Financial planner-turned-reverse professional on connecting with referral partners

A financial planner who joined the industry shares what LOs should keep in mind when making those important connections

For Jason Parker, a reverse mortgage professional and author who has a background in financial planning, the decision to enter the reverse mortgage business was not an immediate one. But as he looked into the product and what it aimed to do, Parker saw a potentially rewarding career path rooted in some of the same things he had done as a financial planner: helped clients achieve their goals.

But as a planner with the CFP designation, Parker has also noted that a lot of reverse mortgage professionals may be unsure about how to forge referral relationships with members of that profession. In a recent discussion on The RMD Podcast, Parker offered some thoughts on how some of his reverse mortgage industry colleagues can best accomplish those goals.

The consultative approach

One of the things that attracted Parker into the reverse mortgage business was how consultative the reverse mortgage process is for borrowers.

“Just like any financial planner knows, the first thing that you’re going to do is define the scope of the conversation,” he said. “Come to an agreement [about] what we’re talking about [and what] piece to start with, especially if you’re doing a reverse mortgage-only consultation. Then from there, once the client and the reverse mortgage professional have that defined scope for the conversation, then it’s about going into discovery first. It’s not jumping into the solution.”

Jason Parker, a financial planner-turned-reverse mortgage professional.
Jason Parker

Selling a client on the product’s benefits first is a key part of the equation, Parker said. Knowing something about the advisor mindset also inspired Parker in a recent commentary he wrote for RMD, aiming to forge more connections between planners and reverse LOs.

Still, he has seen over the past 18 months that reverse mortgage LOs need to apply their consultative power to the planner partnership, since they appear to have misconceptions about the profession, Parker said.

“In talking to a lot of reverse mortgage professionals and doing national calls with loan officers and others, I’ve just heard this constant theme. It’s almost like a mystique that reverse mortgage professionals have about advisors,” he said. “[I’m] trying to educate reverse mortgage professionals really on how disjointed the financial advice community is themselves. Every financial adviser is not the same. They don’t all do the same things, and that’s actually a big debate that goes on in the financial advice community.”

The source of that debate comes from the titles that advisors have because it’s possible someone who calls themselves a financial advisor could be a life insurance salesperson, or a salary-based advisor, all of which have different ways of doing things.

Knowing what’s important

Being aware of that debate within the advising community itself could prove beneficial for reverse mortgage professionals, Parker said.

“It’s very important for somebody that wants to target financial planners, or work with financial planners in their core business to really understand those mechanics,” he said. “[But] for those that don’t have that ability, the willingness or even aptitude to get that deep into the weeds with that, it’s just about understanding what some things are that are important to all advisors.”

One topic of conversation that planners could find valuable comes in the form of long-term planning discussions, Parker said.

“That’s something that is a critical part of the plan, and that’s because, from accumulation to decumulation, that conversation is pretty simple,” Parker explained. “We’re talking savings rates, [actual] and projected rates of return, and risk in the portfolio as you reach retirement. Then, things get a little bit more complicated, because now [a client will] have X amount of assets and X amount of income. How do we make this last? And what are those risks that come up from retirement to death, essentially, which is as long as that money needs to last in most cases?”

Long-term care remains an unknown risk for many financial advisor clients, and mitigating unknown risks is a key goal that advisors have in managing their clients’ finances, Parker said.

“It’s important for reverse mortgage professionals to understand at least that part of the conversation that the advisors are having,” he said. “Even if they don’t have that background themselves, advisors are typically willing to share their experiences. You’ll hear some really interesting stories that people have related to those long-term care conversations, and even the solutions that are being used out there in the market.”

A ways to go

When asked if the relationships between financial advisors and reverse mortgage professionals might have become more normalized over the past few years, Parker said those relationships still have some progress to make, since it’s still an “arm’s length” relationship that advisors are most likely to have with reverse mortgage professionals.

Parker has also heard frustrations from people in the reverse mortgage business about connecting with advisors, but another thing they need to understand is that reverse mortgages are likely to only apply to a small segment of the people they’re aiming to connect with for advisor services.

“From the advisor standpoint, the advisor may be targeting anybody aged 18 to 100,” Parker said. “So, the reverse mortgage solution [applies only to] a small segment of the people that they’re talking to. Even beyond that, then it’s the clients 62 or older that have enough equity or plan to stay in their home in most cases. That whittles it down even further.”

Understanding that dynamic could help reverse mortgage professionals to understand more of the advisors’ mentality if they have a tough time making a connection, he said. 

“From an advisor standpoint, it’s a very small segment of the scope of clients that they’re talking to,” Parker explained. “And so, that’s one reason that they don’t really take [reverse mortgages] that seriously because they don’t really need to, it just doesn’t come up very often.”

There are also a lot of other professions aiming to set up their own partnerships with advisors. Knowing that landscape could be beneficial for a reverse mortgage professional aiming to determine the best way to engage with an advisor, Parker said.

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