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FLIPPING THE SCRIPT For American Advisors Group CEO Reza Jahangiri, changing the face of the reverse mortgage industry wasn’t without its challenges
THE ODDS weren’t in Reza Jahangiri’s favor when he decided to start American Advisors Group [AAG] more than 10 years ago. The decision came at the height of the financial crisis – a time when Americans viewed reverse mortgages with a heaping dose of skepticism. So how was Jahangiri able to build AAG from the ground up in a volatile market to become the top reverse mortgage lender in the country? “When my friend introduced me to reverse in 2004, it just really resonated with me,” Jahangiri says. “I saw an opportunity based on the actuarial nature of the product and that there was a real need for it, along with the secular trend of aging demographics. Also, there were so many misconceptions. So to me, that translated into an opportunity to share the real story – that a reverse mortgage can empower seniors by tapping into their home equity to help fund retirement.” Joining the industry Jahangiri incorporated AAG in late 2004 and formally launched the operations in July 2005. Unfortunately, he says, challenges began to arise in the company’s early years – 2007 and 2008 – during the credit crisis. “At that stage, we had to decide whether to stay very nimble and small and ride the market downturn, or move to raise capital at a challenging time in the economy. It was a difficult decision to make.” In late 2008, the market began to turn, and Jahangiri decided it was time to raise
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capital. He recruited a senior team of executives formerly with the Senior Lending Network and then teamed up with JAM Equity Partners in early 2009. “JAM, like us, still believed in the industry,” Jahangiri reflects. By mid-2009, they wrapped up fundraising and began to build out AAG’s management team. With JAM’s money, AAG invested heavily in growth infrastructure – moving to mortgage banking, phone systems, software, mul-
Then Jahangiri’s team started to get creative and began selling leads, and in 2010, AAG hired former US Senator Fred Thompson as its spokesperson. “We stuck to our guns and believed in the business,” Jahangiri says. “It was a defining moment to see Fred Thompson on air for AAG the first time and celebrating with the team after being in a distressed situation just months before,” Jahangiri adds about one of his most memorable moments at AAG. “Also, I’ll never
“If your house is clean, then you can take care of your customer. I think if you focus on short-term goals and gratifications, you’re never going to be able to build a long-lasting, sustainable business” ti-state expansion, compliance systems and television commercials. However, shortly after the company recruited Mission Impossible actor Peter Graves for its national marketing campaign, he passed away. With the death of their first spokesperson and a market in recession, Jahangiri says the first years were challenging. “I remember at that time going to the board and asking, ‘How do we pivot and re-establish the brand now that we’ve made such a large investment in?’”
forget how we all felt when we learned AAG moved into the top lender spot. We had always thought of ourselves as the underdog, and becoming number one was a great achievement – one that I’ll never forget.” While 2014 was a tough year for the reverse mortgage industry as a whole due to new regulations, AAG grew its wholesale business by more than double and increased overall market share from 12% in 2013 to 24% by the end of 2014. “AAG was the top grower in
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6/02/2015 4:06:22 AM