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As a gay millennial, I’ve been extremely fortunate to grow up in the times that we’re living in today. I have supportive parents, haven’t faced much adversity among friends or the communities I’m a part of, and I’m not afraid to tell people I’m gay if it comes up in conversation. But it’s not lost on me that the generations before me had a much more difficult time being openly gay (if open at all), between basic legal rights and public and private discrimination for being gay.
With that said, I know that the world we live in is still not all sunshine and rainbows. There is still a (hopefully) dwindling part of the population that is full of hate for the LGBTQ+ community. This unfortunate truth is what drove my husband, Chris, and I to start our financial planning practice, Spark Wealth Advisors.
During my career as a financial advisor at one of the most recognized names in the industry, I noticed something. Probably less than 5 of the thousands of households I came across identified as LGBTQ+. How can that be? According to the Williams Institute at UCLA, approximately 5.5% of the population identifies as lesbian, gay, bisexual, or transgender (LGBT). Sure that’s a small percentage of the population, but 5/1000 = 0.5% or 1/10th of that!
My thought, which I later confirmed via Reddit, funny enough, was that the LGBTQ+ community fears judgment when it comes to working with a financial professional, and thus simply does not seek the help they deserve with their finances. A competent advisor doesn’t just ask about your account balances and when you want to retire. A proper financial planner should have a deep understanding of your family structure (yes, I’m talking about your poodles, too), values, lifestyle, and what’s most important to you in life. And let’s be honest, we live fabulous lifestyles that the straights just wouldn’t get!
Knowing this, I believe most of the LGBTQ+ community that wants financial advice, doesn’t seek it out of fear of judgment from a random advisor. Of course, we’re not the first gay advisory firm to exist, but very few advertise themselves as specifically catering to the LGBTQ+ community, making them hard to find.
I get it, a lot of people out there are DIYers with their finances, gays are no exception. But financial planning is seldom done by DIYers. Financial planning is the process of aligning your money with your unique values, as well as planning for retirement and other goals. It’s an ongoing process that requires more than a few minutes per quarter rebalancing your portfolio.
Insurance, cash flow/budgeting, tax planning (not filing, but forward-looking strategies to reduce your lifetime tax bill), estate planning, investments, and employee benefits are all part of the big picture when it comes to financial advice. Despite the higher dual-income nature of most gay households, some still find themselves drowning in debt or behind on retirement savings. This is one of the reasons the LGBTQ+ community needs more financial advisors to call their own.
Legal complexities surrounding same-sex partnerships further compound these challenges. While significant strides have been made in recent years regarding marriage equality and LGBTQ+ rights, disparities in legal recognition and protections still exist, particularly in areas such as marriage laws, adoption, and parental rights. These legal uncertainties can have profound implications for financial planning, adding layers of complexity and uncertainty to an already intricate process.
Beyond legal considerations, the LGBTQ+ community often has distinct financial goals and priorities compared to our heterosexual counterparts. Factors such as healthcare costs, retirement planning, and estate planning take on added significance within the LGBTQ+ community, driven by unique health needs, family structures, and societal dynamics.
Adoption and surrogacy also pose unique financial considerations that any old advisor may not be familiar with. Some resources we regularly review are:
During our working years we may not have much of a choice where we live, but part of retirement planning for the LGBTQ+ community includes where to live. At Spark we do extensive research on LGBTQ+-friendly cities and states for retirees that are also walkable (if desired), have warm climates, and whatever other preferences one may have.
It becomes clear that the LGBTQ+ community requires specialized support and guidance in navigating their financial journeys. From understanding the nuances of legal frameworks to addressing the specific financial needs and concerns of LGBTQ+ individuals, there is a compelling case for having a gay financial advisor who not only knows the ins and outs of investments, taxes, and social security, but also has the cultural competence as well.
The best financial plan is one you can stick to long-term. Like life itself, our financial pictures are ever-changing. As such, financial planning is an ongoing process that needs regular updates. When choosing a financial professional, consider how likely you are to reach out to them when life happens. You should view your financial advisor as a friend and a guide that you can call on without fear of judgment around any of life’s decisions.
At Spark we truly believe that sharing an identity with our clients is key to success. If you’re ready to make progress on your financial goals together, schedule a call today.
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