Sell CPAs Advice, Not Specific Loan Structures

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!

Comments

[Richard Lovell]

I am really enjoying your Blog and I am considering learning more about “Blogs” and starting my own. Thanks for the incentive.

I read the question from Cyrus and of course your response. I really liked what you said and it brought a question to my mind regarding your response that we “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.” I agree with you on asking great questions, LISTENING, not selling specific products, but recommend products based on the information received from the client. I take into consideration a lot of data before recommending a specific product, but with the recent increase in “mortgage planners”, I have adopted something from the financial planning world; 1) Prudency, 2) Suitability. So, back on track to my original point to you, I would submit that we do make specific recommendations based on the answers we have received from our “great”, not good questions. I have adopted into my proactive material from you, Jim McQuaig , Jim McMahan , Randy Leubke , Steven Marshall , Tim Braheem , Greg Frost , Kuiper, Mitchell , Union , and the list goes on. So, shouldn’t we make recommendations considering we are to be looked upon as the expert in this field? Are they not coming to us because we are the expert in this field? Should they not be looking at us as the experts to provide them with expert advice that will help them achieve their short and long term financial goals through a better, smarter, safer way? Maybe I am just missing what you meant, but I believe my clients and referrals come to me for that expert advice.

Hopefully, this made some sense and I didn’t miss the true point you were making.

Again, thanks for the great product, MC, the insightful “Blog”, and taking the time to discuss these strategies with all of us. And it was great seeing you at BP07 and saying hello. See you next time at AMP/Randy Luebke’s for my refresher.

Have a Merry Christmas and Happy New Year.