Financial Advisors and Reverse Loans

The obligation of a Financial advisor to their client, is to to guide them in their investments to develop a healthy portfolio of funds and also protect those funds from running out, by managing the account and providing guidance to the clients on an ongoing basis.

For many years, Advisors have felt that a Reverse loan defeats the purpose of protecting their clients’ assests and due to lack of knowledge about the FHA loan program and how they function, the Advisor would not consider them as an option to protect their client’s principle from being drawn down.

But recently an article was published in Financial Advisor magazine to the industry,  about how they can utilize a Reverse mortgage to extend the life of their clients investments without any tax consequences.  It is simply a matter of the Advisor being more open to learning about this unique federal loan program for seniors and what it could mean for their business in the coming years  because the future of financial planning  will be  rapidly changing as the Boomers begin to consider retirement and new methods  and options for financial planning  will need to adapt to the changes as they appear.

I will be posting some comments in two parts from Reverse Mortgage Daily with the first one here:

 

Reverse Mortgages on the Verge of Financial Planning Breakthrough?
Posted By Elizabeth Ecker On April 18, 2012 @ 6:36 pm In News,Retirement,Reverse Mortgage | No Comments

An article [1] published Wednesday in Financial Advisor magazine demonstrates the way in which a reverse mortgage can preserve the portfolios of retirees who have investments. On the heels of another recent article written for financial planners on the same topic, it is beginning to sound like a sea change for the reverse mortgage industry and its work with financial planners.

Featuring an interview with nationally-recognized retirement expert Harold Evensky, the Financial Advisor article [1] details the Saver option for use by baby boomers who are planning for retirement.

“I’m reasonably positive [the Saver] will become an important part of our planning in the future,” Evensky told the publication.

Evensky and colleagues at Texas Tech have worked on a yearlong study on the use of reverse mortgages in retirement planning that is expected to be published soon. In speaking with groups of financial professionals about the research, Salter told RMD [2] he has received positive feedback from the planning community. In the meantime, Evensky says the studies indicate that use of the reverse mortgage Saver product will significantly increase the survivability of a retiree’s portfolio in retirement.

Part 2 to follow on 4/20/12

 

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