A major factor in deciding to move into a continuing care retirement community (CCRC), also called a life plan community, is security. Residents make a significant financial and emotional commitment, expecting a reliable continuum of care if their needs change. Prospective residents want assurance that their investment is secure and that the community will honor its promises—ranging from long-term care services to timely entry-fee refunds.
Last Wednesday I participated on a panel at a biannual CCRC conference hosted by actuarial firm A.V. Powell and Associates. The event was held virtually this year. The panel focused on how to communicate actuarial results and financial projections to current and prospective residents in a clear, transparent way.
My assignment was to explain why a CCRC’s financial solvency matters for sales and marketing. I’ve written about this before, but with the conference fresh in mind I wanted to revisit the topic. The summary below captures the key points I presented on the panel.
The importance of sound finances
Financial stability and successful sales and marketing are closely linked. Staff should be able to speak confidently to prospective residents about the organization’s commitment to financial health. More than confident statements, communities should provide concise, accessible materials that make financial information easy to understand.
Today’s prospects are more self-directed than ever; many will conduct extensive research and comparisons before making a decision. Communities that make due diligence simpler become trusted resources. Rather than relying solely on audited financial statements—which can be opaque to non-experts—consider offering a one- or two-page summary of key financial indicators. This summary can also live on the community’s website.
Solvency disclosures should include both qualitative and quantitative information. Qualitative details might highlight board diversity (professional, racial, ethnic), management experience, and executive tenure. While these elements don’t directly prove solvency, they help signal whether the organization has the governance and leadership that support long-term stability.
Quantitative metrics should be limited to a few clear data points that provide a balanced view of financial health. Useful examples include debt service coverage ratio, net operating margin, net assets, and results from recent actuarial studies. Actuarial results are particularly important because financial ratios show current standing but may not reflect an organization’s ability to meet long-term liabilities and resident-related obligations.
Each metric should be accompanied by a plain-language explanation and, where helpful, industry benchmarks for context. This allows non-accountants to interpret the data and compare the community to relevant standards.
>> Related: Evaluate the Financial Viability of a CCRC With Our Free Guide
A unified sales and finance team
Many sales and marketing professionals at CCRCs may feel uncomfortable discussing financial details. That’s understandable, and it underscores the need for close collaboration between finance and sales teams.
The finance department should equip sales staff with enough understanding to have high-level, accurate conversations with prospects and provide clear supporting materials. Finance should also be available to meet with prospective residents who have detailed questions beyond the sales team’s scope. This collaborative approach builds credibility and trust.
>> Related: How Financial Confidence Impacts Your CCRC Decision Process
Always prioritizing residents
Financial decisions should prioritize residents first. This is not a criticism of bondholders or investors—who play an important role—but a reminder that choices harmful to residents will ultimately harm the organization and its financial partners. Management and boards should evaluate decisions by asking, “Will this be good for our residents?”
Residents are a community’s most valuable advocates. When financial policies and decisions support resident well-being, satisfied residents are far more likely to recommend the community to others. Conversely, decisions that put residents at a disadvantage will erode trust and reduce referrals.
Transparency, prudent financial planning, and clear communication between finance and sales help create confidence. When prospects see a community that consistently prioritizes residents and demonstrates sound fiscal management, they are more likely to feel secure making a life-changing commitment.