According to results from Prudential’s study, “The LGBT Financial Experience,” lesbian, gay, bisexual and transgender (LGBT) individuals have unique financial concerns that advisers may be overlooking. Almost nine out of 10 LGBT survey respondents said a financial professional has never approached them about their specific LGBT financial-planning needs, despite only 25% of LGBT respondents saying their needs are similar to those of the population at large.
The study highlighted one of the key drivers of concern about retirement—the legal status of LGBT relationships, which can significantly affect financial planning. LGBT respondents reported being very concerned about the lack of Social Security or pension survivor benefits for same-sex couples, as well as legislation that negatively affects LGBT rights. Tax treatment, benefit inequality and inheritance rules for same-sex couples were also big concerns for LGBT respondents.
Overall, almost half of LGBT respondents said they are not confident they will have enough savings throughout their lives, or be able to maintain their standard of living in retirement.
Among LGBT study participants, Baby Boomers are most concerned about retirement. Many were affected by the recession, losing assets in the stock market and real estate close to their retirement age. In addition, the HIV epidemic has left many survivors taking early retirement through disability, leaving them economically challenged for the duration of their lives. Twenty-three percent of LGBT Baby Boomers report being retired, or living on income from disability and Social Security.
“We need to educate the financial services industry [about LGBT financial-planning needs], as well as the community,” Patricia Brzozowski, diversity director, Women’s Strategy and Military Veterans Strategy at Prudential, said during the LGBT Financial Experience event.
Michele Meyer-Shipp, vice president and chief diversity officer at Prudential, said advisers must identify upfront the needs of clients by asking specific questions such as, “What unique financial needs or concerns do you have?”
Before advisers can market to the LGBT community, they must educate themselves on these specific financial-planning needs, panelists emphasized.
The LGBT Financial Experience 2012–2013 Prudential Research Study was conducted by Community Marketing Inc. of San Francisco, which surveyed a diverse group of 1,401 LGBT Americans ages 25 to 68 from urban, suburban and rural communities throughout the 50 states in August 2012.