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.