Street Journal, The New York Times and The Washington Post; and appearing on Hardball and National Public Radio.

Whealthcare’s co-founder is Chris Heye, a tech entrepreneur who earned his Ph.D. from MIT. The firm’s advisory board includes Anthony Weiner, the director of outpatient geriatric psychiatry at Massachusetts General Hospital, and Ned Hallowell, a child and adult psychiatrist who has authored 18 books on various psychological topics. Barb Culver, another respected name in the planning profession, is also an advisor.
It is difficult to imagine a more qualified brain trust.

While most advisors would agree that protecting their clients is the right thing to do, there are other, more practical reasons that Whealthcare is the right product at the right time. First, we’ve already outlined the case for protecting the assets for the next generation. In addition, beginning in February 2018 Finra will require advisors to make a reasonable effort to obtain the name and contact information of a trusted contact person for their clients. This is part of the Whealthcare process. The North American Securities Administrators Association (NASAA) Guide recommends that firms “consider providing client-facing and other personnel … an assessment tool for cognitive skills that can be incorporated into ongoing training.” Furthermore, the Senior Safe Act, now before Congress, would require advisors to undergo training for the identification and reporting of the exploitation of seniors in order to receive immunity from legal suits.

So, What is Whealthcare Planning?
Whealthcare Planning is a software platform that contains three modules: the Financial Caretaking Plan, the Whealthcare Risk Profile and the Proactive Aging Plan. The Financial Caretaking Plan is a 30-question exercise that should not take more than 15 minutes to complete. It collects some basic demographic information, then asks a few questions about who currently manages the finances, whether a power of attorney exists and, if so, how old it is and has it been accepted by all relevant institutions, etc.?

The program then asks the client to designate one or more financial caretakers (you can split the tasks among multiple people). It next asks a number of questions that help you determine how capable the client currently is to handle financial decision-making. If a client is currently capable, he or she can set parameters under which a caretaker will be notified or take action (for any transactions over “X” amount of dollars, for example). Finally, the client answers a number of questions to determine how current his or her current estate plan is and what, if any, actions are necessary to bring it up to date.

The application then generates a nice color report in the form of a checklist. It highlights clearly all the high-priority tasks. In addition, it contains multiple hyperlinks with definitions, explanations and additional educational materials. The report is divided into sections on the caretaker, bill paying, investments, estate planning, and other topics so it is very clear what need each recommendation addresses.

The test for the client’s risk profile differs substantially from others that advisors may have seen. It begins with an assessment of behavior, which may appear somewhat similar to other industry tests, but which also has some questions that are less typical. It then moves on to questions about the risk of cognitive decline. Next, the application presents questions to assess a client’s financial literacy and, finally, it asks about a client’s memory. Upon completion of this section, a report is generated that scores the client in each area. The number is not immediately meaningful to new users, but the scores are color coded (for example, a green check mark means a good score). Short explanations and warnings adjoin each score. For example, even if you score well on the cognitive test, the software may advise you to take it again regularly since changes can be sudden in some cases. The scores are followed by additional information and recommendations. For example, even if your cognitive score is good, the application may advise regular exercise to help keep it that way.

The Proactive Aging Plan establishes your client’s living preferences, quality of life directives and attitudes toward medical treatment. It also incorporates the client’s life expectancy, health status and region to generate custom health-care cost estimates, including long-term-care cost scenarios.

Like the other modules, this one starts with demographic information. If you have already provided this information through another module, the information will carry over. The questionnaire begins by gathering some health information, including data on the client’s height, weight, level of exercise, tobacco use, diet and more. It also asks where the client will live during retirement to better estimate costs. Then it generates an estimated life expectancy based on the information provided. If a client does not like the computer-generated number, and I suspect some will not, they can alter it to their liking. Next, the client is asked a few questions about their attitudes toward health care in order to better determine whether their health-care costs will likely be higher than average.

If costs are likely, they are asked if they want to learn how to lower costs or revisit their previous answers. The next section deals with quality of life directives. Clients may be familiar with these, but according to McClanahan, clients often think in general terms as opposed to specifics, which can create ambiguity for those trying to carry out their wishes. For example, many clients might want to decline further treatment if they are brain-dead and given no chance of recovery, but they may not have clearly expressed those wishes before they are in a situation where they can no longer swallow food or speak. This exercise allows clients to make their wishes clear in some level of detail.

Once this section is completed, the program will identify inconsistencies, if any, and offer the user a chance to go back and address those inconsistencies if they so desire.

Next, clients are asked about living transitions. Do they want to stay in their own home until they die? If so, is the home suitable and will someone be there with them? If not, can the necessary adjustments be made, and at what cost? If not, alternatives are examined through a series of further questions. Surprisingly, there is a separate series of questions about clients’ ability to drive, presumably because when they give up driving it limits their independence and that is a source of friction within many families. The questionnaire asks the client in advance to describe under what conditions they would give up driving before the issue becomes an urgent one.

After the client completes this module, the program generates another report. It begins with a written summary of what the client has said/agreed to.

Then, given the information provided, it projects estimated costs (health insurance and health care) for each year of a client’s projected life expectancy. The projections also take into account the state the clients live in, and the area within the state where the clients say they will be living during retirement.

The report then uses the data to project the likelihood that the client will need long-term care (if any), the projected length of the care and the cost (if the care is provided locally). This is followed by a list of client preferences and directives and a checklist of required steps, divided by category. Like the other reports, these offer ample hyperlinks to definitions and additional information.

Besides the three modules, there are plenty of other useful functions here. There is an advisor dashboard that allows advisors to view a list of clients and which modules have been completed by each client. For each module completed, the advisor can generate a report right from the dashboard in a PDF or rich-text format, which can then be read and edited in Microsoft Word. You can also e-mail a client a report from within the dashboard or initiate a module update from here.

There is a tool kit that provides more information on each module. There are also numerous conversation starters that help novices to the field better approach these conversations with clients. There are all kinds of sample documents ranging from letters introducing the process to clients to pet care plans, family agreements on driving and more. There is also an education center with a rich selection of videos and articles on most related topics. To my knowledge, there is nothing quite like this available on the market today.

Whealthcare offers two pricing plans. For the caretaker plan and risk modules alone, the cost is $795 annually for up to 50 plans. The complete package with all three modules, which appears to me the better choice, is $995 for up to 50 plans.

My Initial Take
From a content perspective, there is really nothing to criticize here. This is the gold standard. If you want to provide this type of service, and you should, you will want to purchase Whealthcare. In addition, usability is surprisingly good for a newly released product. The reports are very well designed and user friendly.

If there is any criticism we can level at Whealthcare at all, it is the current lack of integrations, but that is to be expected at this early stage. Currently, you can import your contacts from another application, but there is no integration with the leading CRM, financial planning or portal providers. We expect those integrations to take place as Whealthcare gains traction and industry participants come to understand just how vital it can be for both clients and the future health of an advisor’s business.

It is a very rare occurrence for a firm to identify a new niche and establish a new software category within the financial advisory universe, but it looks as if Whealthcare has done just that. I know that McClanahan and her team have been developing this application for quite some time, but it looks like it was well worth the wait.test