The majority of individuals self-identifying as LGBTQIA+ believe that financial professionals don’t understand the unique challenges that this subset of the population faces financially, according to a recent survey done by Nationwide. Awareness and education are the best tools that financial advisors can use themselves to help overcome these hurdles with their LGBTQIA+ clientele and instill confidence.
Nationwide conducted a poll recently of 1,000 individuals who identify within the LGBTQIA+ umbrella and 63% said that financial advisors simply don’t understand the unique financial challenges they face that other segments of the population do not. Nationwide sat down with its own George Schein, JD, ChFC, technical director for the advanced consulting group at the Nationwide Retirement Institute, to talk about these challenges and more.
Schein discusses the higher rates of student debt within the LGBTQIA+ community (37%) in comparison with the broader U.S. population (21%) and how much of it comes back to financial support being withheld or withdrawn when an individual comes out to their family. For Schein, it meant over $100,000 in law school debt to escape a disapproving family, and many within the community share similar experiences.
On top of student loans, LGBTQIA+ individuals are most concerned financially about inflation and housing costs, which to Schein makes entire sense as most members of the community tend to gravitate towards metropolitan areas that are more inclusive, and often inherently more expensive.
“The decision to live in these higher-cost areas makes perfectly rational sense. Larger metropolitan areas are much more likely to have city-wide ordinances and rules in place that prohibit discrimination in housing, essential services, and employment based on real or perceived LGBTQ+ status,” Schein explained.
Expenses expand into having a family, with many LGBTQIA+ couples facing the added costs of adoption, in-vitro, or surrogacy at significantly higher percentages than non-LGBTQIA+ couples face, and beyond into retirement age, particularly for those that are childless or single.
LGBTQIA+ retirement-age clients are four times less likely to have an adult child that can help take care of them, and 2-3 times more likely to live alone, leaving much larger gaps for care in retirement. Concerns about discrimination carry over into finding a caregiving facility such as assisted living, and saving for quality and affirming care when elderly is a high financial priority for most within the LGBTQIA+ community.
At the end of the day, it comes down to financial advisors educating themselves about these issues so that they can best serve their clientele.
“I think it’s valuable for a financial professional to do enough due diligence on the financial considerations of LGBTQ+ clients so that the clients don’t have to call out these considerations themselves,” Schein said. “I want financial professionals to be well-informed, culturally aware, and sophisticated enough on their own, so I don’t have to point out some of these differences.”
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