This document discusses how financial advisors can partner with HomEquity Bank to offer reverse mortgages (also known as equity release plans) to clients as part of retirement planning. Reverse mortgages allow homeowners over age 55 to access a portion of their home equity as cash without having to make monthly payments. This untapped partnership could help financial advisors increase assets under management, provide clients with stress-free retirements by protecting assets, and gain referrals. Examples are provided showing how reverse mortgages can be used for asset protection, investments, and early inheritances. The document encourages advisors to contact HomEquity Bank to learn more about partnering and receiving commissions for equity release plans.

1. AN UNTAPPED PARTNERSHIP
HELPING CANADIANS WITH PRUDENT RETIREMENT PLANNING
Steven Ranson | President & CEO | HomEquity Bank

2. 2
Agenda
1
HomEquity Bank
and equity release
(aka the reverse
mortgage)
Changing reality of
retirement
Impact on clients
Impact on financial
planners and wealth
management
Increasing AUM
Asset retention
Financial examples
The reverse mortgage:
NOT a solution of last
resort
2
Equity release: A
fundamental part of
retirement planning
3
Working together
4

3. 3
HomEquity Bank: a primer
$2.3B Portfolio
Only provider of
reverse mortgages
in Canada 13,500 clients
Founded in
Vancouver
1986
Grew 26%
2016
Became a
Schedule 1 Bank
2009

4. 4
Equity release – key features
Residential
first mortgage
Exclusively for
homeowners
over 55 years
of age
Mortgage is
not due until
the property is
sold or vacated
Recourse is
limited to fair
market value
of home at
time of sale
No monthly
payments
The HomEquity Bank reverse mortgage is a charge against title, just like any other
conventional mortgage. Client maintains ownership of the home at all times.

5. 5
Equity release – key benefits
Converts a
portion of
home equity
to tax free
funds
No payments
frees up cash
flow
Increases
financial time
horizon Clients never
owe more
than the fair
market value
of the house
upon sale
Protects
increases in
client assets

6. 6
Shifting demographics
THE EQUITY
RELEASE
SOLUTION
Canadians are entering
retirement with less saved and
more debt than ever before
The majority of assets
managed by financial
planners are for
Canadians 60+
Average senior is likely
to have cash flow
concerns within 10
years of retirement

7. 7
Retirement today
8.3M
Canadians 60+
88%
Of Canadians 60+
have less than
$1M in assets
2/3
Of all AUM are held
by Canadians 60+
Source: Statistics Canada & PriceMetrix.

8. 8
WEALTH
o 12% (996K) have more than $1MM invested
o 13% (1.1M) have between $750K - $1MM invested
o 25% (2.1M) have between $200K - $500K invested
DEBT
o Average Debt Balance $47,000
o 23% have a Mortgage – avg. balance $110,000
o 12% have a HELOC – avg. balance $75,000
LIFESTYLE
o Living longer – for a couple over 65, 50% chance one
person will live past 90
o 85% of Canadians over 60 own a home
o $85K average annual expenses for Canadians
entering retirement
The over 8 million Canadians 60+
8.3MCanadians 60+
Source: PriceMetrix, Statistics Canada & Equifax.

9. 9
IMPACT ON
FINANCIAL
PLANNING

10. 10
2016: Average client in Canada is
63 with $500,000 invested
2021: Average client will be 70 with
$250,000 invested
Increasing competition for clients
and book consolidation
Decreasing assets and lower risk profile of investments
Mutual fund trailer fee reform
New disclosure rules changing investment allocation
Impact on financial planning
Canadians 60+ account for roughly
66% of all invested assets in
Canada
Millennials are not investing as
their parents did
Average number of households per
advisor decreasing
Source: PriceMetrix

11. 11
Paradigm shift: the home is an active asset
TRADITIONAL
APPROACH
o Home is a dormant asset
o Investment redemption
o Tax inefficient
HOME AS
AN ASSET
o Home is an active asset
o Liquid assets protected
o Tax efficient
The home is the largest
asset for most Canadians,
yet it is only used when
other assets are depleted
o The home is still viewed by
many as untouchable
o It is an emotional decision
o Concern about equity erosion

12. 12
Canadians entering retirement will likely outlive savings
-$1000
-$800
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1000
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
Savings
depleted by 75
Retirement Age 65
Home Value $895,000
Debt $0
RRSP $450,000
Savings $200,000
Annual Expenses $71,500
$750K invested at retirement
with $72K in annual expenses,
depletes assets within 10 years
$Thousands

13. 13
Equity release can ensure a stress-free retirement
-$1200
-$1000
-$800
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1000
$1200
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
$340,000 Reverse Mortgage
Reinvested at 66 Investments
projected to last for
an additional 10 years
Age 85
Reverse Mortgage Balance $852,000
Remaining Home Equity $718,000
Home Value (3% appreciation) $1,570,000
$Thousands

14. 14
Strategic retirement planning
CLIENT SATISFACTION
Increase or maintain
income through
retirement to provide a
better lifestyle for your
clients and protect
against unplanned
expenses
CASH FLOW
Planners can create
same level of income or
more with much less tax
being paid or for some
provide a better lifestyle
or home care
TAX
You can control tax
brackets, avoid claw
backs but more
importantly get money
out of taxable scenarios
at the lowest tax rate
possible
PORTFOLIO MANAGEMENT
Clients are enabled to
stay in markets longer,
increasing investment
time horizon

15. 15
Equity release and financial planning
Referrals from
affluent
Canadians
accounted for
20% of all equity
release plans in
2016
Increase financial
time horizon and
provide peace of
mind for your
clients
Increase AUM
with existing
client base

16. 16
Average funded amount of affluent equity release clients
$2,885,645
$2,817,128
$609,428
$754,762
$370,965
$459,319
21.12%
26.79%
0%
5%
10%
15%
20%
25%
30%
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
55-69 70-84
Avg. Home Value Avg. Funded Amount Avg. Debt Avg. Loan to Value

17. 17
Equity release rationale for advisors
ASSET
PROTECTION
INVESTMENT
EARLY
INHERITANCE
OR UNPLANNED
EXPENSE

18. 18
Flexible ways for clients to release their equity
Options for clients
to release their
home equity
• All of the amount at closing
• A portion of the amount at closing with
further advances as needed
• A portion of the amount at closing
• Scheduled advances over time (e.g. monthly)

19. 19
How a client can protect assets with equity release
ASSET
PROTECTION
CLIENT Mrs. O’Brien a 73 Year old recent widow
SITUATION o $1.4M Home, $300K HELOC with monthly payments
of $2,500
o Investments depleting rapidly
o $2,000 monthly deficit
o Wanted additional funds to travel and enjoy
retirement
SOLUTION o Referred by financial advisor
o Took a $500,000 lump sum, paid off debt
o Advisor used the remainder to invest and create an
income stream to provide cash flow for travel and
lifestyle.

20. 20
Financial illustration – asset protection
Age 73 83 93
Reverse Mortgage Balance $ 500,000 $ 851,184 $ 1,448,803
Home Value (3% Appreciation) $ 1,400,000 $ 1,881,483 $ 2,528,556
Remaining Home Equity $ 900,000 $ 1,030,299 $ 1,079,753
% of Equity Remaining 64% 55% 43%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93
Initial Advance Accrued Interest Remaining Home Equity

21. 21
Using a reverse mortgage for investments
INVESTMENT
CLIENT Mr. and Mrs. Adams - 68 and 66 years old
SITUATION o Husband retired at 65 – was earning $200,000 per
year, no pension
o Central Toronto home with no mortgage worth
$2.3MM
o $800,000 invested with advisor
o Desired annual expenses: $115,000
o Rapidly drawing down investments to support
lifestyle, likely to run out of money by 78
SOLUTION o Referred by advisor and approved for a $862K CHIP
Reverse Mortgage
o Proceeds were reinvested to bolster retirement
savings
o Investments projected to support clients until their
late 90s
o The Adams referred 2 new clients to the advisor

22. 22
Financial illustration – investment
Age 66 76 86
Reverse Mortgage Balance $862,500 $1,468,196 $2,499,022
Home Value (3% Appreciation) $2,300,000 $3,091,008 $4,154,056
Remaining Home Equity $1,437,500 $1,622,812 $1,655,034
% of Equity Remaining 63% 53% 40%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
Initial Advance Accrued Interest Remaining Home Equity

23. 23
Equity release proceeds for a gift
CLIENT Mr. Gordon a 65 year old widower
SITUATION o Earning $300,000/year
o $2.6MM home in north Toronto
o $900,000 invested for retirement
o Wants to cut back on work and help out his son
with an early inheritance
o Would like additional income to travel, golf and
enjoy time at the cottage
SOLUTION o Referred by advisor and was approved for a
$650,000 Income Advantage reverse mortgage
o Took $300,000 for his son (at closing) and $10,000
quarterly for travel/lifestyle expenses
o Mr. Gordon can help his son and have the flexibility
to partially retire
o Advisor gained the son as a new client
o Retirement savings have been protected
EARLY
INHERITANCE
OR UNPLANNED
EXPENSE

24. 24
Financial illustration – gift
Age 65 75 85
Reverse Mortgage Balance $300,000 $1,011,178 $2,163,970
Home Value (3% Appreciation) $2,600,000 $3,494,183 $4,695,889
Remaining Home Equity $2,300,000 $2,483,004 $2,531,919
% of Equity Remaining 88% 71% 54%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
Initial Advance Accrued Interest Remaining Home Equity

25. OUR UNTAPPED
PARTNERSHIP

26. 26
Working together
You own the client
relationship; we
do all the work
Increase assets on
existing client base
Commissions paid
on all initial and
subsequent
advances
We provide
marketing and
client service
support as needed

27. 27
Anyone on title and both spouses (even if
one is not on title) must be 55 or older
Own their home
Home must be primary residence
Valid and adequate home insurance
Who qualifies?

28. 28
Cost of HomEquity Bank equity release
* Including any other legal work required by client’s lawyer e.g., title issues
Appraisal Costs
(~$300)
Closing Costs
($1495)
Interest Rates
(~5.5%)
Independent Legal
Advice Costs*
(~$500)

29. 29
Recall: equity release features and benefits
$
Regular payments are not
required until they
no longer live in the home
Clients will never be forced to move
or sell (provided they pay property
taxes and home insurance)
Ability to unlock up to 55%
of their home value into
cash
$
Clients can confidently expect
to have equity in their home if
they decide to sell
Proceeds are
tax-free

30. 30
In conclusion…
To find out more about this exciting partnership opportunity:
1. Contact Mike Werry, Director of Sales, at mwerry@homequitybank.ca
2. Visit chipadvisor.ca/enriched-retirement
8.3 Million
Canadians 60 and
over and 2/3 of
all AUM are held
by this group
Equity release
should be a
fundamental part
of retirement
planning.
Home needs to
be considered an
active asset in
retirement
planning.
You can maintain
and grow your
AUM with
existing clients.

31. 31
Question and answer session