Financial Planner Shares Advice to Reverse Mortgage Pros on Gaining Referrals

Reverse mortgage professionals understand the need to build an extensive roster of potential referral partners from a wealth of different professions, but one professional class that has garnered a lot of interest over the last couple of years has been financial planners. As the pool of reverse mortgage borrowers has grown to encompass a wider range of home values and “house-rich” clients, financial advisors with an openness to exploring reverse mortgage possibilities can potentially provide a positive, sustained path to more reverse mortgage business.

One such financial advisor who has taken the time to learn and understand the potential flexibility that can be provided to clients through a reverse mortgage is Robert Klein, founder and president of Retirement Income Center in Newport Beach, Calif. In a recent episode of The RMD Podcast now available for listening, Klein offers thoughts on what reverse mortgage professionals can do to encourage referral partnerships among other financial planners and how the industry is performing in terms of education and outreach.

Advice to reverse mortgage professionals: engage with the planning community

For reverse mortgage professionals seeking out partnerships with financial planners, networking with a wide variety of planner designations can make all the difference in terms of striking the right planner in the right position in terms of reverse mortgage perspectives, Klein says.

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“I just think [reverse mortgage professionals] need to network with financial planners, whether it be CPAs, CFPs, RICPs, through whatever means is comfortable,” Klein explains. “Reach out, talk to them, attend conferences that financial advisors attend. Not that we’ve had the opportunities recently, that’s something that was obviously affected [by the pandemic] however, that will open up eventually.”

Robert Klein

For many reverse mortgage professionals unsure about how to approach such financial planners, Klein says that asking in and of itself can be powerful. The many who do not ask for input or referrals from a planner will never know if such a relationship can prove fruitful, so asking and making yourself known among planners can make all the difference. That also goes both ways in terms of relationships Klein has developed with reverse mortgage professionals themselves.

“Just reach out,” he says. “I’ve reached out to people in the reverse mortgage business, various people that I’ve sought out, and experts in the business. I’ve enjoyed mutually beneficial relationships with these people, and I’ve learned a tremendous amount about [the product]. So, I think it’s a matter of reaching out to people that you see that are interested in the business, preferably. And then, just opening up other advisors’ eyes who might not be so obvious that they’re interested in the reverse mortgage business.”

Leading with the idea that a reverse mortgage can provide a value-add to the services the planner is already providing to a client can be very important, since approaching in the context of value-added services can help to illuminate the possibilities of exerting greater preservational capability over a client’s assets.

“[Allowing planners to learn] that [a reverse mortgage is] definitely value-added to the extent you can interact with a financial advisor and make them aware, because not everybody’s aware of the need for this service that clients [may have]<” Klein explains. “If they’re interested in reverse mortgages, and they initiate a discussion with you and learn [that they] don’t know that much about the topic, that’s something they can point out to the financial advisor: the importance of getting up to speed and including educational tips on what they can do, and what their firm potentially offers in the way of webinars. I’ve attended several webinars from different lending companies that have been extremely beneficial.”

Educational outreach of the industry

If there is one thing that the reverse mortgage industry appears to be focused on immensely when discussing the prior year of business and the year ahead, it is expanding the educational practices and availability of relevant reverse mortgage materials to as many potentially receptive people as possible.

In instances where a client may be turned off by a reverse mortgage prospect, Klein observes that some of those scenarios have been tied to informational presentations that can be driven too often by sales alone, he says.

“I think the industry is doing a great job of getting the message out there,” Klein says. “I think a lot of times, when [clients] do have reluctance about reverse mortgages, sometimes it’s in connection with sales presentations that turn them off — for whatever reason — by a mortgage company. So, to the extent that it can be a team effort, and when I’m working with clients from a holistic planning approach, I can show them how reverse mortgages fit into their situation like anything else: what you can plug it into their situation and show how it directly applies, how it could benefit them and what the downsides are.”

Such a framing of reverse mortgage potential can go a long way in illustrating the impact a reverse mortgage might have, Klein says, and reaching beyond the sales cycle to connect to the potential benefit that an appropriate client can experience if he or she explores a reverse mortgage option can be a big difference-maker, he says.

“I think that goes a long way toward when the time does come that they meet with somebody in the reverse mortgage industry,” he says. “It’s not simply a sales presentation to them — not that all reverse mortgage presentations are sales-driven — but there’s a lot of great education out there I’ve seen by professionals in the industry. But I think, once again, when it’s tied into an existing holistic plan that you have with a client, it just solidifies the whole process, and the lights come on for clients.”

Listen to the latest episode of The RMD Podcast for the full discussion with Robert Klein.

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