Reverse Mortgage Lenders See Signs of Success with Financial Planning Partners

Recent reverse mortgage reports in financial planning trade press are already beginning to help some lenders generated new business.

A stark departure from headlines of the past, recent coverage has touted the use of reverse mortgages as a sound retirement planning tool. A Journal of Financial Planning article published in March and an Financial Advisor magazine article that followed highlighted the use of the reverse mortgage Saver product and demonstrated the way in which a reverse mortgage can be used as an alternative to drawing down on other forms of investment.

From one financial planner to another, the message is now beginning to ring true for reverse mortgage originators.

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Financial planners are beginning to come around, says Owen Coyle, reverse mortgage specialist with Reverse Mortgage West, who already has seen a loan close based on a referral made following the financial planning research.

“One of the financial planners that I have a working relationship with gave me a referral that resulted in a Reverse Mortgage loan,” Coyle says. “And three others emailed me to give them the contact information so they could take the [continuing education] course about Reverse Mortgages.”

Coyle says when he sees financial planning coverage, he sends it to a list of two dozen financial planners in an effort to continue the referral relationships.

Working with financial planners is not a new concept, by any means. But the nature of the conversation has already begun to change, says Mike Gruley, of 1st Financial Reverse Mortgages.

“We’ve been telling financial planners about reverse mortgages for years,” Gruley says. “They typically said: ‘We don’t need them.’ For most, it’s just somewhere they didn’t think to go before.”

The message changes completely, however, with industry members speaking to one another about reverse mortgage products, rather than those in the industry trying to spearhead conversations with those same financial planning naysayers, he says.

“When the article came out in the Journal of Financial Planning, rather than for me to say ‘look at this,’ I’m saying, ‘look at what you guys wrote. These are not my words, they are your words,'” Gruley says. “All of a sudden, it’s starting to glow a little. I think that’s the beginning point.”

Written by Elizabeth Ecker

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  • Reverse mortgages appear to be going mainstream.  Greenlight has a financial planner as their spokesman.  Plus, I attended a Merrill Lynch seminar on reverses and another one sponsored by Primerica.  Seems like having an expert tout the reverse is better than having an actor or a politician pitching it.  The jury is still out, but I’m seeing a trend of “expert advice’ becoming more prevalent.   

  • On more than one occasion financial planners told me they would never recommend a reverse mortgage for fear that the person could run out of money later in life and blame him.  When I asked if he’s been able to make sure that ALL of his clients have enough money to live comfortable the rest of their days he of course said “thats impossible to know”.  I said, “I rest my case” and excused myself from the meeting.

    So instead of arguing the point with them, trying to gain the upper hand isn’t something I will expend my energy on.  Instead, when they do express interest I know there’s a possibility of having a referring partner (both ways) and the newest info surely helps.

    • Depending on their potential legal liability, different types of financial advisors will respond very differently.  

      On a different issue, I also know a CPA who wants to recommend HECMs but because his client base is employee benefit plans, he is very concerned about being identified with any recommendation that might ultimately result in a retiree being foreclosed on.

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