For better or for worse, investment managers are taking a closer look at the LGBT community after the Supreme Court ruled in favor of marriage equality earlier this year. An October 27 article in Institutional Investor magazine, advised investors “to court the gay community”:
LGBT households in the U.S. appear to be more affluent than average, though hard data is lacking, given presumed underreporting resulting from concerns about possible discrimination. A 2013 study by investment giant Prudential Financial citing the 2011 U.S. Census found that the median LGBT household income was $61,500, versus $50,000 overall. In a 2012 Prudential-led poll of 1,041 LGBT people aged 25 to 68, the 19 percent of respondents in a gay male couple reported median income of $103,100. …
With changing social attitudes, more gay households will feel comfortable self-reporting, say wealth advisors. Also, compared with their baby boomer counterparts, gay Generation X and Millennial couples are more likely to have or plan to have children, according to the Prudential report. Therefore younger couples will probably have a greater need than boomers to advice on trusts and inheritance planning.
Greater attention from financial institutions can be a good thing for LBGT families. As the article suggests, RIAs (investment advisors registered with the U.S. Securities and Exchange Commission or state securities authorities) “can provide targeted advice to LBBT couples on issues especially relevant to them, such as surrogacy and second-parent adoption, whereby people legally adopt their partner’s children. Inheritance battles have emerged in court in the 35 states that don’t recognize second-parent adoption.”
“‘A lot of couples think they don’t need to do planning anymore—and that’s dangerous,’ warns Michael Pellman Rowland, portfolio management director with the Vector Group at Morgan Stanley in New York. If anything,” the article point out, “as the first tax year since the SCOTUS ruling comes to a close, it’s time for RIAs to reach out to clients for a checkup.”
