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Interview: Why advisors are resistant to reverse mortgages
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14 Comments
Excellent presentation. Looking forward to part 2
Great interview Shannon. Thank you!
Cliff hanger :-)!
Right?! 🙂 Thanks for watching!
What a cliffhanger!
Good interview and so true. I once had a financial planner that told his customers to consider a reverse mortgage. He submitted his customer meeting notes to his broker/dealer and was told he could not mention that avenue, period.
“Once you do the math, you can’t un-see it”. Great statement. So true.
I hope the positive vibes towards reverse mortgages continue to roll in the financial planning world. Would love to see reverse mortgages become more mainstream as a financial tool in retirement planning.
I had a pretty good idea of what I would hear in this interview, and I was not surprised. I started in the RM industry 21 years ago, and if you think it it difficult to break through the barriers and resistance of Financial Advisors now, it was extremely difficult back 20 years ago. At the least, the younger ones are more open to the consideration of learning about the benefits of the loan, but still? There are those who feel they are a terrible option, think of them as debt, and simply refuse to be educated and open-minded. It-is-frustrating, that after all this time, the seminars and educational presentations available to them, ( Including CPA’s) , they refuse to give up their biased beliefs. Plus some of the large firms do not allow even the two words “reverse loans” to be mentioned to their clients. Really? Aren’t they by their very professions and fiduciary responsibilities supposed to be looking out for their clients’ncial future by leveraging a portfolio to make it last for a lifetime? In wrapping up my comments, it will eventually happen, seek out the professionals who want to be educated and pass up the ones who don’t. I am looking forward to the next episode of this video.
Great job Shannon. Well done! We need to keep preaching out there
Thank you, Rich!
In coming to my first NRMLA National Convention in 2006 in San Francisco, I was encouraged to join the Bridge Committee and signed up for it. The purpose of that committee was to reach out to the financial advising community. Within a day after signing up, a NRMLA staff member came to me and told me that if I wanted on a committee, I needed to choose another since the Bridge Committee had disbanded for lack of interest.
I am not upbeat about our progress with financial advisors since 2006. In 2010 when the outreach to financial advisors was renewed particularly by MetLife, I thought that the number of HECM endorsements coming referrals made by this sector would have annually exceeded the number of HECMs endorsed during last fiscal year (2022). But that is hardly the case.
Like our industry, the IRS takes college graduates in fields like psychology, dance, drama, music, sciences and other fields unrelated to finance and tries to turn them into competent IRS Revenue Agents and Revenue Officers. While a few with unrelated degrees obtain a high level of competency, most competent IRS Agents come with a degree in a field related to finance or law.
As Jesse Allen states in Part 2 retraining our current core of originators is difficult with small returns for the effort. As stated many times since 2006, if the industry is going to be successful in gaining substantial referral business from financial and legal professionals, we need to hire people with those backgrounds. Like most workplaces, our industry tries and tries to obtain different results by doing the same thing over and over again. That practice is described as insanity in the workplace.
Very well articulated Jesse Allen. Post great recession guidelines created the consumer protections that legitimized the product going forward and have positioned the industry to assist wealth planners in the current and most pressing retirement challenging climate.
Everyone within the industry talks about the consumer protections as if they make the product better implying that the popularity of reverse mortgages among seniors should have gone up resulting in much higher closings. If that were true at some point since April 27, 2015, we should have seen a dramatic increase in endorsements for both H4P and Traditional HECMs.
What we have seen is lower endorsement numbers for all HECMs for every full fiscal year since April 2015 except 2022 which was so high because of HECM Refis. This fiscal year started as a disaster with only 18,020 HECM endorsements in the first six months and Case Number Assignments in January and February only provide caution that the endorsements for the second half of this fiscal year could sink under 15,000, making total HECM production one of the worst four fiscal years (if not the worst) for HECM endorsements since fiscal year 2003.
So where is this popularity that results in higher production numbers?? Rather than dealing with the situation it seems we are satisfied with hyping how wonderful the protections are changing seniors’ and financial advisors’ minds about reverse mortgages. If that were really the case, HECM production would never be better than it is today.