LTC Bullet:  Damned if You Don't 

Tuesday, August 22, 2006 


LTC Comment:  Senior financial advisers may get little credit for recommending solid long-term care financing plans, but you're damned if you don't.  Details after the ***news.*** 

*** SUMMERTIME.  Your Center for Long-Term Care Reform is about to take a little time off.  Between now and September 7, you'll receive fewer LTC Bullets and LTC E-Alerts.  From September 7 until the end of the month, we'll be offline altogether for some overseas travel.  Enjoy the break.  We'll be back atcha full force in October. *** 



LTC Comment:  As long-term care planning becomes more and more important, the risk to financial advisors, including lawyers, financial planners, and insurance agents, of failing to cover it becomes much greater.  If they carelessly neglect to advise their clients of the need to plan and insure for long-term care, they can be vulnerable to accusations of malpractice.  And now it is starting to happen!  Here's the story. 

First, kudos to Harley Gordon, Founder and President of the Corporation for Long-Term Care Certification (, for pointing out this risk last August in "The Coming Wave:  Financial Liability for Failure to Recommend a Plan for Long-term Care," an article in the Journal of Financial Planning that you can still read at  

LTC Bullets agrees with Mr. Gordon on this so much that we published an earlier version of his article in "LTC Bullet:  LTCi Professional Liability for Financial Advisors" on March 10, 2004 and included a link to a similar piece by Center for Long-Term Care Reform president Steve Moses in the September 2001 Journal of Financial Planning titled "Long-Term Care Due Diligence for Professional Financial Advisors."  Check out the earlier Bullet at and read Steve's article at  

Now, here's the news.  Gordon's newsletter for his Certified in Long-Term Care graduates (CLTC E-Alert - Putting Advice in Writing, 8/15/2006) reports the following: 

"The obvious has happened. 

"A story in Registered Rep detailed the travails of a registered advisor who recommended long-term care insurance to his clients.  The problem is that he did not put it in writing assuming the clients would take note.  They didn't, but the children did.  They sued the advisor for malpractice after both parents were diagnosed with Alzheimer's.  The article made a number of points that are relevant to financial service professionals, first among them is that failure to discuss a plan for long-term care and protect the plan with long-term care insurance is grounds for professional malpractice.  Other points addressed in this first rate article:  

* Always put the advice in writing. The article stated that if the recommendation had been clearly stated in a letter, it is unlikely an action would have been filed.  

* Check your E&O policy carefully. When the advisor put the claim in the carrier denied coverage claiming that although the policy would have covered an action brought by the clients there was a specific exclusion for third party plaintiffs, in this case the children who filed the suit.  

"The full story, Scary Story, by Janet Arrowood can be read here.  Reprints are available from Foster Reprints (866) 436-8366. 

"The Coming Wave:  Financial Liability for Failure to Recommend a Plan for Long-term Care" by Harley Gordon can be found here

"Reprints are available from: 

"Donna Summers
Wright's Reprints
24900 Pitkin Rd., Ste. 330
The Woodlands, TX 77386
(877) 652-5295, ext. 106
Source:  Scary Story, written by Janet Arrowood, Registered Rep, April, 2006"