There are reasons advisors aren't sending you clients

The conversation was both terrifying and enlightening.  I was several months into working with a large reverse mortgage company, trying to help them break into the financial advisor market.  I had done the math on the impact reverse mortgages have on retirement planning and was thoroughly convinced that they would become a significant product in creating better outcomes.  Then came the sentence that would change my entire view.

The advisory firm was in Colorado, I had just completed a 45 minute virtual presentation on both fundamental and advanced strategies for including reverse mortgages in retirement planning. They had entered the conversation skeptical, had asked all the right questions, and clearly saw things differently by the end.  Knowing they had clients that would benefit from what we had to offer, I asked one of my favorite, and most revealing questions. 

“What are your concerns? What would keep you from introducing one of your clients to our team?”

His response caught me off guard.  “Ryan, what you’ve presented today makes a lot of sense, we’ve learned a lot.  You seem great, and I can see how many of our clients could benefit from this.  However, I’ve met several people in the reverse mortgage industry, and there is no scenario where I would put one of them in front of our clients.”

Wow.  That’s a problem.  As I took in what he said, I did the tap dance, assured him our team was different, but knew I had a far bigger challenge than I had anticipated.  Not only was the perception of the reverse product a problem, we had an issue with the entire industry.  A few weeks later, seeking more understanding, I attended my first NRMLA conference.  My experience confirmed exactly what the advisor had told me.

I’ve worked as a financial advisor, wealth investment advisor, whatever the title de jour, for over 25 years.  Here’s the thing, building an advisory practice is hard!  Getting clients to say “yes” and trust you with their entire financial future is a big ask.  And once you begin to work with those families, you need to maintain their trust, for ever.  Keeping them is far better than having to go find another one.  One of the greatest ways to lose a client is to suggest a product, solution, or refer them to a business partner that doesn’t align with their best interest.  Suggesting a reverse mortgage is sketchy enough. Then bringing in an outdated sales person with archaic marketing materials, piles of paper, and the pungent stench of commission breath is an unnecessary self-inflicted wound.  It’s a small step worse than suggesting the Vegas Exploding Fund as their growth vehicle.  Not good for business and not worth the risk!

Now, we all know that every loan officer in the reverse industry is not a slimy commission hungry salesperson.  And I’m also sure there are thoughtful and well-intentioned IRS agents.  That doesn’t mean I’m going to take the risk and introduce them to my clients.  So how will you overcome this stigma?

5 keys to becoming referable:

1. Do your homework. You need to understand the basic principles of retirement planning.  Cash flow, contingency, dependencies, and taxes. Know how reverse fits in and the basic economics of the loan.
2. Look the part. Dress nicely.  Be able to use technology. Be a reflection of the professionals you want to work with.
3. Simplify the conversation.  Use stories and make connections with things that are familiar.  “Tenure payments are similar to…” “The revolving line of credit is much like….” “Many of our advisors have discovered…”
4. Separate yourself.  What are the things people are worried about with the other reverse people?  What makes you different than them? 
5. Be transparent.  Point out the flaws in the industry.  Share where things have gone wrong with borrowers in the past. Stop avoiding the fee conversation.
6. Ask questions.  Your goal is to understand their situation and determine IF what you offer can help.  Your goal is NOT to ask just enough questions to be able to sell a mortgage.  Know the difference.
7. Align with others.  Trust is transferable.  If I trust you and you trust Lisa, I’m likely to trust Lisa. Professional relationships with individuals, groups, or associations will boost your credibility.

In case you haven’t figured it out, financial advisors could be the greatest ally for reverse mortgage professionals.  There is no dispute that retirees are facing financial gaps, and an abundance of mathematical evidence that reverse mortgages can bridge this gap.  The addressable market for this opportunity could be well over 30 million families. But both industries have failed miserably in understanding each other.  The financial institutions have done nothing to truthfully evaluate the merits of reverse mortgages, a complete dereliction of duty.  And the reverse mortgage industry has destroyed itself by neglecting the development of its salesforce, underinvesting in technology, and continuing to propel the last resort messaging through celebrity spokespeople.  All the while, families that could benefit are being left in the dark. 

So, who is responsible for fixing this mess?  You are.  Your messaging needs to be clearer.  Your credibility needs to be richer.  Your tools need to tell a better story.  You can no longer perpetuate the limiting beliefs about reverse mortgages, and you can no longer perpetuate the experience of the advisor I spoke with in Colorado. 

Grab a pen and paper, it’s time to rewrite your story.