City Editor Neil Martin reports on the creation of a valuable financial advice service for the LGBTI community in the UK, and a potential growth area for IFAs

An important milestone has been reached recently with the launch of the UK’s first ever international specialist wealth management service for those in the UK community who are lesbian, gay, bi-sexual, transgender and/or intersex (LGBTI).

The Equality Wealth service is the brainchild of the team at Equality Wealth Management (EWM) who have teamed up with St James’s Place Wealth Management (SJPM) to put it in place.

The service has been developed in response to an increasing need for specialist financial advice within the LGBTI community.

And the need for such a service was aptly highlighted when research commissioned by Equality Wealth Management showed that elders within the LGBTI community are having to pay an average 20% retirement ‘premium’ that straight people do not have to pay.

Paul Thompson, who is Chairman of Equality Wealth and founder of LGBT Capital, said: “LGBTI people often want or need to retire to more expensive cities so they are not cut off from friends, the community and vital services. Most people haven’t thought about this ‘LGBTI retirement premium.’ Many LGBTIs do not plan adequately for retirement. So this extra cost is a ticking time-bomb for thousands of us.”

Thompson added: “This is a conservative estimate. It would be even higher if London was included in the average.”

The main problem is made worse because LGBTIs aren’t preparing for retirement and that traditional financial advisers don’t understand their requirements.

The Equality Wealth service was launched and piloted in Hong Kong, which was where EWM first approached SJP. It looked at a number of UK and international IFA firms before it chose SJPM to cover the UK and Ireland, dealing with the firm’s joint chief operating officer, Iain Rayner. He then handed over the focus to Shaun Godfrey, Head of Acquisition, Marketing & Operations, and his colleagues in the recruitment team.

An accreditation programme

Structured as an Accreditation Programme for LGBT specialist financial advisers, Equality Wealth connects to advice and services by introducing specially trained SJPM advisers with expertise in a number of key areas, including retirement planning and saving, insurance and wealth protection. It aims to combine the financial planning resource of SJPM with the specialist knowledge of the issues facing the LGBTI community. Equality Wealth also acts a conduit to specialist knowledge and financial advice for the LGBTI community on starting a family.

Thompson again: “We think a specialist LGBT wealth management service in partnership with SJPM is a very important development and shows the significance of the LGBTI market. Many people in the LGBTI community do not have access to advisers who truly understand their needs and the LGBT life cycle can be very different. Important issues such as saving for retirement can be overlooked and with a generally higher disposable income, there is real opportunity – with the right advice – for us to help the LGBT community to achieve their financial goals.

“Clearly the LGBTI consumer represents a significant opportunity for both spending and investment but it is essential that where financial advice is given, that there is genuine understanding of the individual’s specific issues. In regions where LGBTI individuals are generally more private about their lifestyle, it is even more important to have a trusted adviser with whom they feel comfortable discussing their situation and objectives. We believe that Equality Wealth provides this.”

Iain Rayner, Joint Chief Operating Officer of St James’s Place, said: “We are delighted that Equality Wealth has chosen to work with us on this exciting initiative. Our corporate values embrace diversity and inclusion and we are keen to actively project these values by supporting all members of society in reaching their financial goals and having advice tailored to their needs.”

A significant and growing market

Figures show that the LGBT market is a significant and growing market. The LGBT population in the UK alone is over 4 million and represents some US$150 billion in spending power each year. Globally, the LGBT population is estimated at over $400 million with a spending power of some US$3 trillion and an estimated total wealth of US$15 trillion.

Anders Jacobsen, Head of Investment & Research at LGBT Capital, supports product development and provider screening efforts at Equality Wealth, maximising the LGBT-relevance and values sought in both industry partners and their product offering. He commented: “We observe that the LGBT community is becoming increasingly aware of the power to create positive change in its spending and investment decisions. Companies and service providers are responding accordingly, seeking to profile well to this community and to the growing community of LGBT allies, who are also seeking evidence of corporates’ social and inclusion values when making their consumer choices.”

Godfrey added: “Having recently attended the seminar in London talking about retirement, I was very interested to learn that, as well as the seminar having  so many people in attendance, it was also being filmed and screened live, as part of a new festival called Digital Pride Week.

“The initial number of people who watched the seminar was 4000 and a further 4000 have since viewed it on play back. In terms of market opportunity, well, the numbers speak for themselves and we are really pleased to be a part of this.”

When asked if the new service is a big commitment from SJPM in terms of training, Godfrey replied: “Not really. We are supported by a well-resourced team of training and development professionals who support our Partners in all manner of learning, such as support for gaining Chartered status. The development of this training for advisers wanting to advise in the LGBT market is something we can do reasonably quickly, in the same way that we support Partners wanting to specialise in VCT, EIS, long term care, auto enrolment etc.”

The last word goes to Godfrey: “Having witnessed first-hand the problems faced by members of the LGBT community in gaining access to quality and well informed financial advice, I see more advisers becoming interested in giving advice and supporting these individuals towards achieving their goals.”