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June 20, 2018 at 03:38 PM
With June being Pride Month, T. Rowe Price released a report called The Equality Economy that looks inside the changing lives of LGBTQ investors and examines how advisors can best help them.
ThinkAdvisor spoke with the author of the report, Paul Zettl, who is head of product and offer management and chair of PRIDE at T. Rowe Price.
“The LGBTQ community is really the ideal client base for advisors,” Zettl explained. “This community is large. It’s growing. It has money. And because of their self-reliance, they’re already making more money, they’re investing that money. And they’re completely open to advice, yet they feel underserved.”
According to Zettl, the LGBTQ community is “really worth paying attention to” for advisors.
The LGBTQ community in the U.S. has grown each year since 2012, currently representing 4.1% of the population with estimated buying power of $917 billion, according to the report.
This community is expected to grow even more as changing attitudes and laws allow individuals to live more authentic lives. As an example, the report states that 20% of millennials currently identify themselves as LGBTQ compared with 7% of boomers.
“Advisors, we believe, need to pay attention to this segment and need to pay attention to the next generation,” Zettl said. “The LGBTQ community and the next generations are inextricably linked.”
To better understand the financial behaviors of these investors, T. Rowe Price conducted primary research through Community Marketing & Insights (CMI). The research consisted of an online survey of 1,300 LGBTQ adults. Specifically, they surveyed individuals over 21 with investable assets over $25,000. The survey also took a focused look at affluent individuals (AIs) with more than $500,000 in investable assets.
The report addresses three specific themes about LGBTQ investors that came through in the study.
1. The LGBTQ community is full of self-reliant investors.
