According to a recent Wells Fargo survey, lesbian, gay, bisexual and transgender investors still struggle to understand changing laws and are concerned about the financial and legal implications involved one year after a Supreme Court decision and subsequent court decisions on same-sex marriage. Among those surveyed, 83 percent — including 67 percent of those currently in legal same-sex marriages — do not fully understand how federal and state laws apply. Despite the confusion, only 47 percent who are in same-sex marriages or partnerships have sought guidance to help them figure out how recent court rulings and laws impact them.
The survey showed that LGBT couples have a strong focus on the financial benefits and risks of marriage, but many LGBT couples are not having conversations about money. Just 37 percent of those surveyed who are in same-sex partnerships say new marriage laws have prompted new conversations about money. One in five report they rarely or never talk about money, while 25 percent say they talk about money frequently.
More importantly, less than 34 percent of recently married LGBT respondents have reviewed key components of their overall financial health for any changes or adjustments after getting married, including emergency savings, a written retirement savings or investment strategy, a plan or strategy to reduce debt or a careful budget to manage spending.
“So much has changed in the year since the [Defense of Marriage Act] rulings, and today, same-sex couples can legally marry in 19 states and the District of Columbia,” said Katherine Dean, senior vice president, managing director, wealth planning, Wells Fargo Private Bank. “These changes, however, don’t appear to be spurring on conversations about financial issues like saving, investing and preparing for retirement. When the laws change in a relatively short amount of time, however, there are typically more questions than answers. As an industry, it’s incumbent upon us to provide the kind of information LGBT couples need to make sound decisions, so they can achieve their financial goals.” With recent changes in laws affecting same-sex relationships, 53 percent of surveyed LGBT investors would value professional guidance on wills and estate plans, 35 percent would value help with powers of attorney and 24 percent would value guidance on investing. The survey found that needs vary among LGBT investors, depending on their marital status.
Most of those surveyed have a preference for working with professionals who understand the unique needs of the LGBT community. Sixty-two percent of LGBT investors feel the financial considerations and needs of same-sex couples are different from heterosexual couples, but only 49 percent say they would feel comfortable walking into their local bank and talking about financial issues that affect them as an LGBT person.
“Every legislative action that affects domestic partnerships has the potential to impact the financial situations and investment goals of LGBT investors,” Dean added. “As financial issues become increasingly complex, LGBT investors see the merits of working with financial professionals specifically trained to understand the unique needs of LGBT couples.”
The study further found that:
• Seventy-four percent prefer working with financial professionals who have other LGBT customers.
• Sixty-seven percent prefer working with financial professionals specifically trained on issues facing LGBT couples.
• Fifty-two percent prefer working with financial professionals who are LGBT themselves.