Why Advisors Need to Consider the Unique Financial Challenges of LGBTQ Clients

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More than a million Canadians identify as LGBTQ, and advisors should consider whether they are inadvertently serving these clients.

Cindy Marques, president and certified financial planner (CFP) at MakeCents in Toronto, says a quarter of her clients identify as LGBTQ and all of them contacted her directly after learning she identifies as a queer woman and planning financially for this community. She is able to draw parallels with her own financial experiences to meet their needs.

“I didn’t have to prospect for queer clients. So that tells me that these Canadians are looking for representation,” she says. “They want that feeling of empathy from the professional they’re working with.”

Ms. Marques says many of her LGBTQ clients experienced stigma when interviewing former counselors.

“They often don’t use the right language and may offend unintentionally,” she says.

She uses the example of a counselor meeting a potential married woman, and the counselor assumes she has a husband instead of a wife. Using the word “spouse” is a small but inclusive gesture that puts people at ease.

Laura Whiteland, owner and CFP at Inclusive Financial Planning in Truro, Nova Scotia, says some advisors are uncomfortable hearing about the financial challenges LGBTQ people face, and prospects often tune out. account.

“To counteract bad words, you have to spend more time listening,” she says. “You want to create an environment that encourages people to say what matters to them and then respond with empathy. »

While the financial needs of LGBTQ clients may be similar to those of other clients, there are differences, said Jarvis Sam, CEO and founder of The Rainbow Disruption, a Portland-based diversity, equity and inclusion firm , Oregon. to trusts and estates practitioners at the STEP Canada conference earlier this month.

For example, Mr Sam said “naming the dead” is a huge challenge in the trans community, where the person is referred to by the name given at birth, not the name they chose and matches their current gender identity.

Ms. Whiteland finds that her transgender clients are reluctant to have a will or power of attorney drawn up before changing their legal name or gender identity. “It’s risky to do nothing,” she says, when it comes to estate planning. Through official documentation, the transgender client will be remembered for who they are today, not for who they were before.

As for other differences, Whiteland notes that more and more LGBTQ couples have a significant age gap between them, and planning is necessary to accommodate the younger spouse who will likely have “more life to live.” She adds that some relationships may feature communal households with more than one partner.

Marques adds that many of her married or common-law LGBTQ clients may be seeking in vitro fertilization, foster care or adoption to start or expand their family. These increased costs must be factored into their financial plans.

She has also found that more and more of her clients prefer to reside in larger cities where they feel accepted and surrounded by like-minded people. But living in a city is likely more expensive, and advisors need to understand that city living is non-negotiable.

While good estate planning is essential for all Canadians, it is especially important for LGBTQ clients to ensure their intentions match the documents. Ms. Marques uses the example of a family of a common-law LGBTQ couple who does not respect the relationship. If one partner dies, a family member can replace the surviving partner, according to the province’s inheritance laws, without a will or power of attorney in place. The surviving spouse’s property rights may not be guaranteed unless the couple is legally married, depending on the province, she notes.

“While the law doesn’t necessarily treat queer and heterosexual relationships differently, it is a fact that many queer couples live in common-law relationships and are not married,” she says.

Whiteland points out that Nova Scotia, where she lives, has different rules about marriage and common-law relationships, while British Columbia recently recognized common-law relationships as similar to marriage.

Ms. Marques points out that her LGBTQ clients name beneficiaries on all registered accounts and insurance policies. This means that these assets would bypass the will and pass directly to the named heirs of the person’s choice.

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