If you’re among those who think reverse mortgages are for people with no other resources, you’re wrong.

In the past, most reverse mortgage borrowers might not have had many other options. But in recent years, there has been a significant change. Now, a reverse mortgage is sometimes used by older homeowners as part of a thoughtful retirement income plan.

In 2014, the Federal Housing Administration instituted program changes designed to reposition the HECM, making it less useful as a product of last resort and more appealing as a financial planning tool for those looking to bolster their finances in retirement.  

The move spurred an industry-wide goal to connect with financial advisors to teach them about reverse mortgages. But this mission was met with some resistance.

Many found that financial advisors harbored the same long-held misconceptions about the product as consumers and that getting through to them was tough.

The idea that a reverse could be used strategically for those who were not in financial trouble wasn’t getting through. But now, four years in, some say they’ve seen a change in the tide.

Reverse Mortgage Funding, one of the top three HECM lenders in the country, is among them.

It says it has seen a notable uptick in interest from financial advisors, and it’s throwing down sizable resources to help its originators go after this business.

RMF conducted a study of 1,869 financial advisors from 2016-2017, revealing that more than half were open to the use of a reverse mortgage.

According to RMF, 40% said they have recommended a reverse mortgage to a client, and an additional 11% said they may soon recommend one.

By comparison, RMF said a 2012 survey showed that just 16% of surveyed advisors said they have recommended a reverse.

What changed?

Tom Dickson, RMF’s advisor channel leader, said efforts to educate this community are finally paying off.

“I think it’s education. My experience is that most advisors were not much more informed than a typical consumer about how it worked, and a lot of them had the same misperceptions,” Dickson said. “We’ve pushed education and have broken through that.”

Dickson also said that once an advisor is receptive to learning the facts, there’s a good chance they will come around.

Dickson regularly hosts webinars for financial advisors. At the beginning of the webinar, he polls attendees on their opinions of the product. He said that after a brief explanation, he almost always sees a shift in opinion.

“We can double the number of advisors from negative to positive in five minutes just by introducing how it works,” he said. “We’ve seen this consistently over many, many webinars.”

For the last year, RMF has ramped up its education. Part of that effort includes hosting more of these webinars, with one recent event drawing more than 200 advisors.

“There’s strong interest, there’s no question,” Dickson said.

RMF is also investing in resources to teach its partners how to communicate with financial advisors, and providing them with tools to illustrate how the loan’s line of credit feature works.

Dickson said the curriculum centers around three concepts: how to target the right type of financial planner, how to communicate the right message, and how to build a value-add relationship.

“There are practices that are best for introducing the product to advisors and their clients, and the more assistance we can provide to our partners in this effort, the better for everyone,” Dickson said.