Professionals offering personalized financial advice have emerged as a key reverse mortgage industry referral partnership. Still, a new study illustrates that older Americans are the most reticent to seek it out according to a new study conducted by Charles Schwab.
Operating from a data set consisting of 1,000 401(k) plan recipients between the ages of 21 and 70, only 62% of baby boomers indicated they would like personalized investment advice for their retirement accounts. The positive response rate increases for each successive generation: 75% for Generation X; 78% for millennials; and 83% for Generation Z.
A majority of baby boomers (52%) also said that their financial situation requires personalized financial advice. Still, again baby boomers came in last when compared to other generations’ answers, outdone by Gen Xers and millennials (56%) as well as Gen Zers (62%).
However, when measuring each generation’s top preferred source of financial advice, baby boomers far and away preferred a financial advisor (44%). Top choices of other generations include getting advice through a 401(k) plan for Gen Xers (38%) and millennials (41%), and family and friends for Gen Zers (52%).
All surveyed generations scored above 90% when asked if they would likely follow financial advice from a human professional. When asked about advice that could come from an artificial intelligence (AI) source, baby boomers scored the lowest in terms of confidence in any financial advice from a non-human source.
At a recent roundtable discussion among reverse mortgage originators at the National Reverse Mortgage Lenders Association (NRMLA) Annual Meeting and Expo in Nashville, C2 Reverse’s Scott Harmes described the utility of an existing financial planner relationship with a prospective reverse mortgage borrower.
Harmes always asks a new client about whether or not they have a financial advisor, and shifts the conversation based on the response, he explained.
“There’s no wrong answer,” he said. “Because if it’s ‘no,’ [I ask] if I can refer [them] one. I have about a half-dozen financial advisors I work with on a regular basis, so then I’m bringing them business.”