Photo credit: <a href = "">Stuart Miles</a>

Though as a whole members of the Lesbian, Gay, Bisexual and Transgender (LGBT) community exhibit higher incomes than the general population, they have special concerns that financial advisors need to address if they want to serve that population.

That was one of the takeaways from a panel discussion held yesterday in New York City that detailed the findings of Prudential’s first-ever study of the financial status of the LGBT community. “The LGBT Financial Experience” found that members of that group have a median household income of $61,500, well above the U.S. median household income of $50,000. Individually, gay men earn more than lesbians ($49,000 versus $43,500); however, lesbians have higher household incomes ($63,700 compared to $62,300). That’s due to more lesbians living in dual-income households, according to the study. Although gay male couples have the overall highest household income at $103,000, only 19 percent of the LGBT population are gay male couples.

The survey, conducted by Community Marketing Inc., polled 1,400 LGBT Americans between the ages of 25 and 68 from across the country in urban, suburban and rural areas. No income or other criteria was required to participate.

Overall, members of the LGBT community are reasonably confident about their finances and the economy, scoring 48 out of 100 on Financial Confidence Index score of 48 out of 100. Gay men are more confident than lesbians, while Gen Y’s are more confident than baby boomers.

Compelling numbers, unique needs

Though those income figures and the disposable dollars they represent may tempt financial planners to reach out to the LGBT community, Prudential experts cautioned that this group has special needs and concerns, chiefly revolving around legal questions regarding same-sex couples. As Michele Meyer-Shipp, chief diversify officer at Prudential, pointed out, those issues have an impact on estate planning, survivor benefits from Social Security and passing on assets to heirs.

Three-quarters (75 percent) said it is important for an advisor to understand their unique needs, but nearly nine out of 10 said they have never been approached by a financial professional to address those issues.

John Myung, chief legal officer, international insurance, at Prudential, said that he has been approached by financial advisors, but more because he is a financial services industry executive rather than a gay man. “There is a lack of understanding by financial advisors and firms about the unique needs of the community,” he said.

Pat Brzozowski, diversity director, agency distribution, for Prudential, said that an understanding of the community must come before the actual selling of products. To uncover whether a prospect or client is LGBT, she suggested asking about the person’s family circumstances, much as an advisor would if he wanted to know if there is a special needs child or ailing parent at home. “You don’t need to ask, ‘Are you gay?’ ” she said.

In some respects, the LGBT community is much like the general population: They are worried about funding a secure retirement and 78 percent report they are already saving for their golden years.

In fact, the Prudential study found an employer-sponsored retirement account was among the three core financial products held by the LGBT community along with life insurance and a savings account. That leaves the door open to present other financial products to the group, Meyer-Shipp noted.

About a quarter of boomers own individual stocks and 10 percent of legally recognized couples hold annuities.

Also on the panel was actor Wilson Cruz, who said that it is just as important to educate the LGBT community on financial issues as it is the financial services industry. “We need to empower ourselves and seek help,” he said. “This study could be a catalyst for those conversations.”

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