Business Innovators Radio - Interview with Brendon Murphy, CEO and President of Compass Financial Solutions Discussing Long-Term Care

Episode Date: February 5, 2025

As the CEO and President of Compass Financial Solutions Inc., in Havertown, PA, I provide professional expertise in Long Term Care, Business Insurance, Life Insurance, and Personal Pension Fixed Annuities products. I’ve been helping families, individuals, and business owners secure financial peace of mind since 2013.At Compass Financial Solutions Inc., I currently service individuals, families, and businesses throughout the Greater Philadelphia Region, New Jersey, Delaware, North Carolina, Las Vegas, and Georgia.Learn more: http://www.mycfsi.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-brendon-murphy-ceo-and-president-of-compass-financial-solutions-discussing-long-term-care

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with this Brendan Murphy, who's the CEO and president of Compass Financial Solutions, and we'll be talking about long-term care. Brendan, welcome to the program. Thanks, Mike. Hey, I want to dive into this because I know this is a very timely topic and statistics show that many times people think they might not need long-term care, but maybe they do.

So we want to learn all about how you serve your clients and advise them in that. But get us started first with your story and background. How did you get into the industry? So, Mike, back in 2012, I was working in restaurants, actually. And my father-in-law, who was, you know, he was in the business, right? He was in the financial services business. Me and him started talking one night about, hey, maybe we should get lunch and talk about what's going on.

Like, I just had two kids. And we got, I got into the business about 2013 from those conversations. And then since then, you know, going on to take over the business from him because he since retired because he wanted to spend more time with his wife traveling. And I took over to business and kind of how why. I got into one of the reasons was because of this long-term care topic that you actually brought up. My grandmother was in a dementia ward at a nearby hospital. She stayed there for about seven years.

And you only got to see her every once in the blue moon because you didn't always have the visiting rights, right? So when I would go see her, when we got married and things of that nature, those conversations were kind of tough because she would be there for about like two minutes, maybe into the conversation, if at all, right? So we started to start to do that. And then it became important to me to make sure that people had, you know, some type of long-term care in their portfolio to make sure that they had some kind of guaranteed income in their portfolio. God forbid there was some type of event for long-term care. So it really just relates back to my grandmother and my father-in-law. So kind of family got me into what I do today, you know. Yeah, you know, you hear when I ask that question a lot of times, you hear very personal answers.

You know, like maybe, oh, well, like sometimes I'll hear my parents got taken. to the cleaners by some unscrupulous financial advisor. I vowed to never let that happen again. So it's really neat to hear that you had that personal connection with your grandmother and it really just kind of started that fire in the belly to go, I want to learn all there is about it and help other people with it. So let's kind of start with what does long-term care actually mean? What's a definition of it?

What is it a detail? Where do you start that conversation with your clients? Well, it's funny because you think about long-term care. If you think about it before COVID, right? Long-term care, people think about it as they were laying on a table looking up the flas and lights that they saw in movies or definitely commercials or something like that. But since COVID, it's really, you know, you're dealing with home care, right? Yeah. We're talking to, you know, I'm 46.

So I'm talking to people in their 60s who are taking care of their parents and they don't know what to do with them. So usually it's those type of events that bring them to us. Right. So home care of the definition or long-term care of the definition of now is home care. Where do you want to be taken care? of 90% of people say they want to be taken care of in their own home. And normally it's by somebody who's in their family, right, or some type of home care situation. So when we talk to people, the definition of long-term care has definitely changed in, you know, in the last six years at least.

But it's more about home care and the comfortability of the parents explaining to their kids what type of plan they want and what goes on with it. You know, and that's a big point. And when I hear this topic and you you described that it makes me think of something okay yeah great you can take care of my uh parents at their home but are the people constricted to only use preferred providers you know like oh my word i've got to you know talk to this company they're the only ones or is there some flexibility to go not only can you be taken care of at home but you have full control in who the the care is being given to Yeah, you can have full control. Your parents could set it up that way.

They can actually pay you if they have what's called an indemnity long-term care policy. So they can actually pay you for some of your time since you're taking off work, maybe almost leaving work to take care of your parents, depending on what kind of care they're getting, right? Or you can do what's called, you can have somebody be brought in and more of what's called a receipt bill where the home care company gives you a bill. You give it to the long-term care company. they pay that home care company. So it really just depends on how it's set up, right? And those conversations are, we typically check those boxes.

Like, do you have medical power of attorney? Do you have your estate document set up? Have you had that conversation with your kids? We look at that as the biggest check box, you know, the boxes we check. Well, we're sitting down with someone and having that long-term care conversation. Yeah, that's huge. And I think what you described there makes me think. of the word flexibility. You know, it's like you're not constricted to only using this, you know,

provider or going to this facility. You've got flexibility. And to be able to say you could even pay yourself. I mean, that's, that's the ultimate. So let's kind of talk a little bit about when you said, oh, the conversation comes up. At what point would a family think, wow, long-term care? And I've heard like, oh, if you can, you know, do two of these six or what, how does it work to go? now we might need to have that conversation. Well, I think the conversation is to start, you know, when adults are in their 50s and 60s, right? Because they're getting ready to retire. They've made their money.

They have their money in 401Ks, IRAs. And it's probably something they just haven't checked off, but they have to deal with their parents. So that conversation is to start there, right? It's obviously life insurance because it's the long-term care. The earlier you buy it, the cheaper it's going to be, right? nowadays you have different options for paying for it so you want to look at maybe some IRA dollars or if you're using non-qualified dollars it just depends on what you're trying to use okay so there you have those conversations and then you can set a plan at place and you can do it for you can do

traditional you can do life insurance with a long-term care rider you can do hybrid long-term care policies there are annuities with that have ADL benefits if you are sick and you can't actually get a term care policy. So the flexibility, which you spoke about a couple of minutes ago, they're all over the place inside these policies these days. And it just depends on the type of care that they're looking for. Some people, you know, you can have home care, you can have adult daycare, you can have skilled nursing, you can have top of line facilities. If you're looking for 40 hours a week in the state of Pennsylvania, so it costs you $5,500 for the month. If you're at a top of line facility, you're looking $150, $160,000 right now.

Wow, that's expensive. Yeah, exactly. So when we get into that, you know, dementia, Alzheimer's, Parkinson's, you're looking at an average of the eight and a half year stay in some type of memory care facility. Okay. And we're looking at that at 150 grand. You're at $1.1 million. I don't know how many people have $1.1 million laying around if you have a history of Alzheimer's, Parkinson's, or dementia laying around, right? If you don't buy some type of insurance.

And if you did have it laying around, you probably would want it to be used for more than just paying those bills. You'd want it to be used for legacy planning, taking care of, you know, other things. So you made mention of several options. And we don't want to get into the weeds of them, but it makes me realize this. This conversation about long-term care should not be something where you go, oh, let's go Google that. There it is, check, done. No, because there's a lot of factors that go into it. it and I've even heard this, like the traditional kind of long-term care policies out there,

you pay X number dollars for a premium, maybe they can be expensive, but then if you didn't use it one year, two years, three years down the road, those premiums are just gone. So now some of the options out there, like you had mentioned, if you have it, you know, rolled into some of these other products, if you need the long-term care it's there, but if you don't, then it's still building up in that account. So talk a little bit about that approach. Yeah, so you can use these accounts to build, like to keep continuing with interest, right? So if you some people, you know, because they are like, all right, my wife really wants to buy this long-term care policy.

We'll help them establish that long-term care policy, but we'll leave the inflation up into, you know, their money in the market, right? Because what's going to keep place with inflation more than the S&P, right, if you're looking about that way? And then there's other times where it's just one person. It's a mother, it's a father who's lost their spouse. and then what we'll look at is how we can get that policy. And maybe they have an HSA plan that they were lucky enough to have at some point. And they can use those dollars to buy it. But we're looking at it.

We'll put inflation on it so that when we get to that point, it comes, you know, to exactly what they need for that type of policy. And, you know, it depends on savings. So, like, you'll see numbers out there to say 70%. It's 50-50, right? If you have a couple that makes it to, you know, 66 together, you know, there's a good chance. So both of them are going to be together when they're 86. And one of them is going to need some type of care, right? So if you don't have the insurance, right, and we're spending that money, the other spouse is the one that's suffering because she can't or she or he can't take the time to do what they need to do on a daily basis, right?

And it can't be they got 24 hours of care. They're going to go stircreas, right? They still need to go out and have social time with friends. And it's not like they don't love their spouse, but they need the break. They need to go grocery shopping. They need to do all the other things. And if kids aren't close or they don't have kids, there's no one to relieve that time or let them live their life.

Right. So when you use that when you're talking about assets, if you have a million dollars, well, you could spend them a million dollars. And then the other person doesn't have it. Or you have to go to the Medicaid spend down, which you don't really want to go that route. You don't want the government being in charge of your care and spending all in the state of Pennsylvania down to, you know, under $1,900. hours, but you get to keep your house and $126,000 in an IRA.

And that's it for your spouse who could live another 20 years, right? I mean, how many people have you met, Mike, that have lost the spouse and live for 30 more years? Yeah. And also, statistically, don't women live longer than men? So now there's another factor to go into that calculation and planning. Absolutely. My wife's grandmother, her husband died 20 years before she did. And she had a long-term care policy and was in that long-term care facility.

because she lived in Connecticut and everyone else lived down in Pennsylvania in different states. She was in adult daycare and those things for eight to nine years, which was completely paid for because they had bought the policy before. Wow. And I think beforehand, that's the thing that I think a lot of times people like, yeah, yeah, yeah, I'll do that. Someday I'll address that. And it needs to be done well ahead of advance because I think that some of these options and solutions

that you will be explaining to a client might take a minute or two to get set up the right way or funded or whatever the case is. So it's not like, ooh, this is imminent. We're going to need to have this in 60 days. You might have needed it, you know, well ahead of that. Right. If you're going to buy it in the younger days, like we have clients that are in their 40s that own some businesses, right? They're getting it because you can use it for some type of tax deduction. So they're buying it now. They're going to pay it off over 20 years because, you know, they're using a hybrid product, right? So the hybrid product is if you don't use the benefits, you get it back in the death benefit. It goes back to your errors.

So they're buying it earlier. It's less expensive. And it can be fully paid up in a certain amount of time. And then you have that benefit for the rest of their life. You know, if we're using traditional, we're going to use it. We want to buy it earlier because it's going to be the cheapest. And then, yeah, there's going to be increases over time. But that gives you that benefit for that period.

time. And you're never trying to pay for the whole benefit. It's just to take the burden off the family as long as you have that plan. So, you know, when you buy traditional, you want to buy it younger. So if you're not thinking about planning, especially nowadays, because every baby boomer right now is about to turn 65. They're about to hit that Medicare age. And if they haven't thought about it, it's going to be a problem at some point financially for them or their spouse or their family, especially people that, you know, middle class that want to leave their house or something to their kids, like they don't, you know, maybe not going to leave tons of money, but they're going to leave the house. Well, if the house is, you know, you had to use a reverse mortgage on the house to help pay for care,

there's nothing to be left to the grand of kids or the kids, you know. So, for me, there's so many of these variables. Sorry. 100%. Yeah. Have, have enough time ahead to make plans in advance of when you actually need it, but without the pressure and stress. I think that's the kind of thing that a lot of times people are like, oh, just get it done. We need to get it done. Well, if you're under that kind of pressure, you might not make the best

decision. So making sure you've got great input, making sure that you're doing it ahead of time. And there's so many of these options like, well, what if you do have cash or savings? Should you get a standalone? Should you use an annuity? Should you use a permanent life insurance? There's so many of these options. And probably, and maybe my question is this, give an example of how, what if someone has access to some money in a savings account, but then they also have some in a IRA, but then they were considering, you know, setting up one of these other alternatives.

Is there a way to layer in some of this rather than just go get an X type of a solution? Yeah, there's, I mean, even, and you didn't, the only thing you didn't mention is, you know, the inherited IRAs now, right? So if you inherit an IRA from mom and dad, you have to take it over a 10-year period, either all at once, over 10 or at the end, right?

That's a great way to get long-term care, right? If you don't need that cash, because you're still working, that inherited IRA can pay for your long-term care. So that's a gift from your parents if you have that, right? So if you have some cash, you're using an HSA, you can use those vehicles to pay premiums either monthly, quarterly, yearly. Not everyone I see is going to pay a one time because you're rushing into it lump sum because they're at 70s.

years old and they don't know what else to do at that point, right? Because it's going to be a little bit more expensive. But if you're younger, you could pay it monthly. Like you're buying a cup of coffee, right? And it's just an expense that you do every, every month. It comes out of your bills. So as you pay, you pay yourself first, right? If you have that protection plan, build in early enough, later down the road, you won't have to worry as much because you can say to them, I have this policy. I have this buildup. You know? No one likes to pay for home owners insurance or car insurance. until they need it, right? It's the same thing.

And when you get in a wreck, you can't go and say, set me up some car insurance because the car is already wrecked. So once you've triggered the need for long-term care, you can't go backdate it and say set it up. You've got to have it in place. Correct. You need to have something in place and or have some money put aside. I mean, you know, if you look at the numbers, they're saying 250,000, 300,000 for medical expenses when you retire, right? Well, not everyone has that laying around. Right?

Yeah. But if you have a little bit of insurance and you bought it at a time, you can take that number and knock it down. You don't have to have that savings. And then you can live your life, go on vacations, and enjoy what you want. But know that that plan is in place. Yeah. So what do you see when you're working with people that come to you, what do you see some of the biggest mistakes or misconceptions that they have about long-term care? Like I said earlier, they think you're going right into a facility, right?

I think they're missing the fact of what happened during COVID with. with, you know, nursing homes, right? So home care is the biggest, you know, if you say it, I think I've seen a home care agency pop up every three weeks, but you just got to use the right ones. You want to use the ones that are qualified. So the mistakes are not having a plan, right? That's one. It's a 50-50 shot that one of you are going to need care.

And if you're not able to care for the other spouse, you're going to need that help. And it's not always going to be a family member because they're not always going to have the time to do it. it, right? So having a plan is one of those things. And if you think that you can't get long-term care, that's another trap. You could, even if you had cancer, stroke, heart attack, as long as you've been clear for those five years, you can go and apply, right? Or if you have some type of disability, if you have cancer, you could also purchase, like I said earlier, an annuity with some type of ADL benefit. As long as you're not in a nursing home at that time, there are products. There are products, like Spias or they're called the bridge that will bridge the gap and help you pay for that,

you know, for that care for a specific amount of time. So there are vehicles that you can get into that can help you and save you money along the way. So bottom line, don't assume. Check with a qualified professional like yourself and make a plan, make it well ahead of time, make sure you're taking in all these calculations. And if you make that plan and never needed the long term care, wonderful. at least you had it in place. Absolutely.

And then if you choose one of the other plans, it could go back to your errors in the death benefit. It just depends on the person sitting across the table, having the conversation, right? It's always about the conversation. If you don't have the conversation, you're never going to know what could happen, right? Yep.

You don't know what you don't know. And that's the important thing. I think that's really important for people to think about is, you know, When you're limited exposure to these kinds of concepts out there, make sure that you get with the qualified professionals to go, well, in your case, or because what you said in this, let's go ahead and explore this option. So get with people that really, really know what they're doing so that they can provide options for you. That's really, really powerful. Well, thank you so much for clarifying this, Brendan.

If someone is interested in connecting with you and reaching out and learning more, what's the best way they can do that? So they can call at our office at 610-449-99-100. They can take a listen to our podcast, that Compass Wealth Conversations on I-Heart and Spotify, where they can reach out the website at mycfSI.com. Excellent. Well, thank you so much for coming on. It's been a real pleasure talking with you. Thanks, Mike. I have really enjoyed it.

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