Ryan Ponsford, a veteran financial adviser with more than 25 years of experience in wealth management, real estate and lending, is unequivocal: “The reverse mortgage line of credit is one of the most misunderstood, underutilized tools in retirement planning today.”
“The scary part — put five reverse mortgage people in a room and ask them how line-of-credit growth works, and you are likely to be more confused by the end of that conversation than you were at the beginning,” Ponsford said Wednesday during a webinar hosted by Mutual of Omaha Mortgage.
“That’s just unfortunate. As an industry, we’ve done a poor job of equipping our people out there in the field to say the right things.”
At the same time, a growing retirement crisis is making housing wealth more relevant for financial planners. Ponsford estimates the addressable market of baby boomers who own a home at roughly 33 million people, excluding those with more than $5 million in liquid assets. He described those with $500,000 to $3 million in assets as the product’s “sweet spot.”
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.
Why are advisers still skeptical?
In general, housing wealth is often left out of retirement planning, in part because of financial advisors’ past negative experiences with participants in the reverse mortgage industry. “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.”
One hurdle for mortgage professionals is a lack of understanding from financial advisers about how reverse mortgages work, even as the product has evolved in recent years. “Advisers used to be far more resistant,” Ponsford said. “They’ve heard enough and there’s enough happening out there.”
Another obstacle is the perception that clients simply don’t need the product. According to Ponsford, many advisers still hold an underlying belief that reverse mortgages are only for borrowers in financial distress or those without meaningful assets — a “last-ditch” solution rather than a planning tool. He described this as the industry’s most significant perception challenge.
Another persistent concern is that the product is associated primarily with elderly people, a protected demographic that advisers may view as higher risk and “little to no reward.”
How to overcome the hurdles
Ponsford said conversations with adviers should begin by reframing expectations about who reverse mortgages can serve.
“One of the key things that we start every adviser conversation with is, by the end of this conversation, if you’re like a lot of advisers, you will realize that this applies to far more families than you originally thought it did, and ought to be considered sooner than you originally thought it did.”
Advisers tend to evaluate strategies through the lens of risk, which is why Ponsford positions reverse mortgages — particularly the line of credit — primarily as a risk-mitigation tool within retirement planning. It ultimately comes down to cash flow and whether it lasts throughout a client’s life expectancy, he added.
If a plan falls short, the traditional levers are limited: work longer, spend less, take on more investment risk or shorten the time horizon.
“How many of those sound good to the clients you’re working with? None,” Ponsford said. “What if we look at a reasonable, intelligent way to access your housing wealth or at least incorporate that into the equation?
Ponsford said that independent advisers often show greater openness to new planning strategies, partly because they face fewer compliance constraints. Still, advisers within larger firms can create broader adoption once integration hurdles are cleared, creating what he described as a “sweet spot” for engagement.
He encouraged reverse mortgage professionals to focus on planners rather than advisers who are purely oriented toward insurance or asset gathering. A key indicator, he said, is whether an adviser provides clients with a written financial plan.
Communication style also matters. “A lot of loan officers talk too much,” he said. “As you move into those conversations, your first goal is to learn. … Advisers aren’t going to buy into your product. They’re going to buy into what it can do for their clients.”
He also cautioned against describing reverse mortgage proceeds as income. “Income, to an adviser, is a taxable event. It’s actually debt— and be honest about that,” Ponsford said.
English