Ralph Leisle, Executive Vice President
“New insights and emerging reality have outpaced conventional wisdom”. Finding his personal interests changing from a large corporate structure, Ralph migrated to financial services and began an immersion in financial planning. There, he and his fellow professionals heard statements like “Everyone knows long-term care insurance isn't right for the affluent market” … “Self-insurance is the way to go for high net worth families” … “Don't waste your time or their money on LTCI.”

Ralph's corporate background included various roles challenging the status quo. While not a “techie”, he, along with several MIT graduates with those skills, created a “what if” type software program. This was designed to aid seven VPs in their role of allocating corporate resources among the various business entities. Developing the model required detailed insights into each business. It quickly became clear conventional wisdom prevailed at the macro level, but the seven equally experienced professionals had very different opinions about fundamental areas of the business.

After initial rejection of the new planning system, over time, it set the stage for new understanding of each business and a massive change in macro level conventional wisdom. This change in thinking ultimately led to restructuring the corporation, discontinuing several businesses, and allocating more resources to those with greater opportunity to enhance return on investment. Looking at core assumptions, with fresh eyes, changed decisions and improved performance.

So, how is this experience relevant to long term care financial planning? After emerging to fee based estate planning, several of Ralph's clients who had long-term care insurance called to ask to what degree their policy would cover 24/7 home care. The clients advised Ralph that they would spend out-of- pocket whatever amount required in order to stay in their own home when needing extended care. Their preference was to have some or most of the cost covered by insurance.

This led Ralph to research both the cost of 24/7 home care in several markets, and the cost of substantial home care insurance coverage. He then did an analysis in the same disciplined approach as other estate planning issues. He concluded the probability of needing care; the impact on the investment portfolio; and the non-financial family relationship issues, made insurance coverage more valuable and cost effective than other commonly insured risks. Further, his analysis found insurance cost, but never needing care, was miniscule, compared to the quick return of capital at time of claim.

When looking at the impact of care costs on investment portfolios and loss of investment income over the household's lifetime, the resulting multi-million dollar impact raised alarm bells. Ralph reached the conclusion it was a breach of fiduciary responsibility to ignore this risk if being paid to assist the client build and protect wealth. In order to more effectively analyze specific client situations, Ralph created totally objective, unbiased software, designed to deliver a simple, coherent picture of the financial impact if paying care costs from personal resources, or with insurance. Since there was not anything available anywhere to do this type comprehensive LTC planning, or comparative decision analysis, he patented the program and planning process. The program has come to be respected by professionals who now recognize the importance of addressing this issue with their affluent clients.

As he became convinced that most of the elite insurance and professional advisor industry was looking at LTC through a distorted lens, Ralph could no longer allow those messages to go unchallenged. He began writing formal rebuttals to expert opinions in leading professional journals and has since amassed a library of articles, which are attracting increasing attention and support for his perspective. He rebuts each false assertion point by point, and is comfortable being challenged by skeptics so he can make his case with cold, hard facts backed up by the numbers. Ralph is now recognized as the leading expert on LTC financial planning for the affluent.

Ralph's public positions about LTCi recognize that everyone requires re-education – the affluent, the middle market, and his or her advisors. By digging into the old assumptions, he hopes to show a growing audience that what they “know is true” is actually wrong, as well as dangerous to their clients' financial and emotional well-being. For example, advising a client that taking the amount that would be paid in premium, and investing it, will cover future cost of care, is not factual and easily refuted.

Who should provide LTC planning advice? In Ralph's view, the recommendation to examine the realities of extended care should come from anyone who is being compensated to provide any form of wealth management advice. For that reason, he is engaging his expertise and systems as a principal of LTC Risk Advisors. While he does not automatically advocate the purchase of LTCi, he sees few cases where it does not make good financial sense when analyzed using accepted risk/return metrics. Whether the bias is NPV, IRR, or ROI, Ralph is confident that the analysis will stand up to the most demanding critique expected by advisors and their clients.

Back to the relevance of his corporate experience, Ralph looks at family wealth the same as a well-run company. In the affluent client world, we could look at the CPA, the Attorney, the financial advisor, the wealth manager, and now the LTC expert as the families group of VPs, or advisory board of directors, helping the family make sound family business decisions.

If the advisors bring to the board room outdated, unchallenged macro level “conventional wisdom” without looking at the details, they do a disservice to the client. The client and advisors likely will make different decisions when understanding details about long term care risk and the attractive advantage of insurance versus self funded care.