Tuesday, November 13, 2018

'Growing Old Profitably' - focus on private payers - ditch local authority customers

I am amazed that it has taken the care industry so long to realise that sticking with local authority customers leads in one direction - and that is a place you don't want to go.

We all know the gap between the fees paid by private payers and council clients. For too long we have had the nasty practice of making those that fund their own care subsidise those referred from social services. It is another form of taxation.

This was never going to be a stable situation yet only now are we seeing how the story is going to unfold. This week's Economist had an article titled 'Growing Old Profitably'. The title should have been 'How to grow profitably on the old'

A summary of the Economist's reporting.

Much of the care industry is in terrible finance shape. It is estimated that England has lost 3,700 beds since 2012. It is not only beds that have been lost but also the profits of providing care.

There a few markets where demand is soaring as profits plummet..

Care UK's boss, Andrew Knight, is quoted saying that the only way to provide care is to take more residents who pay their own way. Nobody can argue with that assumption.

Of course this will cause the plight of care companies that rely on state funded customers to worsen.

What we are seeing is the a clear division between the care that older people will receive depending on the size of bank balance. Those companies that want to keep their selling costs low and rely on a contract from the local council will have to radically reshape how they deliver care. Failing that their financial demise is just a matter of time. A sad situation but one that has been very obvious for years. Dick Stroud

Friday, October 05, 2018

Pity the media noise about millennials is not matched by their financial importance

I feel sorry for millennials. They are suffering from the same stereotypical generalisations that has plagued their parents and grand parents. Marketers think they are the only game in town. Many employers believe they are an infuriating bunch to manage. As always they reality is much more complicated.

The one thing that is for sure is that for some time - like a decade or two - their parents and their parent's parents will be a lot more important to the wealth management industry.

This chart, from The Deloitte Centre for Financial Services, says it all. It shows the total value of financial assets held by each generation.



A much repeated saying about China is that it will get old before it gets rich. Like all simplistic statements it has some elements of truth. I wonder if we will soon be saying the same about millennials. Its ironical that the intergenerational fairness lobby are succeeding in cutting benefits to older people but it will the young, when they reach their parent's age, that will suffer the most from these changes. Weird old world. Dick Stroud

Sunday, September 30, 2018

Not much going on in the ageing business - the Apple Watch 4 is worth a few words

It is 6 months ago that I last wrote a blog post. I am very touched by the number of people who contacted me to enquire if I was OK. I am in fine health (I think) and my silence has been intentional - for a couple of reasons.

The first these is positive - I have been working flat out on another project that has nothing to do with ageing. In addition I spent a lot of time enjoying myself.

The other reason for my silence is negative - there is precious little new taking place.

When you have been reading, writing and talking about all things ageing, for the last 15 years, you reach a point where nothing much new seems to be happening. Perhaps that is inevitable?

For sure the ageing-blob is alive and kicking and seems to be doing OK. Lots of research and conferences about the same things it was researching and having conferences about 5 years ago. Thankfully for the blob there is a constant stream of new people, with a passing interesting in the subject of longevity/demographics or whatever you want to call the subject. It is sad when much of the research and commentary is portrayed as being new, rather than a re-hash of previous work.

Unfortunately, the BIG issues of ageing remain and their consequences become more acute. Little being done to solve the problems or to capture the opportunities. Rather, all the attention seems to on trying to find technological solutions to ageing's peripheral issues. Well done to the guys who are making money out of this funding and innovation business, but I haven’t seen much in the way of new products and services that are going to change the world or indeed make a profit.

I suspect that I am taking an overly negative view of things and will keep a watching brief on the subject and comment, from time to time. Hopefully, there is some genuinely innovative thinking going on. I will be the first to comment upon it when it breaks cover.


That all said, the launch of the Apple Watch 4 is worthy of comment. Not the most exciting of presentations but the new functionality is most interesting. The biggest round of applause from the audience came with the announcement of its Electro Cardiogram (ECG) feature. I would guess the average age of the audience was less than 30 and here they were getting excited about a feature that very few of them would need for a couple of decades. it is a weird world. The watch also has the ability to detect falls. OK, I guess a lot of the audience cycle and it might be relevant to them but most falls occur to older people.

So it looks like Apple is expanding the market for the watch from fitness to now include health, and particularly health issues that affect older people.

You cannot please everybody and Laurie Orlov has had a rant (her words not mine)
about the way the fall functionality was implemented. I think she is being a tad unfair. For me it is great to see a world leading supplier starting to add some sophisticated features to its product line that are of particular use to older consumers. What's the betting that by the time the Apple Watch 6 is launched it will be something that is prescribed by NHS GPs. Dick Stroud