Close Close

Financial Planning > Tax Planning

Your financial advisor wants to know if you’re gay

Your article was successfully shared with the contacts you provided.

(Bloomberg Business) — The insurance salesman must have noticed that Carl Streed Jr. was wearing his engagement ring, because he started referring to Streed’s wife. Streed didn’t say anything at first. But when the guy asked how to spell her name, Streed says, “I just took the pen and wrote: ‘CHAD.’”

More and more professionals who advise on personal matters—from lawyers to doctors, from financial advisors to the mattress store—are realizing they need to know whether, when, and how to talk about their clients’ sexual orientation. The alternative is awkwardness, or even a lost customer.

(Streed, a 29-year-old doctor who lives in Baltimore, gave the guy another chance.) Cluelessness about lesbian, gay, bisexual, and transgender issues can also result in bad advice. 

Here are some tips on how to adjust to the new etiquette, based on conversations with LGBT people and advisors who specialize in LGBT clients. It isn’t the G-word.

It isn’t the G-word

Mani Cavalieri doesn’t mind if you know he’s gay. Nor does the 27-year-old New Yorker, a database analyst at a research foundation, like it when people treat his sexual orientation as an impolite topic of conversation. “I do want it to be something I can represent, without feeling like I’m imposing an awkward subject on someone else,” he says. 

He and other LGBT people get especially annoyed when bringing up sexual orientation is equated to “talking about your sex life.” Cavalieri wants to be as free as his straight co-workers are to chat about their significant others, their dating history, and even how hot that movie star is, when those sorts of conversations are appropriate.

His favorite way to come out is to “sneak it in as a joke,” he says. His review at work of Mad Max: Fury Road was a complaint that for most of the movie, “Tom Hardy’s pretty face is buried under a beard,” and not the sexy kind—a “full-on hobo mop.” Sometimes, it’s serious.

LGBT people can face tricky legal and financial situations that go way beyond what happens in the bedroom. Unmarried gay couples need the right wills and other legal documents.

Otherwise, if one passes away, the survivor risks losing his or her home or prized possessions to estate taxes or to estranged family members. Debra Neiman, a financial planner in Arlington, Mass., recalls working with an older gay couple, closeted at work, who were afraid to name their partners as retirement plan beneficiaries. Neiman needed to create special trusts to inherit the couple’s assets while maintaining their privacy.

A legal marriage eases some of these concerns, but not all. A UBS survey of affluent same-sex couples, conducted after June’s Supreme Court decision legalized gay marriage nationwide, found that 53 percent of respondents feel they still face unresolved financial issues as parts of same-sex couples.

Thirty percent don’t feel accepted by their parents. And a quarter say their inheritance was or — could be— affected by their sexual orientation.

There’s out and there’s out

No matter what the Supreme Court says, you can’t just go around asking people if they’re gay or straight. Some people’s identities are more complicated than fitting a simple category, or they’re still figuring it out.

Others feel that it’s none of your business. Still others are hiding the truth from families or communities that wouldn’t be supportive. In more than half of the 50 states, LGBT people have no protection from job discrimination. 

So a lot of people are being careful. Alanna, a 45-year-old lesbian in Minnesota, invited some co-workers to her wedding, but she isn’t out to everyone at the office.

“Work is where you have less control,” she says. “I have to put up with a certain amount of whatever to be here.” But she’s not shy about being gay when she hires a real estate agent or walks into a store with her wife. “I’ve always been out in that situation because I have control,” she says.

Still, she is used to an awkward pause when someone realizes that she and her spouse are a couple. A furniture saleswoman recently surprised them by not skipping a beat. She saw the rings and asked about their wedding. “I kept her card,” Alanna says. “It makes a huge difference, not wondering if you’re being treated differently.”

Need to know

A number of investment firms want to be ready for potential LGBT clients, so they’re training advisors as to how to tackle the topic.

“It’s important to have a full picture of your client,” says Tim Bresnahan, head of the LGBT and nontraditional-families practice at Northern Trust Wealth Management, which handles $233 billion in client assets. 

Clients often walk into an advisor’s office wanting to talk about one thing — their investment lineup, for example — without realizing they have further serious financial planning issues that need attention.

“It’s so important to get back to basics,” Bresnahan says.

A client might own property with a boyfriend or girlfriend in a way that could trigger a big estate tax bill if one of them were to die. An age difference between two partners might make the younger partner likelier to want to retire early.

LGBT clients don’t need to be in a couple for orientation to be a factor. Single people might want to save up for adoption or fertility treatments, for example, or they might want their estate to go to friends, not estranged family members.

Further special issues affect advice from doctors or tax accountants. These can’t be addressed if professionals don’t know a client is gay.  

How to pop the question

Bresnahan says sexual orientation can be brought up organically. “People respond positively to earnest questions,” he says. For example: “Are you just thinking about yourself, or are there other people who are important to you?” 

An additional good question, says Stuart Armstrong, a planner with Centinel Financial Group in Needham Heights, Mass., is, “Do you have any financial obligations that we need to take into account in our planning?” That could be a partner, a child, or a parent. Some of his gay clients end up taking care of friends they consider family.

Sometimes advisors can build up enough rapport to ask directly. Even if they don’t absolutely need to know, they may start to feel distant from a client when they don’t know anything about his or her romantic or home life.

“Are you dating anyone?” can clear the air, though it could get awkward if a man says yes and the advisor were to follow up with “What’s her name?” Streed, the Baltimore doctor, appreciated when a personal trainer used gender-neutral pronouns in asking about his dating: “What do they do?” It was a subtle sign that she’d be all right upon learning he’s gay.

“We’re in a very binary culture,” Streed says. “When someone tries to avoid that, they’re letting you know they’re thinking about other possibilities.”

See also:

Are voters ready to cast a vote against the Supreme Court?

Wal-Mart accused of bias against gay workers in class action

Prudential gets into the LGBT planning game

LGBT: The emerging market closest to home


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.