Mutual of Omaha Expands Financial Planning to Include Housing Wealth

Insurance services provider Mutual of Omaha has expanded the scope of its needs analysis software, Navigator, to encompass a client’s housing wealth situation into their individual profile. This is a move which will allow financial advisors to get a fuller understanding of a client’s situation by including housing wealth in their advisor/client conversations, something which has long been advocated for by the reverse mortgage industry.

Including housing wealth will also allow advisors to have deeper conversations with clients about what their financial needs and options are based on their level of housing wealth, and the concerns they have related to their own finances’ potential effect on the client’s family or applications toward retirement planning, while also presenting synergistic opportunities between the advising and mortgage arms of the company in appropriate and compliant situations.

‘House rich, cash poor’

The increasingly common dynamic of seniors having housing wealth they cannot employ due to its illiquid nature is one of the reasons why financial advisors must take the home into consideration when assessing a client’s financial situation, and this new step from Mutual of Omaha aims to do exactly that. This is according to Shelley Giordano, director of enterprise integration at Mutual of Omaha Mortgage. It’s also hoped that other advisors will take notice of this direction


“This initiative is not just limited to reverse mortgages,” Giordano told RMD. “It’s an approach to giving the advisors the confidence and the awareness to start having conversations about home credit finance decisions, because it’s the one of the most important decisions that most people make.”

It’s hoped that this will open the door for advisors to have very broad discussions about the financial situations of clients, since the subject of how to employ what is in many cases their largest asset can now become a part of the planning discussion, Giordano says.

“This is set up as an intentional approach to having a conversation all the way through the life stage, so that the advisor is actually making recommendations about home credit,” she says. “Should you refinance? If you refinance, how much of a savings and monthly payment would allow it to make sense for you to do that? Should you have a bimonthly payment so that you’re making a split payment twice a month? If you have equity, does it make sense for you to actually take that refinance? Those kinds of conversations are really what we hope to engender with this initiative.”

In terms of the reasons behind the idea that financial advisors continue to overlook housing wealth, Mark Zagurski, director of advisor development at Mutual of Omaha couldn’t pinpoint a precise cause, but sees Mutual of Omaha’s incorporation of the topic into the planning conversation as a choice that could potentially signal its viability as a topic for a wider swath of advisors to touch upon in the long-term.

“The thing that stood out for me was [learning] that the average retiree has a substantial amount of their wealth in their housing equity,” Zagurski told RMD in an interview. “The idea that advisors are sitting down every day, talking to consumers who have retirement planning and other needs, and we weren’t significantly talking about their housing wealth was just a big miss on our part.”

In addition to the long-term possibility of housing wealth entering into more financial planning conversations, there is also potential for a competitive advantage in the short-term, Zagurski says.

“Others are welcome to emulate this approach and come along, and everyone can benefit from it. But right now, I see it as a competitive edge today,” Zagurski says. “It would certainly be nice to have others follow us on this. But, I certainly will take the competitive edge as long as I can have it.”

Facilitating mortgage options

After gaining a full understanding of what their housing and financial situations are, a client may end up deciding that some kind of a mortgage-related solution would fit their needs best depending on the goals they have. The company says that financial advisor clients have “convenient access” to services provided by Mutual of Omaha Mortgage, which conducts both traditional forward mortgage and reverse mortgage business.

When asked about the possibility that some might perceive a conflict of interest in which Mutual of Omaha advisors can offer up services which can be facilitated by Mutual of Omaha Mortgage, Giordano said that the company has done its ample due-diligence in ensuring that all relevant regulations and appropriate care are observed by Mutual of Omaha in making a recommendation for clients.

“We’ve taken incredible care to make sure that we are not violating either the spirit or the rule of the regulations [that apply] here. Everybody understands that reverse mortgages, or home equity of any kind, can never be used for the purposes of investments,” Giordano says. “We’re taking great care to make sure that before the potential customer has received a phone call from someone on the home equity side, that they understand and that they are giving express approval for that telephone call and that it’s [from] an affiliated business agreement. It operates more as a marketing agreement, and there’s absolutely no requirement on the part of the client to use a Mutual of Omaha home equity representative on either a forward or reverse product.”

There is also no tie-in whatsoever to any sale of any other products, Giordano adds, understanding the key regulatory principles which govern the home equity space.

“We took [the reverse mortgage industry’s] regulatory climate into account, and took great care to understand how we could operate in a way that was compliant and consistent with both the spirit and the letter of the laws and regulations,” Giordano says.

In other planning conversations that Mutual of Omaha has with clients on the insurance side, comparable questions exist but at the end of the day the company recognizes that its products are not always the right fit for a particular client, and that axiom applies to this initiative as well, Zagurski says.

“It’s something inherent to the way we do business already,” he says. “We’re confident in the products that we build and the relationships we have, but we realize at the end of the day, they’re not going to be suitable for everybody. They’re not going to be the only choice for everybody. That doesn’t take away from the fact that we’re proud of what we bring to the marketplace.”

Recent history

The company’s reverse mortgage division, formerly known as Retirement Funding Solutions (RFS), was a division of mortgage company Synergy One Lending when that company was acquired by Mutual of Omaha in May of 2018, before being finalized that July. In August of 2019, it was announced that Mutual of Omaha Bank would be acquired by Pasadena, Calif.-based CIT Bank in a deal valued at $1 billion, but the merger did not include Synergy One Lending.

Later that year, the RFS brand was retired in favor of the brand Mutual of Omaha Mortgage, in an effort reflecting the reverse mortgage division’s association with its parent company and to align its reverse mortgage business more closely under a unified brand identity.

Earlier this year, the company stated its desire to expand its reverse mortgage business by way of access to its network of 350 forward originators and its national presence under a time-honored brand.

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  • The dam has finally broken. Will other compliance departments at the country’s investment advisories finally realize that ignoring a significant portions of their clients assets in retirement planning has been a misstep? Let’s hope so for retirees.

  • Congratulations to Torrey Larsen, Shelley Giordano, and others at Mutual of Omaha for their hard and sustained efforts in getting this major step forward for the industry. Perhaps this is the catalyst needed to speed up the acceptance of using the home as part of the financial assets incorporated into retirement planning.

  • Great move by Torey, Shelly and Mutual of Omaha. This is a major step for the industry.

    The Home for seniors is becoming more and more as a financial tool not only for additional retirement cash flow, but as a financial investment tool.

    Financial planners and insurance companies are utilizing the reverse mortgage as a strategic part of their financial planning for their clients retirement.

    Excellent move as well as a great intensive for our industry.

    John A. Smaldone

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