Investing your pink dollar

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Have you planned for your future? Sounds like one of those typical financial planning commercials portraying a straight couple easing their way through life because they made all the right choices with their money, doesn't it? But what if the couple were two men or two women? Would the financial planning have to change? These are the questions that Hong Kong based Paul Thompson, the chairman of gay social media and services company, Fridae, pondered before starting his new venture, LGBT Wealth – a financial advisory firm catering to the specific needs of the LGBT community. Time Out sits down with the man himself to find out how homosexuals can better manage their cash.

What are the benefits of having LGBT-orientated financial advice?
There are two benefits. If you're an LGBT member and you don't feel comfortable talking about your lifestyle to your financial advisor, they can't give you correct advice if they don't know what your life cycle is going to be. In a traditional situation, people plan on getting married, having children, then retiring. But the LGBT style is different. Gays, for the most part, can't get married so they would probably need some kind of partner protection plan. If you're not able to discuss that with your financial advisor, then how can people give the correct advice? Just going somewhere, where in some way you'll feel comfortable and open, and you can see someone who understands your lifestyle, is the first reason. The second reason is getting technical knowledge to understand the specifics of the LGBT market.

So what are those market specifics?
The general lack of legal protection, differing lifestyles, timing for retirement and other things like life insurance and health insurance. Does the policy provide the right benefit? In the past, for example, HIV was a very big issue for gay men getting insurance. And how about partner protection in other forms of insurance? How does that work? Or if a gay or lesbian person has got a pension plan or life insurance, who's the beneficiary and is it structured in the right way?

Do you think enough LGBT members think about their long-term future?
The whole world, straight or gay, generally doesn't plan but the LGBT market doesn't have as clear of a focus. So, if you're in a mainstream situation, most people know their general life plan. A significant percentage of the population will get married, have children, support them all the way through college and retire at 65. Because the LGBT market doesn't usually have that, they don't have the triggers to force them to think about the next step. On top of that, the LGBT world is quite consumer-driven. They generally have more disposable income and they just spend it. But on the flip side they have much more ability to do better in retirement than the mainstream market. They can start earlier and retire earlier. Maybe retire in their 50s. Understanding those options can be crucial. But the reality is that most gay people don't think about it so they end up in a worse situation, not a better one.

Do you know a lot of people who are in these bad situations?
You know, it's interesting. I think, in many ways, gay retirement is actually more expensive than straight retirement. There's probably a 'certain' lifestyle gays and lesbians want to maintain. In the UK, I would imagine that the LGBT market would want to retire in London or another cosmopolitan city. That's more expensive. And when LGBT members can't afford that and settle with folks who don't share the same lifestyle, it's like going back into the closet.

So you're saying if you're an old and poor LGBT person, it would be like going back into the closet?
Exactly. You know, I foresee LGBT retirement communities being set up because now we have a generation of open older gays and lesbians that we didn't have before. And if I'm forced to go somewhere, where am I going to go? I envision apartment-type plots where people are living in a community that shares the same ideals, that doesn't want bingo on a Friday night. They want a male stripper [chuckles]. We tend to want to carry on a lifestyle we've been accustomed to – and that's not going to be cheap. For non-gays, they can say 'well, you know, I've got a family to go back to in the English countryside' or 'I'm gonna go live in Connecticut, USA' and so on. The LGBT market probably doesn't want to do that because their lifestyle is based in places like London, New York, Miami, San Francisco and LA. And those are the most expensive places to live.

LGBT Wealth lgbt-wealth.com.

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