Lesbian, gay, bisexual and transgender activists are split over the need for specialist financial planning services after the boss of a firm targeting clients from the community said she was “staggered” by homophobic comments she overheard at a recent event for financial planners.
LGBT Money founder Arlene Addison says she was appalled when she heard offensive remarks that were made by other advisers behind her back at an industry conference where she was looking to recruit financial planners to work with her organisation.
She says: “It was really disappointing. I would open up a conversation with someone about what we need and what we require in an adviser and then I would hear all the jokes just after the conversation. Most of the responses were probably fine, but it is just unbelievably shocking that there are still people who discriminate and it reminds me why I need the company.”
LGBT Money is an introducer which pairs clients with chartered financial planners who Addison has vetted and believes will be approachable and non judgemental.
While Addison herself is a senior partner at St James’s Place, around half of the advisers that LGBT Money refers clients to are fully independent. She hopes to grow the total number of referral partners to 60 over the coming years.
Yet many will question whether there is a need for this type of tailored approach in 2018, five years after MPs voted in favour of same-sex marriage rights and six years on from the introduction of gender-neutral pricing in the insurance market. In fact, some spokespeople within the LGBT community are vehemently opposed to the launch of an adviser that is branded in this way, believing it is a retrograde step.
Addison says she founded the firm as LGBT Finance in 2005 when she was working with same-sex couples who needed financial planning help as they looked to take advantage of the new Civil Partnerships Act. However, owing to the credit crisis and then health problems the venture did not fully get off the ground. Last year, she decided it was time to relaunch under the LGBT Money brand with a new website.
Addison’s argument is that by signposting itself as an LGBT-friendly organisation, the firm will remove some of the barriers that might deter people from seeking financial advice. She says some clients, particularly if they are older, still feel uncomfortable talking about a same-sex partner and that by offering a service that “does what it says on the tin” they can avoid a difficult conversation.
She says: “It takes away that initial awkward five minutes, because the clients who come to us via the website know that we are already expecting them to be living their lives within the LGBT community.”
One of the IFAs that LGBT Money refers clients to is Melville Independent director of operations Raymond Milne. He says clients who come down this route have often had uncomfortable experien-ces elsewhere.
“When I see a client who happens to be LGBT and I ask why they have come to see us and whether they have tried going elsewhere, they sometimes say thatthey have found other advisers are not open. They say that sometimes other advisers are afraid of asking them questions, because they may be embarrassed themselves.”
Yet Technology & Technical managing director Kim North, says: “It is beyond me why there would need to be a referral service for the gay community. Our financial planning needs are exactly the same as those of heterosexuals. I have been with my partner for 26 years, we became civil partners when we could and now plan to marry.
“I question whether there is any empirical evidence that gay people struggle to find the most suitable financial advice. All of my gay friends are very happy with their straight (or not) financial advisers. I don’t believe that gay people need to be offered a different financial planning service.
“Why, when gay rights have been improved to equality in the UK, are we now being compartmentalised in financial services like in the homophobic years of the past?”
North adds: “Years ago, gay men were discriminated against by the insurance industry when underwritten for protection policies, but I do not believe that bias exists now.
“There are so few gay financial planners that are ‘out’ as it is everyone’s right to disclose their sexuality, or not. I simply believe that financial planners need to be aware of the Equality Act and financial planning is based upon the information provided in the fact-find by the client, gay or not.”
End of discrimination
Compass Mortgage and Insurance services practice manager Chris Morgan was a leading activist who fought discrimination by insurers against gay men in the years running up to 2005. He played a pivotal role in the reform of the industry. But like North, Morgan also believes that the need for LGBT-tailored financial advice no longer exists.
He says: “Back in 2001, there was automatic loading of premiums, automatic HIV testing and very intrusive, personal questions about sexuality and living arrangements. I had been a financial adviser working at the edge of Soho for a bank in a position where I was having to ask those questions and I knew it was wrong. So I decided to start my own practice, Compass, for people who were being discriminated against.”
Later, Morgan worked with insurers to bring about life cover for people living with HIV and his advice firm caters to clients with pre-existing medical conditions.
He says: “The main area of discrimination that gay men were subjected to has been removed. The main driver for buying a product now within the gay community is price and service standards, the same things as any consumer cares about. It is only if an LGBT person happens to be living with HIV that they should most definitely take specialist financial advice.”