Survey of Financial Planners Reveals Need For Reverse Mortgage Dialogue

More than half of Certified Public Accountant (CPA) financial planners say running out of money is a top retirement concern for their clients, a new survey by The American Institute of CPAs (AICPA) finds.

And while the survey takes note of annuities and Social Security as sources of stable income in retirement, no mention of reverse mortgages underscores a need for increased dialogue between the reverse mortgage and financial planning industries, says Certified Reverse Mortgage Professional Beth Paterson, executive vice president of Reverse Mortgages SIDAC.

Sixty-six percent of respondents said that up to 25% of their clients utilize annuities as an investment or income vehicle for longevity, according to the AICPA Personal Financial Planning (PFP) Trends Survey. Regarding Social Security, 63% of respondents said 50% or fewer of their clients had discussed benefit maximization strategies with them. 

“Reverse mortgage professionals need to be approaching financial planners, CPAs and educating them about how a reverse mortgage can help people with their long-term planning,” Paterson says, adding that for many senior homeowners the financial tool assuages concerns of just what the survey points to: running out of money. 

Seventy-nine percent of CPA financial planners ranked running out of money among the top three of clients’ concerns, with 57% identifying it as the No. 1 concern, according to the AICPA survey. Notably, many of the CPAs surveyed work with worth with high-net worth individuals, AICPA says.

The survey, which includes responses from 548 CPA financial planners, was fielded from Feb. 3 to Feb. 26.

“With all of the financial uncertainty surrounding retirement, running out of money is directly tied to a number of issues that high-net worth clients are juggling simultaneously,” says Lyle K. Benson, CPA/PFS, and chair of the AICPA’s PFP Executive Committee, in a statement, adding that CPA financial planners integrate tax planning strategies to maximize income in retirement.

Fueling clients’ financial and emotional stress about outliving their money are healthcare costs (76%), market fluctuations (62%) and lifestyle expenses (52%), CPA financial planners say. Additional causes for financial stress were unexpected costs (47%), the possibility of being a financial burden on their loved ones (24%) and the desire to leave inheritance for children (22%).

Reverse mortgages are one tool seniors can use to afford their health care costs, make home improvements, travel and more, Paterson says.

“We in the industry need to do a better job of educating financial planners and the public,” she says, noting that many financial planners and CPAs adhere to the stereotype of reverse mortgages as a “last resort.”

“What we in the industry can do to change that [negative perception] is reach out to financial planners, CPAs and educate them as to how reverse mortgages can be used for long-term planning,” she says.  

Written by Cassandra Dowell

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