Financial planners overlook reverse mortgage line of credit

"Most financial advisers serve 200 or more clients, Ponsford added. Among advisers who specialize in clients at or near retirement, he said more than half are designing retirement income strategies, and roughly 70% of clients are homeowners. By that math, a single adviser may have between 50 and 150 clients who could both qualify for and benefit from a reverse mortgage line of credit."

"There have been bad apples, Ponsford said, adding that such issues are not unique to lending. You think your job is hard because you have a product that people have a bad impression of, believe they've had a bad experience or have heard bad things about most of which is untrue, Ponsford said. But a lot of them have had a bad experience with people in the industry."

The addressable market of baby boomers who own a home is roughly 33 million people, excluding those with more than $5 million in liquid assets. Homeowners with $500,000 to $3 million in assets represent the product's sweet spot. Most financial advisers serve 200 or more clients, and among retirement-focused advisers more than half design retirement income strategies with roughly 70% of clients owning homes. A single adviser may therefore have 50 to 150 clients who could qualify for and benefit from a reverse mortgage line of credit. Housing wealth is often omitted from retirement planning because of advisers' past negative experiences and misunderstandings, and many advisers still view reverse mortgages as a last-resort product rather than a planning tool.

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