Considerable discussion was had on the future of the DMF. The consensus was that the traditional model, where the DMF was designed to give the developer a postponed profit to allow them to charge a lower entry fee, is alive and very well. It was described as having good harmony with the needs of older people. The criticism that has evolved in recent times comes from new entrants that have ramped up the entry fee while still charging the same exit DMF, which was termed a short term accounting play rather than the actions of an operator who intends staying in the business for the long term. The prediction was that these short term operators will not be in the market for much longer and the problem will largely resolve itself.
Derek McMillan pointed out that 2/3s of new business comes from village resident referrals and this source will dry up if entry fee and DMF are out of alignment.
