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3 Tips for Reverse Mortgage Originators to Connect With Financial Planners

Financial planners account for significant potential as reverse mortgage referral partners due to the clients they have access to, and the steps those clients take to strategically employ their assets for their own financial security.

That’s why reverse mortgage loan originators would do well to observe some key realities related to how they can forge better, more fruitful relationships with financial planner partners as a source for business.

This is according to a trio of financial experts discussing the topic in a webinar hosted this month by RMD. 

Present solutions before presenting a product

One of the mistakes that many reverse mortgage loan originators can make is becoming too sales-oriented and straying from being solutions-oriented in their dealings with advisors. This is according to Don Graves, president and founder of the Housing Wealth Institute, an author, and Instructor of Retirement Income at The American College of Financial Services.

“The stumbling block for the loan originator is that advisors don’t know the strategies,” he says. “If you don’t know there’s a tool for [specific financial problems] — you’re just used to a hammer and screwdriver and wrench, but you don’t know there are other tools available — you may miss it.”

The presentation of the reverse mortgage as a unique tool to create specific solutions is something that would serve originators well in terms of relating the potential for a reverse mortgage in terms close to the concerns of the advisor, Graves says.

“It’s not that reverse mortgages cannot be presented as a product, but they must be presented as a paradigm,” Graves says. “As a way to see the retirement landscape. Far too many in our industry just sell product, but they’re missing it.”

This is something that is emphasized by the desires on the parts of financial planners to do right by their clients in as efficient a way as possible, according to Evelyn Zohlen, founder of Inspired Financial and 2020 chair of the Financial Planning Association (FPA).

“There is not a week that goes by that I’m not solicited by a reverse mortgage specialist wanting to chat with me about the benefits of reverse mortgages,” Zohlen explains. “And I’m always interested in case studies and scenarios and new research. If it’s all about product, though, my response is generally to tell [that specialist] that I’ll let them know when I need to know about the product. Because right now, I need to know how this fits into my client’s situation.”

This is why Zohlen recommends to her colleagues that operate in the reverse mortgage space to be a goal achievement or solutions provider first, and a product evangelist second.

“The product details matter, of course,” she adds. “But that follows. It’s first and foremost about what’s right for the client and achieving their goals. And there’s a lot of new education opportunities that planners have now to learn how that works.”

Focus on building one-on-one relationships

Originators would also be well-served by taking the time and the effort to forge one-on-one relationships with the financial planners that operate in the community, Zohlen advises.

“Candidly, a lot of this is one-on-one,” she says. “A lot of it needs to be building relationships on a one-on-one basis with planners in your community. I have a small group of reverse mortgage specialists in my community here in Orange County, but I know and I trust that they’re my ‘peeps,’ so to speak, and that wasn’t because they sent me a cold call or cold call email out of the blue.”

Taking the time to build that kind of a rapport with a planner can communicate to them the dedication that a reverse mortgage specialist has not only to the relationship, but in the dedication to clients, Zohlen says. For a reverse mortgage professional who may not know where to start in terms of building those relationships, one potential starting point can be through membership in an organization that features financial planners.

“In terms of asking about the channels that an originator may ask about in forging those relationships, I’m going to get a gratuitous plug for the Financial Planning Association,” she says. “Every one of the [reverse mortgage professionals] in my rolodex, I met through the Financial Planning Association through meetings and events with them,” Zohlen offers as an example. “And I guess part of that stems from my personal perspective: that if you care enough about planning to be involved with the [a dedicated association], then you’re somebody that I want to know and I want to work with.”

Continue tackling misconceptions

Educational issues have always been important to the reverse mortgage industry, but finding issues that are specific to the perceptions of financial planners is a key element in overcoming any misconceptions that the planners themselves have about the product category.

It can be important for loan originators to understand what those specific misconceptions are, according to Dr. Craig Lemoine, director of the financial planning program at the University of Illinois Urbana-Champaign and executive director of the Academy for Home Equity in Financial Planning.

“We need to tackle [the idea] that [reverse mortgages] are abusive misconceptions of cost,” Lemoine says. “There are some very negative opinions out there, and some strong ones at that. And I think part of those negative opinions come from not understanding what the product is, what it does and how it works.”

Part of this can lie in the idea that financial planners do not understand that there is a payment involved when a reverse mortgage is written into an insurance pool. Advisors and firms need to be continuously educated to understand the potential value that a reverse mortgage can have for the financial health of seniors.

“We also need to create environments where reverse mortgages are an income tool, said in the same breath as a Shareholder Value Added (SVA), said in the same breath as perhaps funds that can generate equity and bond income, as well. But, that to me is the great hurdle that we have In front of us.”

These hurdles are essential in making the reverse mortgage product category more mainstream, and educating loan originators about these principles, and the effective ability to communicate them to advisors will be very important, he says.