Why LGBTQ+ Financial Planning is Unique and What Questions to Ask a Potential Financial Advisor

​Perhaps you are one of many same sex couples wanting to buy a house. Maybe you're transitioning and about to get married.

Planning for your financial future, whether creating a budget, retirement planning, researching investments, estate planning, or even just asking for advice are important steps for any individual or family.

Although milestones have been achieved towards marriage equality, LGBTQ+ rights, and equality for same sex couples, there is still quite a road ahead in terms  LGBTQ+ community access to mainstream financial planning.

The Obergefell decision on June 26, 2015 overturned Baker and requires all states to issue marriage licenses to same-sex couples and recognize same-sex marriages performed in other jurisdictions.

The landmark civil rights case gave same-sex couple the right to marry nationwide.

Obergefell granted access for the LGBTQ+ community to more than 1,100 federal benefits; things like spousal protections in the event of death, filing joint tax returns and putting spouses on health insurance on a pre-tax basis.
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However, many complications persist in relation to these issues and LGBTQ+ financial planning for those who...

​are happily single, in a partnership, or entering into marriage.

Hey Financial Industry! Pay Attention to This Growing Group

According to prideco-op.com, LGBTQ+ is the fastest growing market segment in the United States, with 1.4 trillion+ spending power.

2021 U.S. government census data showed household income, at nearly $130,000 for gay couples, is approximately double the national average.

91% of LGBTQ+ adults aged 22+ are employed full-time.

The "Rich Gay Myth"

The "Rich Gay Myth" suggests that all members of the LGBTQ+ community are rolling in money.

A survey by the Motley Fool and Debt Free Guys showed that LGBTQ+ Americans are less likely to use financial tools, like retirement savings, life insurance, and estate plans.

Two-thirds of LGBTQ+ Americans carry a high amount of financial burden.

Keeping up with the cost of living and being ready for a financial emergency are top of the list when it comes to personal finance concerns.

Half of LGBTQ+ Americans have experienced discrimination by someone in financial services.

LGBTQ+ Americans are more likely to have student loan debt, credit card debt, and personal loan debt than Americans overall.
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LGBTQ+ Americans are also less likely to have a mortgage or auto loan.
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LGBTQ+ Unique Financial Challenges

Healthcare

A recent survey by Healthcare.com showed one in eight LGBTQ+ Americans said they have experienced health insurance discrimination from their healthcare provider.

One in five Millennial and Gen Z respondents said they've experienced discrimination from their healthcare providers. The health insurance website asked 520 Americans who identify as LGBTQ+.

Are things looking up? 1 in 3 think health insurance coverage is improving for LGBTQ+ Americans.

LGBTQ+ Income Gap

A Williams Institute at UCLA School of Law report showed homosexual men tend to earn less than heterosexual men.

A Human Rights Campaign analysis of nearly 7,000 full-time LGBTQ+ workers showed median earnings were about $900 weekly, about 90% of the $1001 median weekly wage a typical worker earns in the United States.

That means LGBTQ+ workers earn 90 cents for every dollar that the typical worker earns.

It's even less for LGBTQ+ people of color, transgender women and men, and non-binary individuals.

There are also concerns involving staggeringly high rates of discrimination and harassment in the workplace, including the loss of jobs.

Protecting Your Partner if You Choose Not to Marry

Protecting your partner if you choose not to marry is an important concern for any couple.

Power of Attorney can grant your partner legal authority to manage your affairs.
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Writing a will can ensure your estate goes to those you choose.

​Financial Planning For the LGBTQ+ Community

With these unique circumstances, financial planning for the LGBTQ+ community comes with its own set of requirements.

Are you planning for a family?

Do you want to live in an area that is highly populated with other members of the LGBTQ+ community? Often those areas are urban, and more expensive.

Perhaps you have complicated family dynamics and you are playing "catch-up" on your finances.

Did marriage recently become an option for you and your significant other after many years together? Will you blend your finances?

Ask Those You Trust For Recommendations

In order to find an LGBTQ+ friendly financial advisor, ask your circle of friends and relatives. Nothing beats a word-of-mouth reference from someone you truly trust.

Find LGBTQ+ community networks in your area. These groups may have recommendations or even free or low-cost financial planning opportunities.

You can also search online for “LGBTQ financial advisors” or “Pride financial planning.”

This will help you find firms that have experience working with the LGBTQ+ community and are familiar with the unique challenges faced.

With LGBTQ+ planning, a unique set of financial and legal questions can arise, and you will want to find the right services for your family.

Should You Hire a Certified Financial Planner?

Once you find someone you want to speak with, see if they have clients who would be willing to speak with you about their experience. Financial planning is confidential, so there may not be a client who is willing to speak to you. It never hurts to ask, though!

When meeting with a potential firm, Investopedia suggests asking a unique set of questions.
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• Have you worked with LGBTQ+ clients before? How many?
• Have you worked with same-sex couples before?
• Can you walk me through specific financial challenges that LGBTQ+ individuals face?
• Can you tell me about laws in this state that can impact productive financial planning for LGBTQ+ people?

Trust Your Instinct

Is this person right for you? What type of financial services are offered? Do you think they see eye to eye on your wealth management, retirement planning, investments, values, plans for your assets, and overall goals for the future?

Go with your gut when it comes to the best way to protect you and your family.

Whatever you do, do not put off financial planning.

At a minimum, do research. Watch YouTube videos. Listen to podcasts. Read personal finance books. 

Set achievable goals and reward yourself for making progress towards a more secure financial future.

Even if the only thing you have done so far is reading this article, you have made progress in planning for your financial future.