After American Advisors Group (AAG) released its latest television commercials in July and August, respectively, the reverse mortgage industry was buzzing with activity. After sharing the July Home Equity Conversion Mortgage (HECM)-focused ad on social media, originators, brokers, counselors and more seemed to see actor Tom Selleck not just as a spokesman for AAG, but as a spokesman for the entire reverse mortgage industry.
As the most visible reverse mortgage lender in part due to its investment in national commercial advertising, many within the reverse mortgage industry have embraced the ads created by AAG in their own outreach even if they themselves don’t actually work there.
“Have [a person you know who is interested in reverse mortgages] call me to walk them through the process,” said Kathleen Duncan, an originator at Guilford Savings Bank, on LinkedIn in a post sharing a recent AAG ad from a story on RMD. “I originate reverse mortgages for a different lender, but everyone loves Tom Selleck!”
Leading the charge
Reverse mortgage television advertising, of course, is not the exclusive arena of AAG, but the company’s commercials are very visible, owing both to the networks that the company actively advertises on (including cable channels like MSNBC, Fox News and Bloomberg) along with its use of celebrity spokesman Tom Selleck.
Because of that visibility – AAG’s recent ad has even appeared on broadcast network CBS during a telecast of popular daytime game show “The Price is Right” – some in the reverse mortgage industry are perfectly happy with the No. 1 lender’s ads leading the charge, simply because it raises overall awareness of the product specifically and the wider industry.
“TV advertising has been highly effective for AAG, it anchors our whole marketing strategy,” says Martin Lenoir, Chief Marketing Officer of AAG in an email to RMD. “That’s because TV allows us to talk directly to our consumers without all the noise surrounding reverse mortgage products.”
One of the primary reasons that the company employs spokesman Tom Selleck is the confidence he inspires in viewers of AAG’s television ads, which allays the fears they may have about tapping into their home’s equity through a reverse mortgage, according to Lenoir.
“We know that seniors need to feel confident about their financial decisions. Up until recently, many have been reluctant to tap into their home equity, possibly out of habit or fear,” Lenoir says. “TV advertising, when combined with a trusted spokesperson, can help allay those fears and deepen consumer confidence. In our case, Tom Selleck helps to give seniors the confidence to consider including home equity in their retirement planning decisions, whether through a reverse mortgage loan or another means.”
The ‘rising tide lifts all boats’
The entrance of a dominant lender steering the proverbial “ship” of outreach awareness is also not exclusive to the reverse mortgage industry in the United States. Yvonne Ziomecki, CMO of Canada’s largest reverse mortgage lender in HomeEquity Bank, says she often wishes that her company’s closest competitor would be more active in television advertising since any visible industry presence in media helps to elevate and expand conversations surrounding the product, as opposed to just one specific company offering it.
“I think more players would legitimize this product and the category,” Ziomecki told RMD in May. “And more advertising dollars in the marketplace would help everybody. That ‘rising tide that lifts all boats?’ That’s kind of the way to put it.”
Back in the United States, even those who get most of their business from word-of-mouth referrals as opposed to advertising on television see the addition of major ad campaigns as generally beneficial to the broader outreach efforts of the reverse mortgage industry.
“I think it incontrovertible that TV advertising has been of benefit to the industry, as it has served both to heighten awareness of the product and to educate consumers,” says Laurie MacNaughton, reverse mortgage consultant with Atlantic Coast Mortgage in Virginia.
Kathleen Duncan, the originator who enthusiastically shared the AAG ad on LinkedIn, sees a clear benefit to the company’s activity in television advertising.
“I think that the commercials for reverse mortgages are helpful in getting the word out,” Duncan told RMD in an email. “I think the more people hear about reverse mortgages and how they ‘may’ benefit the right person for the right reason is really good. The more accurate information that is out there, the better, in my opinion.”
Benefit for all originators
The fact that the ads are out there and as visible as they are has also helped to benefit Duncan, she says.
“I would say that I have directly benefited from AAG’s commercials in that they start some conversations that likely would not have happened – in particular with some friends of mine when I posted it on Facebook,” she says. “People my age have parents that may be struggling on their fixed incomes – the Tom Selleck commercial gave an introduction that they can talk to me about a product that may help their parents.”
In MacNaughton’s case, she also says that she herself has “absolutely” benefited from the larger lenders who invest in television advertising.
“In 2018, a homeowner’s adult daughter applied with a big lender and used a power of attorney (POA). However, there were title issues, document issues, repair issues, and hoarding issues,” she says. “The original POA is nowhere to be found and now the county has served notice the home is being listed at tax auction. All these matters can be remedied, but they take strong local contacts. But the point remains, had the adult child not seen a TV ad, she may not have thought to look into a reverse mortgage in the first place.”
Reputational concerns
That’s not to say that the use of television ads is universally praised, however, regardless of the lender who uses them.
“Advertising and marketing are a part of any successful business or industry, and reverse mortgages are no different,” says Jamie Hopkins, director of retirement research at Carson Group in a June email to RMD. “You need to make your target market aware of your product and company. But, at the same time, marketing while beneficial for a single company, could be harmful to the overall initiative.”
Television advertising in the reverse mortgage industry is generally careful and thought out in its construction, Hopkins says, but it’s difficult to ignore negative feedback whenever it crops up.
“I often get comments from consumers about the ads, and let’s just say the comments are typically not positive,” he says. “The Netflix show ‘The Kominsky Method’ made fun of the reverse mortgage TV ads this past year, and I think what they portrayed is how many view the ads. But, the ads are not all bad, they do bring awareness to more people.”
In a written testimony recently submitted to the House of Representatives Financial Services Subcommittee on Housing, Community Development, and Insurance, National Reverse Mortgage Lenders Association (NRMLA) President and CEO Peter Bell discussed concerns related to celebrity spokespeople in reverse mortgage industry television advertising, casting doubt on the idea that they definitievely push consumers into taking out a reverse mortgage loan.
“As far as celebrity spokespersons, that is a fact of life in how advertising is conducted in America,” Bell said. “Having a celebrity in a commercial for reverse mortgages is no different than featuring Dennis Quaid in ads for e-Insurance, Sally Field for the dietary supplement Boniva, or Julia Roberts for Lincoln-Continental autos. The ads are designed to draw the viewer’s attention. It is not expected that consumers act because the celebrity told them to.”
Reverse mortgage ads can also be fodder for jokes from late night comedians, as observed earlier this year after the presidential campaign announcement of former Vice President Joe Biden was compared to a reverse mortgage commercial by both NBC’s Jimmy Fallon and CBS’ Stephen Colbert within the span of a single week. That’s to say nothing of other parodies that have popped up over the years.
In spite of the jokes that can spring from these kinds of outreach efforts, however, awareness of the product and a consumer’s recognition of his or her own need for it often serves as the first step toward providing that borrower with good information about how a reverse mortgage could alleviate some kind of financial strain.
In Kathleen Duncan’s case, the resistance she encounters with some borrowers simply arises out of the fact that the product being discussed is a reverse mortgage. The way in which a potential borrower is informed about it doesn’t create any inherent resistance, and she has not encountered any resistance from potential borrowers reaching out because of an AAG ad.
“There are still many people who are resistant to the initial reverse mortgage conversation,” she says. “I have not found anyone who has made any direct[ly resistant] comment because of AAG’s commercials.”
This edition of the RMD Report is sponsored by national appraisal management company Class Valuation.
