Sept/Oct 2021 Reverse Mortgage Magazine
changes. “We are not talking about purchasing securities, we are talking about protecting existing securities,” she says. And the various federal and state rules are largely designed to protect consumers in both industries. Loan officers understand that a designation, like the Certified Reverse Mortgage Professional (CRMP), gives credibility to the profession, while licensing for originating mortgages in the various states is done through the National Mortgage Licensing System (NMLS). However, in the financial services industry, the various designations and requirements are numerous and much more involved. Different designations involve different rules. Some designations are fiduciary and are compensated based on a fee or on a percentage of the assets under management. Other designations can allow for commissions. And some can do both. “It can be massively confusing to everybody,” she says. Professionals in the financial services industry want to ensure they don’t veer from the rules, so some of them tend to be overly cautious. “I hear literally every day from loan officers that they go to meet with financial advisers and they get shot down because they are told that they aren’t allowed to speak to loan officers,” she says. “You can go see financial advisers and they will swear up one side and down the other that the Financial Industry Regulatory Authority (FINRA) prohibits them from having a conversation about a reverse mortgage. And that is not true.” But there is nothing malicious going on, she quickly points out. She has learned that chief compliance officers are so focused on issues, such as data security, privacy, confidentiality, and insider trading, that they simply aren’t focused on the reverse mortgage industry. “It’s not an inherent dislike of reverse mortgages that is our problem here,” Giordano says. “It is that they don’t even think about it because they have so much to worry about with their own folks and their own responsibilities.” And because the rules in both industries restrict or forbid direct compensation between loan officers and financial planners, they aren’t as inclined to consider it in their mix of suggestions to clients. “That gives a little bit of insight into why it has been such a slog for us,” she says, adding that there has been progress. Before 2014, the language used by FINRA about reverse mortgages noted that they were an option of “last resort.” But in 2014 that language was changed to say that loan funds needed to be used “wisely.” “And we all agree with that. We all are looking to find a reverse mortgage that is stable and sustainable over retirement years,” she says. “So, don’t fall for the FINRA excuse—it doesn’t exist.” Why Bother? As difficult as it might be, it’s important for loan officers to work with financial planners, even if it is to merely educate them about equity release, generally, Giordano and Milano say. Housing equity accounts for about two-thirds of the average American’s net worth. And the Securities and Exchange Commission continually requires financial advis- ers to be more accountable. “So, ignoring the housing asset is puzzling,” Giordano says. While it is important to not challenge advisers, the education can be achieved with discussions. “It is a worthy conversation,” she says. “What percentage of your clients have a home that represents a half to two-thirds of the value of the overall assets? What are you doing about longevity? What are you doing about market volatility? What are you doing about unexpected expenses? A reverse mortgage fits into all of that.” Opportunities continued from page 27 Opportunities continued on page 30 28 REVERSE MORTGAGE / SEPTEMBER-OCTOBER 2021
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