3 Tips on How Reverse Mortgage Originators Can Approach Financial Planners

Making solid connections with Certified Financial Planners (CFPs) is becoming increasingly important for a growing number of reverse mortgage originators, due to the ability of financial planners to serve as reliable referral partners in finding new clients that can potentially become borrowers. While some originators don’t necessarily see the total value of appealing to CFPs in their own course of business, it can be a worthwhile exercise as long as the task is approached in the right way.

This is according to a panel of sales and reverse mortgage professionals that took place at the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting in Nashville, Tenn. in November.

Emerging from the larger discussion were tips that reverse mortgage originators can potentially take to their financial advisor contacts when seeking to make solid connections with them.


Avoid the obvious approach

One of the more common ways that financial planners are approached in general revolves around math, since many assume that it will be the proverbial “first language” that advisors speak in trying to understand how some financial product or tool can benefit them or their clients. This may not be the case according to Ryan Ponsford, strategic business specialist at American Advisors Group (AAG).

“We tend to approach financial advisors with math, but you have to ask yourself: how often do people make decisions on math?,” he says. “The bigger the decision is, [the more that] emotion has a tendency to drive the outcome. What’s interesting is the emotional side of the conversation. What we’ve seen is that it’s not always a matter of convincing people with math, so we need to get out of that product/transactional world.”

It’s also worth remembering that not all financial advisors operate in the same way, or even in the same financial arena, he says. Doing some homework ahead of time to determine the type of financial professional you want to seek out for a referral partnership can make a big difference in ultimately making the connection that you, as a reverse mortgage professional, want to make.

“There are a lot of financial professionals out there,” Ponsford says. “Understanding the business of financial advice can narrow down the type of financial advisors you can go after.”

By that same token, a lot of active reverse mortgage professionals are also so well-trained in the field of coming to the defense of reverse mortgage products that they can prepare for something of a confrontation when that may not even be necessary in the first place.

“Many reverse mortgage professionals feel like they need to litigate on behalf of the reverse mortgage product,” he says. “But by instead offering experiences for what has helped people, that can potentially illustrate the abilities of the product to financial advisors [in a more efficient way].”

Speak in terms of reverse mortgage features

Framing issues for financial advisors around how they can best mitigate losses to the portfolios of their clients could be key to encouraging them to take a look at how reverse mortgages could be of use. This is according to Stephen Resch, VP of retirement strategies at Finance of America Reverse (FAR).

“The key that hooked me on the reverse mortgage industry, as a financial advisor, was the ability to have access to an additional $100,000-$300,000 to help make sure a client doesn’t run out of funds,” Resch says. “77% of retirees’ net worth is tied up in their home’s equity. Incorporating home equity can help improve cash flow, and can be key to help address monetary flow concerns.”

Also relevant to potential conversations with financial advisors is the idea that they may not be taking advantage of a client’s full portfolio of assets, according to Ryan Ponsford.

“Financial professionals are hit daily with annuity salesman and other people selling financial products,” he says. “Why design financial plans with only 23% of somebody’s assets? If you’re a holistic planner, why are you leaving out so many assets?”

Because of that, effectively communicating the potential benefits of three key reverse mortgage features can make a big difference when trying to make headway with financial professionals: the HECM line of credit growth, supplementing the cost of in-home care and optional mortgage payments working in concert with the line of credit.

“For the HECM line of credit growth, we have to articulate it since it can solve many problems once people grasp how it works,” he says. “In terms of supplementing in-home care, [it is often] the greatest risk most people face, and this is on advisors’ minds. For the optional mortgage payments, we’ve missed the boat in letting people know that payments are optional, and all it will do is extend credit facility.”

Have a strategy, remain persistent

Like many aspects of business, going into a meeting with a potential referral partner will benefit from understanding who you’re about to speak with, and having a plan for best ways in which you may be able to connect with them. This is according to Shelley Giordano, Founder of the Academy of Home Equity in Financial Planning at the University of Illinois. One critical aspect of planning can rest in leaning on the right kinds of materials to substantiate the potential benefits of reverse mortgages to CFPs, having a strategy oriented around that kind of published material to add credence to any reverse mortgage-related discussions.

“Luckily over the last few years, we’ve been drawing in some great minds who have really helped to create the story for [originators],” Giordano says. “How much more relevance or credibility will you have if you start a conversation with an article from Jamie Hopkins from Forbes?”

Approaching your pitch with a strategy, and having a series of articles from financial authorities like Carson Group’s Jamie Hopkins or Dr. Wade Pfau can make a demonstrable difference in your ability to appeal to CFPs, Giordano says. The approach, however, should not be expected to be instantaneous.

“You should have 12 articles,” Giordano advises. “Then, go into these designation websites and figure out [which financial planner] you want to influence. Make a commitment to engage a minimum of 12 times, once a month. Not just with an email, go into their office and bring some of these articles. You’re bringing these financial advisors into a world they know nothing about.”

When the reverse mortgage business was active in larger institutions like Bank of America or Wells Fargo, the environment was far friendlier than it is today, Giordano says. Going into the offices of financial planners can sometimes be more hostile, so knowing what you’re up against as a reverse mortgage loan officer can better prepare you for the interactions ahead.

“You have to influence [the advisors you speak to],” she says. “You have to woo them to your way of thinking, and it will take time to do that.”

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  • Good article and many good tips from Shelley Giordano, there is no doubt Shelley has the expertise to advise as well as to be listened to.

    In addition to what Shelly has suggested, I have found that to many originators approach financial planners like a sales person, wanting right off the bat to understand the reverse mortgage product and try to sell the planner on how much of an asset the reverse mortgage can be to their clients.

    I have found this to be definitely the wrong approach! Go in, approach the financial planner in a way that you have products that may be very conducive to their business and a great benefit to their clients. However, in your approach let the financial planner know that you are there to learn and understand his or her business and the type of client they deal with. Let them know before you start pitching your product you want to make sure you can be a good fit for his or her business.

    Yes, go in prepared with the proper material as Shelly pointed out, but also be humble, understand your potential business partner first. You will not only receive more respect from the financial planner with this type approach, but ultimately, you may eventually wind up with a solid long term business partner!

    There are many other areas I can go over with you through my own experience, but for now, I hope everyone has gotten my initial method of doing business the first time with the financial planing community.

    John A. Smaldone

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