Five Ways to Attract and Coach LGBTQ+ Investors

As an investor niche, the LGBTQ+ community is ripe for opportunity.

Research from the Employee Benefit Research Institute (EBRI) shows that LGBTQ+ Americans tend to be less confident and knowledgeable about financial topics, ranging from day-to-day money issues to saving for retirement.¹ Another study² found that LGBTQ+ Americans continue to face long-term financial challenges:

• Only 36% of the LGBTQ+ community think they’re on track to retire,
• Just 36% have a retirement account, and
• 72% say their daily financial stress level is “high.”

This group—also diverse in gender, ethnicity, race, and age—feels that their financial needs are unique and seeks welcoming practices to help them balance money-related priorities.

The LGBTQ+ community has an estimated purchasing power of $1.4 trillion. But despite this, LGBTQ+ investors report more financial worries, lower preparedness, and higher levels of financial stress, increasing their need for professional advice.²

In addition, the retirement savings crisis has engulfed the LGBTQ+ community. Not only are LGBTQ+ investors less confident about having enough money to live comfortably in retirement than non-LGBTQ+ Americans (76% vs. 89%), but they’re also more likely to say retirement is a lower priority relative to their current needs, EBRI research shows.¹

• Someone to help manage their wealth. According to T. Rowe Price research,³ nearly four out of 10 (38%) LGTBQ+ investors say they want a financial professional to help them manage their investments.
• Guidance on risk and reward. The research also found that LGBTQ+ investors appear to skew conservative, with 43% placing a high value on “security.”³
• Help with prioritizing their financial goals. Like most Americans, LGTBQ+ investors know they must save and invest for retirement, but they also prioritize reducing debt, buying a home, starting a business, and growing their families through adoption.¹

1. Be an LGBTQ+ advocate. According to EBRI research,¹ LGBTQ+ individuals are more likely to work with financial professionals who have had similar life experiences. Of LGBTQ+ Americans, 63% say working with an advisor who is an ally to their community is important, compared with just 21% of non-LGBTQ+ Americans. Increasing the diversity of your practice with LGBTQ+ employees and marketing your practice as inclusive can help you make inroads with this group.

2. Target LGBTQ+ investors in marketing outreach. Connect with LGBTQ+ groups in your area via your website, social media, or in-person events focusing on diversity. Let these prospects know you understand their financial challenges and can help them achieve their goals, such as setting up an estate plan, creating a financial road map, or assisting family members.

3. Serve as a coach. T. Rowe Price research³ shows that most LGBTQ+ investors are comfortable with their current savings and investing strategy but are “overwhelmed” with investment-related decision-making. Let LGBTQ+ investors know you understand their challenges and goals and want to build a lasting financial relationship. In addition, the research found that 94% of LGBTQ+ investors are seeking online tools and education to increase their personal finance knowledge. Your practice can help by identifying and recommending appropriate tools and resources.

4. Listen—and respond—to their concerns. Of LGBTQ+ investors, 55% have faced discrimination from someone in the financial services industry, with 49% of that group attributing the discrimination to financial insecurity.² Let them know you can help rank their financial goals and objectives by urgency and importance to create an appropriate financial plan.

5. Help them get back on track. Of LGBTQ+ investors, 33% say they don’t have access to employer-sponsored retirement plans, and only 36% feel that they are on track to retire by their target date.² Offer a customized financial plan that shows them how to stay the course and achieve their goals. A primer on long-term asset allocation, based on time horizon and risk tolerance, could help LGBTQ+ investors reach their financial goals more efficiently.

The LGTBQ+ community is in need of financial services and has assets to invest. Include them in your practice’s prospecting efforts to diversify your client base, increase assets under management, and help make investing more accessible.