LGBT Investors, Despite Obstacles, Confident About Retirement Prospects

LGBT domestic partners want financial advisors with expertise in their unique needs, Wells Fargo study says

(AP Photo) (AP Photo)

Lesbian, gay, bisexual and transgender investors face several unique challenges in preparing for retirement, including those stemming from a lack of federal marriage and inheritance rights.

Yet in a recent nationwide Wells Fargo retirement survey, 61% of LGBT non-retirees said they felt confident they would have enough saved by the time they retired to live the lifestyle they wanted throughout their retirement, significantly higher than the 53% of the general population that says the same.

Despite this confidence, 36% of LGBT non-retirees said they would need to work during retirement in order to afford their lifestyle, compared with 41% of the general population.

The median amount LGBT non-retirees have saved for retirement was only 17% of what they expected to actually need. They believed they would need to save at least $900,000 in order to retire, and had saved on average about $150,000.

However, 62% of non-retired LGBT’s surveyed said they had not increased their retirement savings allocation in the past year.

Only about a quarter of the LGBT respondents currently had a detailed written plan for their finances in retirement.

Fifty-four percent of all LGBT respondents cited being recognized as equal citizens by society and the law as the most important reason for legalizing gay marriage, while 19% said having legal rights and medical decision-making on behalf of one’s partner was most important. Only 7% said legalizing gay marriage was not important to them.

LGBT survey respondents overwhelmingly reported that they would find value in information and advice on investing and preparing for retirement.

Wells Fargo said in a statement that it had created an Accredited Domestic Partnership Advisor program, through a partnership with the College for Financial Planning, to educate advisors about the unique needs and financial considerations of LGBT domestic partners. Today it deploys more than 100 ADPA-certified financial advisors nationwide.

The ADPA certification is offered by the College of Financial Planning and involves coursework and testing on "wealth transfers, federal taxation, retirement planning, and planning for financial and medical end-of-life needs for domestic partners," the college's website says.

“Each investor has different priorities, needs and life goals, and domestic partners and same-sex couples often have added concerns and questions about their unique financial situation,” Kyle Young, financial advisor and vice-president, investment officer for Wells Fargo Advisors, said in the statement.

“It’s especially important for LGBT investors to find financial advisors who are acutely aware of the challenges, laws and regulations that impact their investment planning needs. This additional knowledge affords clients encouragement in knowing that their needs will be heard, understood and thoughtfully explored.”

Approximately one in 10 LGBT survey respondents said they had heard of ADPAs. After listening to a description of ADPA advisor training and designation, 60% of gay men and 72% of lesbians said these credentials were important to them when working with a financial advisor.

Richard Day Research conducted the online survey on behalf of Wells Fargo Retirement between December 2 and December 18 among 505 adults ages 25 to 75 who identified themselves as lesbian, gay, bisexual or transgender. Comparisons were made with a similar national online sample of 1,190 respondents.

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