You, of Tender Years, Can’t Know the Fears, Your Elders Grew By
Written by Stephen Kinney
The turmoil in the financial markets in the past few weeks, and recent experiences with my own parents got me thinking about the words of my favorite Crosby, Stills, Nash, and Young song “Teach Your Children”: “And you, of tender years, can’t know the fears, that your elders grew by, and so please, help them with your youth.....”
To me, these words are about the importance of sharing life experiences between parents and children. Last November my mom called me because my father was having difficulty managing their day-to-day finances. My 79-year-old father, who until recently worked a 35 hour week, had begun suffering from the effects of advanced Diabetes and Parkinson’s disease.
Now my mother was faced with the challenges of my dad’s declining health, and taking over the household finances. She was completely unprepared. Over the next few months I spent days going through their paperwork and the household finances, tracking down assets, and trying to make sense of the investments, insurance, and annuities they had accumulated over the years.
While my father was doing the best he could, I was shocked to discover that over the years he had been victimized by investment, insurance, and annuity schemes, as well as trusted investment advisors who put the amount of the commission they made ahead of my parent’s best interests.
Over the years I rarely had conversations with my father about their finances. When I did they were usually brief. Occasionally, I would see a bank or investment statement and quiz my dad about them. I expressed concern over the performance of these funds and my dad would respond, “I trust Mary Smith (not her real name), she handles our investments.” In hindsight, I regret letting it go, but I was afraid of prying.
Adult children often don’t ask their parents about their finances, and seniors are often reluctant to talk about them. A recent survey by Crestwood Associates for lender Golden Gateway Financial backs this up. The survey indicated that 50% of seniors have not had an in-depth discussion about their own finances with their adult children. More telling is that nearly 40% of the seniors surveyed had not discussed their finances with their children because “that’s the way they wanted it”.
Past research reveals that seniors are concerned about privacy or not wanting to burden children with such matters. However, for many seniors and their children, not talking about their finances is a serious mistake.
The turmoil in the stock and credit markets must be very frightening to seniors. Even if they didn’t live through the depression, senior parents grew up in a simpler time; well before mortgage backed securities and credit default swaps. Unless they’ve been very diligent, it’s likely they have not kept pace with changes in modern investments and finances. Heck, Wall Street doesn’t even understand them. The sophistication of modern investments, combined with the overwhelming variety of complicated options, make seniors easy targets for smooth talking investment advisors who are not necessarily looking out for their best interests.
Children of senior parents grew up in a different time; we are more familiar with these products. Even seniors with children who have limited knowledge of investments can make wiser choices by seeking help from a child. Children can help research a prospective investment, helping parents to ask the right questions, read the fine print, or find an ethical advisor. Children who get involved in parents’ finances benefit by gaining perspective on their parents’ retirement, and their own. Lessons learned from parents’ years of experience will benefit their own investment and retirement planning.
In the reverse mortgage industry we struggle with stories of seniors victimized by unethical originators every day. We’ve all seen how each of us becomes a victim when just one person in our industry takes unfair advantage of a senior. Thirty-two percent of reverse lenders in a recent survey indicated that negative publicity was the cause of loss of business. With more than 1300 new lenders entering the industry this year alone, each of us has responsibility to insure seniors are making an informed, thoughtful decision, and to guard against a few unscrupulous originators taking advantage of seniors. NRMLA has set up procedures to report abuses, so protect seniors and your industry by making them aware of originators abusing borrowers.
In my training classes I often teach participants methods and techniques to develop trust. I do this because I truly believe it is in every senior’s best interest to understand what a reverse mortgage can do for them. Without trust, few seniors will take the time to listen to all you have to teach them. With that trust comes the responsibility to do your best for them, and that entitles your to earn a fair return in the process. Sometimes doing right means losing a sale, but the trust you earned will likely pay you back three-fold in positive word of mouth, referrals, and a place in Heaven.
So what’s the moral of the story? For you and your parents; Insist on getting involved! Even against your parents protest, let them know in the end all decisions are theirs, but two heads are better than one. Each of you will benefit from the exercise and each other’s perspective.
For your clients; get seniors and their children talking about finances. Invest in yourself and your clients by reading everything about reverse mortgages and seniors. Invest in a comprehensive training program and become an expert in your field. You may not be able to do the job of a certified financial planner, but your clients will benefit and your sales will grow. Take a little extra time, preferably with children present, to do a cash flow analysis of how a reverse mortgage may (or may not) help them live a happier, more comfortable life.
“And you, Who are on the road, Must have a code, That you can live by.” - Crosby, Stills, Nash & Young
Stephen Kinney is CEO of Stephen Kinney Associates a company that specializes in training and consulting services to the reverse mortgage industry. Stephen has 26 years experience in the mortgage industry and an expert in reverse mortgages.
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