FPA Chair: Reverse Mortgage Refinements Make Products Easier to Recommend

The evolution of the reverse mortgage product space has been a constant reality that the surrounding industry has had to contend with for many years, but having gone through such demonstrable and customer-focused periods of change is exactly what has made reverse mortgages more appealing for financial planner professionals.

This is according to Evelyn M. Zohlen, Certified Financial Planner, founder of Inspired Financial and chair of the Financial Planning Association (FPA), in the latest episode of The RMD Podcast. After serving time as an intelligence officer in the U.S. Air Force, Zohlen’s interesting career path led her to finance, and ultimately into a leadership position at FPA, which recently engaged into an educational partnership with Finance of America Reverse (FAR).

Reverse mortgage viability enhanced by product evolution

Shortly after earning her CFP designation in 2003, one of the very first clients that Zohlen provided assistance for was a senior couple whose resources were being quickly depleted. Without adequate savings, the biggest resource they had access to was their home.

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Evelyn M. Zohlen

“So, one of the first deep dive planning projects I did involved a reverse mortgage,” Zohlen tells RMD. “And this is in 2003, so think about the evolution of the reverse mortgage space and product availability in the last 17 years. They were pretty clunky back in 2003.”

That “clunkiness” and complexity in the early 2000s naturally led Zohlen to try and find a better solution for these clients, but after looking at an abundance of different options, it became clear to Zohlen that a reverse mortgage was likely the product best suited to provide them with much-needed financial assistance.

“I wouldn’t be honest if I didn’t say I looked for any other solutions for this client,” Zohlen says. “But at the end of the day, this was the right one that was available to them. And so, I stepped with them through the process. It was incredibly complex, it was very challenging for them to understand. And for me, even as a professional planner, [it was very difficult to] to navigate. We got them there and they were very happy with the end solution, but it was a difficult process.”

Now, however, the reverse mortgage product concept has endured a series of major changes that have made the product an easier one to both navigate and recommend, she says.

“The last 17 years have brought pretty significant changes In the reverse mortgage and home equity spaces in some really positive ways,” Zohlen says. “There have been bumps in the road on that journey, but I would say in the past five years we have seen more positives than bumps.”

Some of those positive outcomes include a greater degree of transparency surrounding the product, and a greater understanding around the cost, usage and application of a reverse mortgage in someone’s financial situation.

“There’s also been a better understanding of how a reverse mortgage does not have to be the solution of last resort, but may actually help the client if it’s incorporated into their planning process earlier,” she says.

Big things ahead for FPA/FAR partnership

In terms of the recently-announced partnership between FAR and FPA providing educational materials to planners about reverse mortgages, Zohlen doesn’t think that such a partnership could have happened 10-15 years ago, again owing the evolution of the product class as something that has been instrumental in facilitating this partnership between the two entities.

“The Financial Planning Association partners with like minded entities whose passion and interest is also around elevating the financial outcomes of clients,” Zohlen says. “And so, that has been an important touch point for FPA in determining when it is appropriate to partner up with an entity.”

However, in identifying FAR as a reverse mortgage subject matter expert, FPA found an ideal like minded organization once the reverse mortgage product threshold evolved into its current place after a series of regulatory changes.

“[Those changes made it] a lot easier for FPA then to identify, speak with and partner with an entity that is an expert,” Zohlen says. “[One] that has a lot of knowledge around this, that is like minded regarding caring for clients and helping planners do the best job they can in serving their clients. And so, I’m not sure that it could have happened 10 or 15 years ago without the changes that we’ve seen in the reverse mortgage space and in those regulations. But happily, we’re here, and that has happened.”

Speaking in her capacity as the chair of the FPA, Zohlen describes a mutually beneficial partnership that will potentially be mutually beneficial in terms of getting more clients the financial help that they may need by expanding planners’ proverbial “toolboxes,” she says.

“FPA is elated to be in this partnership with FAR and is excited about the opportunities it will afford our members to become more confident in including reverse mortgages as part of the tools in their toolkit,” Zohlen says.

Listen to the full interview with Evelyn Zohlen in the latest episode of The RMD Podcast, available now.

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  • It is too bad the article did not bring out which changes Ms. Zohlen was referencing. That would have been helpful in reaching out to other CFPs. No doubt despite its inherent problems, one was likely financial assessment. Yet why would that be so important if the CFP were a responsible planner as the overwhelming majority of CFPs are.

  • Excellent presentation Evelyn Zohlen. Also, thank you for your service to our country from one Air Force veteran to another.

    The points brought up by Evelyn and the examples covered over the past 17 years were excellent. Excellent in so as far as emphasizing the importance the reverse mortgage can play in the financial planning world.

    However, I will have to agree with Jim Veale, the article did not bring out precise changes that Evelyn was referencing. Also, the matter of financial assessment, which is an extremely important change that has occurred in our industry was not brought into play!

    Here again, these areas may not have been what Evelyn Zohlen was planning to bring out.

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

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