If you’re part of the LGBTQ+ community, finding a financial advisor who is LGBTQ+-friendly can be both important and challenging.
As a whole, financial advisors aren’t a diverse group of people. The average age of a financial advisor is 55, and 20% of financial advisors are 65 or older, according to a 2019 study by J.D. Power.1 Of the 80,000 Certified Financial Planner (CFP®) professionals, fewer than 3.5% are Black or Latinx.2 And the Certified Financial Planner Board of Standards (CFP Board) only announced in 2021 the option to choose a nonbinary gender for current planners and future applicants.
How can you get the best financial advice from an industry that doesn’t seem to have a very diverse pool of people to choose from? As a Certified Financial Planner™, I get it. Money is personal. What works for one person may not work for you. But here’s the thing: Financial planning should be available to every person.
You deserve the absolute best financial advice, and finding a financial advisor who caters to your unique financial needs as an LGBTQ+ person can make all the difference.
Why Sexual Orientation and Gender Identity Matter in Financial Planning
The pool of financial planners skews toward older, more conservative individuals, which can make it tough to know whether your advisor can give advice geared to the planning and investment needs of LGBTQ+ people. The financial services industry has fallen short on how it serves these communities and their families. As a nation, we’ve made great strides toward equality in legal and civil rights. But a 2018 Experian survey found that 62% of LGBTQ+ respondents said their gender identity or sexual orientation caused them to experience financial challenges.
If you’re part of the LGBTQ+ community, you might face a number of unique difficulties in planning your financial future. Some decisions can have a substantial impact on your bottom line—both positive and negative.
For example, protecting your domestic partner if you choose not to get married; navigating workplace discrimination and how it affects reaching your financial goals, including retirement; and other issues are potential financial difficulties that LGBTQ+ people have to consider. Having an LGTBQ+-friendly financial planner can uncover those hurdles and help to create a sustainable, successful financial future.
Important Considerations When Choosing a Financial Advisor
In addition to finding an advisor who is equipped to meet your unique financial needs, there are other considerations to take into account when looking for a financial advisor.
One thing to ask: Is the advisor a fiduciary? CFP® professionals must act as fiduciaries, but other advisors may not operate under those strictures.5 Everything that a fiduciary does must be in the best interest of their clients. And that’s the ideal: a financial advisor who gives you the right advice for your dreams and goals.
Check Credentials and Certifications
Many levels of qualifications exist for financial professionals. A “financial coach” doesn’t require any formal training or certifications. Some organizations issue easy-to-get credentials that sound more impressive than they are. But not all credentials are created equally.
A CFP® is a Certified Financial Planner™ and requires successful completion of a rigorous examination to earn the designation. The CFP® certification means trust and competence. A Chartered Financial Analyst (CFA) also must complete in-depth studies and pass an exam. Both designations have ethics and experience requirements. Look for these credentials when choosing a reputable advisor.