Reverse mortgages aren’t the same loans they once were. Program changes in recent years have given new life to Home Equity Conversion Mortgages, reshaping them into practical retirement planning solutions designed to meet more sophisticated needs than their previous “loan of last resort” reputation would allow.
But while this newfound potential requires a revamped marketing message to better emphasize the HECM product’s use in modern day financial planning, this doesn’t necessarily mean that the industry’s preference for celebrity spokespeople is a thing of the past.
The implementation of the Financial Assessment in April 2015 was a watershed moment for the reverse mortgage industry. Since April 27, 2015, the HECM program has been riding a wave of positive media attention, with the spotlight now casting reverse mortgages as sensible products in the retirement planning tool belt, instead of risky debt instruments that open the door to possible foreclosure.
Recognition from the financial planning and academic communities reinforced this new and improved HECM messaging through various research articles demonstrating the material advantages of using housing wealth as part of a coordinated retirement strategy.
As the reverse mortgage industry makes a push to drive its financial planning relevance into the public consciousness, it makes sense that the industry’s largest and most active marketer would adopt this new approach for their national ad campaign.
‘New’ product, new message
Although reverse mortgages are not necessarily new products, in the past year they have adopted a refreshed and more welcoming usage within the context of financial planning. This is creating new growth opportunities in terms of the target demographic this new messaging is attracting.
Reverse mortgage leads can now be broken down into two distinct categories: pay-off-debt leads and financial planning leads. Although reverse mortgages appear appear to be undergoing an image change, there will always be seniors who need to pay off debts and get out of financial stress.
“It has always been the Holy Grail to go after financial planning leads, but they are more of a slow burn,” said Teague McGrath, chief creative officer at American Advisors Group (AAG). “They don’t have to do a reverse mortgage right now—it’s not an immediate need. In this demographic is where the growth opportunity lies.”
Because this target borrower doesn’t have the same urgency as their peers who are looking to settle debt with a reverse mortgage, McGrath says lenders need to create a response with their marketing message.
Last month, American Advisors Group (AAG) unveiled its newest television commercial, a 120-second spot that shows how reverse mortgages are becoming widely accepted by academics and experts as a versatile financial solution to help seniors achieve retirement security.
The new commercial marks several firsts for AAG. Not only is it the first TV ad that doesn’t feature long-term company spokesman Fred Thompson, who passed away last November, but it is also the first time AAG has called upon academics to espouse the reverse mortgage product on camera.
“The Financial Assessment has made it a priority that we move in this direction,” McGrath said. “We, as an industry, can’t survive on the pay-off-debt messaging forever.”
AAG is encouraging any academic that has explored reverse mortgages, whether through white papers or research, to go to conferences and other senior events to talk about HECMs in a positive light in terms of financial planning.
“People that have a Ph.D and academic background—those who don’t have a commercial interest in the HECM program—drives a lot of credibility,” McGrath said. “If they say a reverse mortgage is viable in a retirement plan, that certainly goes a long way in the conversation.”
AAG plans to continue down the path of marketing reverse mortgages with a retirement planning focus, and McGrath says there is a good possibility the company will feature more academic expertise and maybe even financial advisers in future TV spots.
Although financial planning appears to be the new focus for marketing reverse mortgages, does this mean that advisers and academics will finally replace aging actors as brand ambassadors of the HECM product?
A certain level of credibility
The reverse mortgage industry has seen a number of famous spokesmen in its history, from earlier champions of the HECM product like Robert Wagner and Jerry Orbach, to more recent celebrity pitchmen like the late Fred Thompson and Henry “The Fonz” Winkler.
Actors, while they might not be the most qualified to discuss complex financial products in a thirty-second TV commercial, can lend a certain degree of credibility that experts and academics may lack.
Take the industry’s newest celebrity endorsement, Danny Glover, who recently signed on to be the face of USA Reverse, an online lead generator that aims to educate seniors on reverse mortgages and help them find a lender once they’re ready to move forward with a HECM.
Perhaps best known for his acting career, Glover, age 69, maintains an even more illustrious reputation as a human rights activist and humanitarian. For USA Reverse, which prides itself on being an educational resource for seniors and their families above all else, these characteristics were essential in choosing a spokesman.
“What we are aiming for is to really put forth an image that brings trust and credibility to the screen,” said David Villarreal, corporate advisor at Affinity Partnerships, LLC, the Pocatello, Ida.-based company behind USA Reverse.
Aside from acting, Glover has been active in several philanthropic endeavors, including serving as a Goodwill Ambassador for both UNICEF and the United Nations Development Program, as well as being a member of the Board of Directors for the Center for Economic and Policy Research.
“Our objective is to bring a more heightened awareness of the value and benefits that can come from a reverse mortgage to consumers,” said John Alexander, Affinity Partnerships president and CEO. “When you find the right type of individual who is of the appropriate moral compass, like Danny Glover, who says here is some high level information about what a reverse mortgage can do for people in general—if you are one of those individuals who could benefit from a reverse mortgage, you may want to explore it.”
USA Reverse has yet to launch a nationally televised ad campaign touting its services to the masses, but Affinity Partnerships says it does have footage in the works. The key theme in this messaging is “knowledge is power.”
“Our motivation is to energize people into learning more about reverse mortgages—not only seniors, but their children and other family members as well, because they may have heard things that aren’t necessarily fact,” Alexander said. “At the end of the day we want to knock down the barriers that keep people from learning more.”
Marketing reverse mortgages is all about gaining the credibility and trust of the target consumer. If the best reverse mortgage spokespeople are professionals who don’t have a commercial interest in the product, celebrities may actually have a leg-up on advisers or other financial professionals.
When you have somebody who is a financial adviser or a mortgage professional trying to tell you something, it could be easy to assume that they are trying to sell you something and that they may not have your full dedicated interest at heart, Alexander said.
On the flip side, some consumers may be naturally skeptical of any celebrity trying to sell them anything that isn’t acting lessons.
So while financial advisers, academics and even famed Hollywood actors all bring their own varying degrees of integrity to the table, effectively promoting reverse mortgages really comes down to one thing: building trust through education.
“It’s not about a celebrity versus an academic or anyone else,” says McGrath. “It’s about gaining the credibility and trust of the market you’re appealing to. It gets you a long way if you have someone they can trust making a positive message.”
This edition of the RMD Report is sponsored by national appraisal management company Landmark Network.
Written by Jason Oliva