When it comes to marketing reverse mortgages, celebrities have been the dominant vehicle to deliver the message to the masses and if it’s working, why change? But with market penetration for reverse mortgages estimated to be around 2% of the eligible population, some feel the need for change couldn’t be more clear.
“The message in reverse mortgages has not changed over the years,” says Peter Klamkin, Vice-President of Affinity Marketing for Legacy Safeguard. After spending years in the reverse mortgage industry, he sees an opportunity to have a different conversation with potential consumers.
“We talk about family values, personal history, being remembered, and leaving a lasting legacy,” he says of his current company. “Our livelihood of selling insurance has not changed at all, nor has the product, but our selling approach has.”
Legacy Safeguard is a comprehensive network of services that are offered primarily through insurance companies like Mutual of Omaha, AEGON, but also sees an opportunity to work alongside reverse mortgage lenders. “For a reverse lender, offering Legacy Safeguard, or a prescription benefit card, or something which keeps a name in front of a senior, builds a relationship, increases referrals, and softens the blow from having a monthly servicing charge,” says Klamkin.
By working with Legacy Safeguard, lenders can provide access to legacy planning software as well as discounts to major retailers and have a different discussion with customers.
Talking to Jean Noble, one of the people behind the development of the Senior Lending Network brand and a consultant to the industry, the problem is that the industry lacks marketing imagination and originality. “HECM loans are mortgages of last resort because we market and advertise them that way,” she says. “It is the virus that runs through the marketing and advertising veins of our industry.”
Reverse mortgage originators might not like the fact that celebrity spokespeople are driving many of the brands in the industry but Noble thinks this is part of the problem.
“To this day one can still read HECM originators calling former Senator Fred Thompson and Robert Wagner “shills” because they actually have the nerve to earn compensation from providing their image and voice to promoting and explaining reverse mortgages,” she says. “Yet it is the imaginative celebrity marketing of Senior Lending Network that helped elevate our product to the heights we saw in 2005-2008.”
With a new product like the HECM Saver – which is being described as a way to reach past the needs borrower – it could be the opportunity the industry has been waiting for to re-invent its approach.