2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894
As a financial advisor, you’re keenly aware of the need to avoid offering tax advice or legal counsel. Upon uncovering gaps in your client’s protection, (unless you’re licensed to sell property/casualty, life, or even long term care insurance), your function lies in pointing out the need, recommending they seek the advice of a specialist.
The very same compliance principles apply when it comes to talking with your clients about the value of unlocking their housing wealth through a Home Equity Conversion Mortgage (HECM) or reverse mortgage. No, you’re not the one to discuss specific features and benefits of the product, any more than you would discuss the specifics of different insurance policies or trust provisions. What is very much within your purview is first understanding – and then communicating with appropriate clients – the place housing wealth might have in their overall financial plan, then recommending they seek the advice of a reverse mortgage specialist.
You’re wise to be cautious about recommending products or even tactics outside of your expertise, and you’re hesitant to suggest a solution you’re heard was “expensive”. The real questions you and your client must ask, concerning any financial planning recommendation, include: What is the problem being solved? What are the alternatives? What are the risks of doing nothing? (Expensive? Compared to what?)
Stay compliant – always. But the topic of government-insured reverse mortgages belongs on your need-to-know list – and possibly on your client’s as well.