How advisers can take advantage of new financial opportunities with LGBT clients

Legal recognition of same-sex couples means fewer complications and new options for investing

Jul 17, 2015 @ 11:11 am

By Peter Waterloo

The LGBT community has taken mighty strides toward acceptance over the last few years and took another giant leap forward with the recent Supreme Court ruling legalizing same-sex marriage nationwide. But with societal change comes a host of personal challenges, particularly when it comes to dealing with the financial benefits of marriage and domestic partnerships under the law.

In California, a gay marriage has carried the same legal weight as a marriage among heterosexual couples for some time now. Still, the shift from the legal limbo of being a committed unmarried couple to one recognized as being married under the law can take some getting used to. Many LGBT couples who seek the advice of a professional financial adviser come away surprised at all the ways a legal marriage changes their financial picture. This is particularly true in tax planning, as well when developing a common investment strategy.


For financial advisers, legal recognition of same-sex couples means fewer complications when devising an investment strategy, since married bisexual, lesbian, gay and transgender couples ultimately have the same financial and investment needs as straight couples. It is clear, however, that many LGBT couples seek out financial advisers who have demonstrated sensitivity to common LGBT concerns.

(More: A lucrative market opens for advisers as marriage legalities level)

For instance, financial advisers should be aware that many gay married couples choose to direct their personal investments toward companies they believe in. So-called values-based investing is a way for couples to align their personal values with their wealth, often in the hope of encouraging social reform.

This is a particularly strong strategy in the LGBT community, since there are still many companies that have been slow to adapt to the avalanche of public opinion in support of legal same-sex unions. By refusing to invest in companies that have been hesitant to uphold their personal standards of tolerance, LGBT couples can send a message.

(More: Social Security update for gay couples)

Financial advisers may want to recommend that their clients consult a qualified estate-planning attorney to see if having a will or trust may be beneficial to their own circumstances as well as pre- and postnuptial agreements, particularly when one spouse is in a dominant income position.

Older LBGT adults are closer to retirement and may be especially concerned about their own retirement preparation. That's why it's important to understand a client's lifestyle needs in order to fashion a retirement and emergency-income strategy that meets their needs

The LGBT community has indeed come a long way in the past few years. A smart investment strategy is the best way to take advantage of these newly acquired financial opportunities.

Peter Waterloo is a member of the LGBT community and a financial adviser at UBS Financial Services Inc.


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