For decades, the Deferred Management Fee (DMF) has been the foundation of retirement living. But according to Anglicare CEO Simon Miller, its time is up. The future, he argues, is private aged care – and he’s already betting Anglicare’s growth on it.

Speaking at the DCM Group’s Ask the Visionaries Anything breakfast in Melbourne last week, Simon revealed how Anglicare has adapted the LDK Seniors’ Living model into two of its established communities, with plans for two more within the next year.

From exit fees to membership fees

Instead of the traditional DMF structure, the model is underpinned by a transparent membership fee. Residents pay upfront on entry. Their monthly fees are fixed for life. They know exactly what they’ll get back when they depart. All capital gains are retained by the operator.

In return in a village of around 420 units, Simon says Anglicare will employ roughly 200 staff, including significant care and hospitality teams, available 24/7.

And the economics stack up. Staff utilisation lifts from the low-to-mid 70s under traditional home care to around 85% under this model, dramatically boosting home care profit margins.

Residents see the value too – 80-95% are opting to pay upfront, even as apartment prices climb 15-20%. Demand isn’t falling, it’s surging.

Anglicare’s sales team isn’t selling real estate anymore – they’re selling private aged care. And it’s what customers want.

Demand proves the point

LDK has been proving the model since 2019 at Greenway Views in Canberra. Its latest project, Amberfield, sold down without spending a dollar on marketing. Consumers understand the offer, they trust it, and they’re willing to pay for it.

As Simon told the audience, this is the future. The DMF model will not carry the sector forward – and private aged care is already reshaping the market.

The only question left for operators is: will you make the shift – or be left behind clinging to the DMF?