AAG Rebrands as a Retirement Solutions Provider, Rolls Out New Selleck Spot

Following months of signals, American Advisors Group late last week announced a major shift in the direction of the company, which will see it transform from the nation’s leading reverse mortgage lender to a more holistic retirement solutions provider.

Reza Jahangiri, the chief executive officer of AAG, said the company rolled out the “What’s Your Better” campaign, a brand-new ad featuring current spokesperson Tom Selleck that aims to change the conversation around using home equity in retirement.

“Whereas before our pitch spoke directly to those seeking more financial stability, we are broadening our appeal to anyone who can envision a better retirement,” Jahangiri wrote last week in an e-mail to employees that was obtained by RMD.

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A spokesperson for AAG declined to provide additional comment on the e-mail, and indicated that a more formal announcement regarding the rebrand is currently in the works.

The campaign’s message is meant to be more aspirational and product-agnostic, a change in messaging for the nation’s leading reverse mortgage lender at a time when the industry is grappling with lower volume.

Last month, the reverse mortgage industry endorsed just 2,838 units, the lowest number since 2005, according to data from Reverse Market Insight. While overall industry volume is down 4.5% year to date, AAG has only seen its influence grow: Despite AAG’s endorsement numbers being down 12 units compared to last year, the company’s share of the market has jumped to 25%. The next largest lender in terms of market share is Finance of America Reverse, which has a 9.8% share of the loans endorsed year to date according to RMI.

‘Better’ messaging

AAG’s most recent television spot shows longtime spokesman Selleck addressing an empty theater, asking retirees to consider what their “better” retirement might look like — including home upgrades, cash to pay off credit card bills, or just extra money to spend.

“If you’re retired, or even still working, what would change your ‘just getting by’ to better?” Selleck asks in the advertisement, which doesn’t mention the term “reverse mortgage” until about midway through its two-minute runtime.

“Whatever it is, your home’s equity could make your better a reality,” he says. “Makes sense to me.”

As those who follow the industry know, AAG’s shift from a reverse mortgage lender into a retirement solutions provider has been in the works for some time. At the end of 2017, Jahangiri said the company didn’t want to only be a reverse mortgage lender, and earlier this year it announced its expansion into the traditional “forward” market as part of that transition.

The Orange, Calif.-based firm also rolled out a real estate brokerage last fall, which AAG pitched as a way to capitalize on the hundreds of thousands of leads it receives each year — only a small portion of which ever turn into Home Equity Conversion Mortgage customers.

“AAG gets thousands of calls each day from seniors wanting to make a change — many wanting to sell their home,” the company noted on the website for its brokerage arm. “These leads consist of older adults that have exhausted other financial options and considerations, ultimately wanting and ready to sell their home.”

In the most recent announcement to employees, Jahangiri stressed the company is proud of its history and remains committed to AAG’s position as the leader in reverse mortgages.

“The goal is to build on that strength to transform our brand into one that helps even more seniors use their home equity to Retire Better,” he wrote in the email.

The opportunity to help seniors access their home equity to help fund retirement remains large. According to the National Reverse Mortgage Lenders Association’s quarterly home equity index, which tracks the amount of housing wealth for older Americans, the demographic had $6.6 trillion in home equity at the end of 2017.

For a country where 41% of baby boomers aged 55 to 64 have no retirement savings at all, it’s hard to argue against the need for new tools to help older Americans tap their home equity.

“As we continue to introduce new solutions and grow our other business lines, we’ll further broaden our messaging to integrate those new offerings,” Jahangiri wrote in the email.

Written by John Yedinak and Alex Spanko

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  • Who can reasonably and rationally dispute the existence of the financial need of retiring Baby Boomers and that one very possible solution to their cash flow needs is the HECM? Yet an enormous chasm exists between the need and the use of this unique solution.

    For well over a decade since joining the industry in late 2004, the education theme has been played again and again with the same message that the chasm exists because of a lack of education on reverse mortgages. Back in 2004, neither Mr. Robert Wagner nor Mr. Tom Selleck had done a single TV spot on reverse mortgages; yet our per originator HECM production is lower today then over a decade than in 2004.

    When the opportunity came for a massive education campaign in the last five years, the lenders who once agreed that education was the most crucial issue found last minute priorities that blocked their participation in that campaign.

    With the number of Case Number Assignment lower than 2,900 for the month of June 2018, is it any wonder that the more successful lenders are now searching for more fruitful endeavors while not abandoning their reverse mortgage operations? However, no longer will HECMs be the primary focus for these lenders. Will the industry suffer some as a result? There is no question it will.

  • I feel AAG is going about it the right way. Our product serves many different needs than it did in the past. Don’t get me wrong, the HECM and the Jumbo proprietary product can still fill the needs of the past to those who qualify!

    The important thing we have to look at is the new marketing track the industry needs to take to be successful again.

    As many of you know, I feel very convinced we have a great chance to re-bound and save the reverse mortgage from becoming a secondary product to companies in the industry today!

    We have to get out of the negative pool, go after different markets, be creative, target a different type borrower, work harder and smarter. Some may disagree with that statement I just made, but who has a better idea to excel forward?

    John A. Smaldone
    http://www.hanover-financial.com

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