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It’s Pride Month and while that may be an impetus for advisors to focus on LGBTQ clients, various data points indicate that focus should be in place over every month in a year. Simple math confirms as much.
In a 2023 Gallup survey on LGBT identification, the percentage of U.S. adults identifying as LGBTQ was 7.6%, up from 5.6% in 2020 and more than double the 3.5% found in 2012. For advisors looking connect with younger prospects, it’s worth noting that survey points out the percentages of younger folks identifying as LGBTQ is significantly higher than the national average.
Other data points confirm members of the LGBTQ community want more investing guidance and are yearning to build wealth and nest eggs. Indeed, there are compelling bottom-line reasons for advisors when it comes to working with LGBTQ clients and garnering more new business from this group, but it’s like any other relationship: There are right and wrong ways to initiate and grow it.
LGBTQ clients are like any other group in that they have specific circumstances and needs. In order for advisors to be successful with this segment, those needs to be acknowledged and emphasized.
Why LGBTQ Clients Need Advisors
A case can be made that LGBTQ prospects should be working with advisors and advisors should want to work with this demographic. Consider some of the data pertaining to same-sex households.
“The 2022 American Community Survey from the US Census Bureau found that same-sex couple households had a higher median income than opposite-sex couple households, but both partners in same-sex couples were more likely to be employed. Male-male couples had the highest median income,” notes Morningstar.
The median household income for same-sex couples is slightly higher than that of opposite-sex couples, but the gap widens significantly when zeroing in on male-male couples. Plus, same-sex couples, regardless of composition, are far more likely to have both members of the couple be employed than are opposite-sex couples.
Those are among the reasons why advisors should consider working with LGQBTQ clients. Not to mention the point that, as noted by Morningstar, 14.6% of same-sex couples have children under 18 years old. That implies those prospects have the same motivations for working with advisors as do opposite-sex couples – estate planning, saving for college, etc.
Areas of Emphasis When Working with LGBTQ Clients
For advisors wanting to work with LGBTQ clients, they should acknowledge that rates of poverty are higher among this group while home ownership percentages are lower.
Additionally, LGBTQ clients are likely to be receptive to retirement planning advice and services because data indicate that members of this community are feeling less confident about their retirement outlooks and are more likely to have retired early than non-LGBTQ people.
“Across income groups, LGBT adults are less likely to be confident in having enough to live comfortably throughout retirement, according to the Employee Benefit Research Institute. LGBT adults also estimated later retirement ages than non-LGBT adults,” concludes Morningstar.