The article “How Financial Professionals Can Be Better LGBTQ+ Allies” provides practical advice on how advisors can better serve LGBTQ+ clients. I think it’s spot-on, and not coincidentally, I’m quoted.
For those who aren’t familiar, it might seem strange to see this article—or any article—discuss how to serve the LGBTQ+ community. After all, financial advice is financial advice, right? Unfortunately, many advisors are not familiar with the financial issues and nuances faced by the LGBTQ+ community. Even more unfortunate, some advisors are uncomfortable (or worse) with serving LGBTQ+ clients.
LGBTQ+ Community Needs Trusted Advisors
This community has a big need for trusted advisors—ones who know their stuff and will treat them with respect and acceptance. The community’s experiences with financial (and legal) advisors range from OK to awkward to downright horrible.
Ryan Peacock, founder of Peacock Law in Nashville, Tennessee, told me of a client who was fired by her longtime CPA when she informed him that she had gotten married to a woman. He was fine serving her as a single woman, but when he found out her spouse was a woman, he dropped her. As her attorney, Peacock was able to provide her with a referral to a gay-friendly firm. “Having a well-researched list of referrals—who I’ve met face to face—is essential,” Peacock says. “Clients deserve advisors who see them as real people, who know the ever-changing legal and tax landscape, who will treat them with respect, and who will not make rude comments or ask inappropriate questions.” Peacock herself has been there; she was kicked out of college for being gay!
Reform Rabbi Tamar Malino experienced professional discrimination when she was booted from a conservative Jewish rabbinical seminary for being gay. Yet, having to switch gears careerwise was relatively easy compared with the winding road of legal relationship status. Rabbi Malino was in a long-term relationship with her partner for many years before their first set of twins was born. Since her partner was the birth mother, Rabbi Malino had to jump through legal hoops to adopt her own children. She was even required to get the donor to legally relinquish his rights. By the time the couple moved to California’s Bay Area, their relationship was legally recognized as a domestic partnership. Thus, the second set of twins, carried by Rabbi Malino, actually had her partner’s name on their birth certificates. While in the same relationship in California, Rabbi Malino and her partner went from no legal recognition, to domestic partnership, then to married. But when they moved to Washington state, their marriage was no longer valid. It took several years before Washington would recognize their marriage. Now divorced, Rabbi Malino has had to deal with myriad legal issues. “We had to create legal structure outside of a frame,” she says. “It was very expensive.”
How did Rabbi Malino find her financial and legal advisors? As with many in the community, it was through referrals. “A member of the LGBTQ+ community cannot simply go to the internet and pick an advisor,” Peacock says. “A referral from a trusted source is the way most in the community find someone they can feel comfortable with.” And, it’s not just a question of comfort. Peacock says, “There are so may twists and turns in the law, anyone serving this community must be on top of it all and be able to pivot as changes happen.”
Retired Army Col. Stewart Bornhoft served during the “don’t ask, don’t tell” period. A decorated 20-plus-year veteran, Col. Bornhoft had to navigate joint finances with his partner, who was active military early in their relationship. He recalls wanting to open a joint bank account before same-sex marriage was legalized. Knowing that most banks wouldn’t allow unmarried couples to open a joint account, he and his partner went to a bank located in the gay-friendly Hillcrest community in San Diego. When looking for a CPA and investment advisor, the couple referred to a directory published by the San Diego Equality Business Association, an organization that promotes and supports LGBTQ+ businesses (and their allies).
Advisor Competency Is Key, Too
Dana Toppel, chief operating officer at Jewish Family Service of San Diego, feels lucky that she has a great financial advisor: Marci Bair of Bair Financial Planning. She became a client of the firm because she knew Bair personally and because the firm has more than 30 years of experience working with women in leadership and LGBTQ+ families. Married with a child, Toppel has been around to deal with the challenges before same-sex marriage was legal in all 50 states. “You need advisors who get it,” she says. “Even with marriage equality, two women live longer and earn less on average than male or heterosexual couples. This can affect financial planning, insurance, and other areas.” Like others interviewed here, Toppel tries to work with attorneys and other advisors who have been referred by a trusted source. Unfortunately, that’s a big issue. “You can find someone who is a member or friend of the community, but that doesn’t mean they’re competent,” Toppel says. “Or you can find someone who is competent, but you feel uncomfortable working with them.” And once a trusted advisor relationship is in place, Toppel is concerned with their succession planning. Will the successor have the same gay-friendly commitment as well as the competency?
A good financial advisor doesn’t eliminate all the issues. Toppel is not as comfortable with her CPA and attorney. She worries about their knowledge of the laws and issues that affect her and her family. “We have to be so careful,” Toppel says, “You share everything with your advisors. It’s so personal.” And she’s periodically reminded that not everyone is supportive. For example, on her son’s last birthday, she and her wife decided to treat him to a pedicure, at a shop the couple often frequented. When the technicians realized they were two mothers, the attitude changed markedly.
Advisors have an opportunity to serve the LGBTQ+ community. These are people in desperate need of high-quality advice. But you should only market to this niche if you are truly an ally and are willing to educate yourself on the laws, rules, and complexities affecting the community.
The opinions expressed here are the author’s. Morningstar values diversity of thought and publishes a broad range of viewpoints.