One of the most promising opportunities lies within the 55+ demographic—a segment that is rapidly growing and facing unique financial challenges, particularly when it comes to retirement.
This group represents a trillion-dollar opportunity, and savvy brokers can capitalize on it by offering tailored financial solutions. But success with this market requires more than just having the right products. It’s about understanding their needs, addressing their concerns, and communicating in a way that resonates with them.
So, how can brokers effectively connect with and support their 55 and better clients while simultaneously growing their business? The key lies in three main areas: addressing the retirement financial shortfall, providing specialized lending solutions, and using language and communication strategies that resonate with this demographic.
The retirement financial shortfall: An urgent issue
Recent research from Deloitte Canada highlights a pressing issue for Canadians nearing retirement: many are simply not prepared financially. In the next decade, an estimated three million Canadian households will enter retirement, and the vast majority are not financially ready to support the lifestyle they envision for their golden years.
The study indicates that for a typical household to maintain a middle-class lifestyle throughout retirement, they should save at least $560,000. For basic living needs, a minimum of $340,000 is required. However, many Canadians are falling short of these figures. This shortfall presents a significant challenge—especially given that people are living longer, and unexpected expenses, such as healthcare costs and major home repairs, can arise during retirement.
These financial pressures are prompting a growing number of Canadians over the age of 55 to seek additional financial support during their retirement years. For mortgage brokers, this is a prime opportunity to offer solutions that can help these individuals achieve the financial security they need.
The broker’s role in supporting 55+ clients
Mortgage brokers have a crucial role to play in helping their clients navigate their retirement years with greater financial stability. One of the most effective ways brokers can do this is by expanding their product offerings to include specialized financial products, such as the CHIP Reverse Mortgage, that cater specifically to the needs of clients 55+.
The CHIP Reverse Mortgage by HomeEquity Bank allows clients to unlock the equity in their homes without the need for monthly mortgage payments. This can provide a significant source of cashflow to support living expenses, healthcare costs, or even large purchases that would otherwise be out of reach.
The CHIP Reverse Mortgage has become an increasingly popular choice among the 55+ demographic because it allows them to stay in their homes—something that over 93% of Canadians over 55 say they prefer—while also offering financial flexibility. HomeEquity Bank has been a leader in the reverse mortgage space for over 37 years, helping Canadians access the value of their homes to support their retirement goals.
By offering reverse mortgages, brokers can address the financial concerns of their 55+ clients while positioning themselves as specialists who understand the unique needs of this growing demographic. Brokers who take the time to understand these products and how they can benefit older clients will not only serve their clients better but will also grow their own businesses by tapping into an under-served market.
Connecting with the 55+ demographic: Breaking age bias
While having the right products is essential, it’s equally important for brokers to understand how to communicate effectively with the 55+ demographic. Research has shown that the language and imagery used in marketing and communication play a significant role in how this audience perceives a business.
HomeEquity Bank conducted a neuroscience study to understand how 55+ Canadians respond to marketing messages. The findings revealed some key insights that brokers should keep in mind when interacting with this group:
- Avoid stereotypical labels
One of the most significant findings of the study was the dislike for stereotypical labels such as “senior” or “elderly.” In fact, 80% of Canadians over 55 disliked being called “senior,” and many preferred no label at all. Instead of focusing on age-related terms, brokers should speak to their clients’ lifestyles, interests, and values. This shift in focus helps create a more positive and engaging experience for the client.
- Portray them as active and empowered
The 55+ demographic today is living longer, healthier, and more active lives than previous generations. As a result, they don’t see themselves as frail or elderly—instead, they see themselves as empowered and capable. Brokers should reflect this perception in their marketing and communication materials. For example, choosing imagery that depicts active, adventurous, and enthusiastic individuals can help align with how the 55+ group sees themselves.
Nostalgia is a powerful theme for the 55+ demographic. This group has lived through significant life experiences and often reflects fondly on the past. By incorporating elements of nostalgia into your marketing strategy—whether through language, imagery, or storytelling—brokers can create an emotional connection with their clients. However, it’s important to balance this by not focusing solely on the past, as that can increase anxiety about the future. Brokers should strike a balance by celebrating past experiences while also encouraging clients to look ahead with confidence.
- Highlight their role as mentors
The 55+ demographic places high value on being role models for future generations. Many of them want to leave a legacy, whether by helping their children purchase homes or contributing to their grandchildren’s education. Brokers should take the time to ask their 55+ clients about their family goals and explore how financial products like reverse mortgages can help them achieve these goals. This approach not only strengthens the client relationship but also taps into a key motivator for this demographic—helping their loved ones succeed.
As we age, we require more cognitive resources to process information. The 55+ demographic appreciates information but prefers it to be presented in clear, simple terms. Avoid overwhelming clients with too many details at once, and instead, focus on delivering the information in digestible chunks. Tailoring your communication to their needs can help ensure your message resonates and is well received.
Growing your business by serving the 55+ market
There’s no denying the potential that lies within the 55+ demographic. This group is not only growing but also facing unique financial challenges that mortgage brokers are well-positioned to address. By expanding your offerings to include reverse mortgages and refining your communication strategies, you can effectively serve this market and grow your business.
Mortgage brokers who take the time to understand the retirement financial shortfall, offer tailored solutions, and communicate in a way that resonates with the 55+ demographic will be well-positioned for success. With a growing population of Canadians entering retirement each year, the demand for financial support is only increasing. And with the right approach, brokers can help their clients achieve financial stability while positioning themselves as trusted experts in this lucrative market.
Now that the secret to growing your business with Canadians 55 and better is out, it’s time for you, our mortgage broker partners to take action. Contact your HomeEquity Bank BDM/BDA at chipadvisor.ca/bdm or visit chipadvisor.ca for more information and get started!
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Last modified: September 24, 2024