Top Tips for Reverse Mortgage LOs Targeting Financial Planners

Reverse mortgage professionals may slowly be making inroads with financial planning contacts, but the industry agrees there’s still work to be done.

Toward that end, there are several best practices originators can rely on to help forge relationships with financial planners, says one planner who is knowledgeable about the reverse mortgage product and is supportive of incorporating home equity-tapping tools into retirement plans.

Leading edge, not bleeding edge

Among the first bits of advice is the idea that it’s fine for originators to be on a leading edge of ideas and concepts, but not on a “bleeding edge,” which is more reliant on untested ideas, says Curtis Cloke, CEO and founder of THRIVE Income Distribution System, content expert on retirement planning and adjunct with the American College of Financial Services.

“Even if they’re with a firm that maybe you believe has turned a corner on this issue of allowing them to provide advice in their job and work as a fiduciary, talk about the non-confrontational strategies and uses, and the proper fact patterns that apply that are non-arguable,” Cloke said in an interview with RMD. “Let’s not get so aggressive that we get to that bleeding edge, or we seem too slick. I think that advice will pay huge dividends in terms of moving the needle on the ultimate goal of impacting as many people as we can possibly impact collectively with the use of these tools.”

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One example of a “bleeding edge” belief is that some reverse originators maintain that a HECM line of credit is something that can work for everyone. Even if they may be able to competently argue that belief, Cloke still advises originators to steer clear of it.

“Whether [that’s] factually true or not, the reality is that you’re not going to win a lot of brownie points saying, believing, or implying that. You can’t force that down the throats of advisors,” Cloke said. “So, let’s just talk about the basic essence of the use of these things that are clearly in the fact pattern that’s in the best interest of the client, that won’t be argued by liability companies, and let’s make sure that we don’t ever cross over using those dollars in a way that they’re not intended, such as in an investment product or life insurance product.”

Keeping conversations with a potential financial advisor contact focused on basic forms of the reverse mortgage is not on that “bleeding edge,” and is more squarely focused on fact patterns that anyone can point to, Cloke believes.

Focus on the basics

Trying to sell an advisor on a reverse mortgage based on what it can do, as opposed to what it’s primarily designed to do, could also turn advisors off, Cloke says.

“If we exploit the system for what it can do, and we’re always pressing it against the envelope of what it can do, we may actually have regulations just by mere funding ability,” Cloke shared. “We may harm a reverse mortgage as a viable funding mechanism of the federal government by exploiting every possible solution, even those that don’t necessarily feed those that really need reverse mortgages as a solution.”

The way to get around this is a focus on the basic tenets of the product, Cloke said.

“I’m an advocate for just getting back to basics, and looking at the people that can really be helped by this, and making sure that advisors have the privilege and understanding of what they should and shouldn’t do in giving advice, and I think that’s where we’re going to get the greatest momentum,” he said.

“An originator will have the greatest influence and impact once they identify a group of advisors that are fair targets for them to reach out to.”

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