Sell CPAs Advice, Not Specific Loan Structures
By Dave Savage
CEO, Mortgage Coach
I was recently asked a question from a loan officer and Mortgage Coach customer named Cyrus Julian — he was having problems connecting with CPAs and financial planners he was approaching who were not familiar with equity repositioning.
They weren’t taking his advice and, in some cases, weren’t returning his calls after the first conversation. After talking to Cyrus, I found out he was approaching them with very specific equity management strategies that recommended that borrowers harvest equity and invest it in the market.
First, let me give you two main takeaways from this post that apply to all loan officers and Mortgage Planners:
STOP selling specific mortgage products and START delivering a process to make the best possible decision; and
STOP assuming you know what is best for others and START asking good questions and then actually listen and learn.
Below is my specific advice to Cyrus…
LOs shouldn’t be calling financial planners to sell specific financial strategies — they should be calling advisors to learn about the types of strategies they typically recommend and then explain to the planner how their approach to liability management helps the advisor integrate the mortgage and other liabilities into their clients’ plans.
Too many loan officers are approaching planners with equity harvesting strategies and losing credibility and trust before they even get their foot in the door, because they are leading with a specific strategy vs. explaining the practices and processes they deliver.
Mortgage planning, by definition, is designed to help the homeowner make the most informed decision possible, by integrating the mortgage decision into the overall financial plan — it’s not recommending and selling specific strategies.
Recommending a traditionally amortized mortgage to a borrower with the financial strategy of prepaying their mortgage is as much of a mortgage planning strategy as recommending an interest-only mortgage and investing the difference in a side account. The difference is that, in one strategy, you are building your wealth in your home and, in the other, you are accumulating your wealth outside the home. Of course, these two strategies also have different risk factors and different potential for return on investment — but they are both mortgage planning strategies.
The goal of every Mortgage Planner is to help the homeowner select the mortgage that:
Helps them make the most informed decision possible;
Is suitable based on their historical savings and earning history;
Dollarizes the total cost of different debt structures over time;
Helps them reach their freedom point within their desired goals; and
Gives them peace of mind.
This is a very important question and I’m glad Cyrus brought it up. If he’s challenged with this situation, then many others who are NOT asking me the same question could also be having similar problems, as well.
Thank you Cyrus, for helping to teach your peers about the best way to build relationships with financial planners!