“Love wins” was the victory cry globally that followed the legalisation of gay marriage across the US, on 26 June, 2015.
Satisfying as the US Supreme Court’s decision was to many lesbian, gay, bisexual and/or transgender individuals, though, it was also, to many of them, nothing more than the latest official acknowledgement of something that has become increasingly obvious: which is that LGBT relationships, whether legal or not, have become more widely accepted than ever in the US in recent years.
This has been taking place in spite of resistance from religious groups, governments and, occasionally, as occurred in June at a gay nightclub in the American city of Orlando, Florida, the presence in some societies of mentally unstable individuals who are willing to use violence to make their point.
In that case, a 29-year-old American with possible links to extremist ideologies named Omar Mateen shot and killed some 49 people at a gay nightclub and injured another 53, before being killed himself.
Also in June, the government of Singapore issued a statement which warned foreign companies that they should “not fund, support or influence” the city-state’s annual Pink Dot gay rights rally, in what was seen by some commentators as a sign of growing official conservatism.
Gay sex is against the law in Singapore, but such multinational companies as Google, Barclays, Goldman Sachs, BP, Bloomberg, Apple and Twitter nevertheless were among the 18 sponsors of this year’s Pink Dot event, which took place on 4 June at Singapore’s Speakers’ Corner in Hong Lim Park, not far from the financial district.
As in past years, thousands of pink-wearing supporters showed up for the rally.
The increasing public visibility and societal acceptance of LGBT relationships is driving more than sales of pink garments, though.
As interviews with financial advisers and providers of investment and retirement products around the world reveal, the increasing public visibility and societal acceptance of LGBT relationships is inspiring a growing number of businesses to do more just than sponsoring gay rallies.
From the US to the UK to Asia, new firms are being launched to address the challenges still facing LGBT individuals and couples, as well as the sector’s often unique financial planning needs.
Certainly the potential business opportunity is clear, given estimates that the LGBT population may account for as much as 5% to 10% of the population, and have a global aggregated spending power of more than US$3trn, according to LGBT Capital, a Hong Kong-based financial services specialist.
What’s more, says Michael Covey Davis, a senior financial adviser in the American state of Florida with Merrill Lynch Wealth Management – which for the past decade has offered a specialist LGBT financial planning service – the introduction of same-sex marriage in the US has emboldened many members of that country’s LGBT community.
More fully aware of their legal rights now, he says, they are keen put them to use.
“With this heightened awareness, our clients are embarking on things like re-titling legal documents, navigating adoption and pursuing dissolution of marriages,” says Davis.
But this heightened awareness on the part of LGBT individuals isn’t, for now at least, as well matched with financial products and services as it needs to be, according to Steve Wardlaw.
Wardlaw, chairman of UK-based LGBT insurer Emerald Life, which launched in March, says gay clients often face unusually high health cover premiums from regular insurance companies, compared with their non-gay counterparts.
In addition to the market’s compelling demand for products that address such concerns, Wardlaw says, there are some LGBT specific needs that are not currently catered for, for example a wedding insurance policy that provides discrimination cover as standard, something he says is a first for the UK market.
A major problem for many expat LGBT couples is that the countries they settle in often don’t recognise their marriages.
This, say LGBT wealth planning experts, can have potentially major repercussions, not unlike the better-known situation that occasionally affects heterosexual married expatriates in some Arab countries, where the assets of those who die without leaving a will can end up being divided up according to Shariah law. (This typically favours male relatives, even ahead of the deceased’s wife and daughters.)
Paul Thompson, pictured above, the Hong Kong-based co-founder of wealth management and financial planning firms LGBT Capital, LGBT Wealth and – since earlier this year, Equality Wealth – notes that hardly any Asian countries recognise gay marriages among expats as legal – potentially stripping couples of the usual protections of marriage, such as rights to a partner’s pension and savings.
“I have heard some horrible stories from our advisers,” says Thompson, who describes one case in which “somebody was told they had to move out of their house” after a gay partner died.
“There have [also] been stories of people in hospital, dying, and [their partner was not] able to see them because they were not [considered] the official next of kin.”
Emerald Life’s Wardlaw says a “certain amount of rule-bending goes on” among LGBT expats, for example, “not being honest about your partner on a form, or on a savings product, or insurance”.
But this is risky, he says, and those who do it have to live with the niggling worry, always at the back of their mind, that “something will not go according to plan just when [they] need it”.
Wardlaw says he co-founded Emerald with the firm’s chief executive, Heidi McCormack, to abolish the inequalities that still exist “in the everyday services” LGBT people need, and in their dealings with those who provide them.
“We wanted to take the insurance sector and – for the first time – rebuild it with a strong focus on the LGBT community,” he says.
“Our aim is to abolish [the insurance sector’s] inequalities and make sure the LGBT community gets true equality of experience in areas of life, like insurance, where [it is] taken for granted, or simply forgotten.”
St James’s Place
One of the biggest names in financial advice circles to acknowledge the growing importance of the “pink dollar” (or “pink pound”, as the case may be) thus far this year is the FTSE 100-listed UK wealth manager St James’s Place.
In April, SJP – which since earlier this year has also been the parent of Singapore and Hong Kong’s Henley Group advisory firm, now known as SJP Asia – entered into a partnership with Paul Thompson in a new venture, Equality Wealth. It describes itself as the first international specialist wealth management provider for LGBT clients.
Equality Wealth says it will work alongside St James’s Place advisers to provide LGBT wealth management services to clients located both in the UK and in Asia.
Equality Wealth’s inception follows the launches of LGBT Wealth two years ago, and LGBT Capital in 2010.
“We felt it would be good to pilot it in Hong Kong, and roll it out more broadly”, which is what is happening now, in the UK market, Thompson adds.
“The great thing about the UK is it’s a big market, it’s now quite open, and there are a lot of things product providers can and will do to support what we’re trying to do.”
LGBT Equality Index
One of the more innovative efforts to give the LGBT market some traction was Credit Suisse’s so-called Equality Index, which was first launched in October, 2013, and tracks the equity performance of (still just US) companies that have LGBT-friendly policies.
Despite its 2013 launch, it has an inception date of December 2002, since which time it has “under-performed the S&P 500 slightly, although in recent years, it has outpaced [that index], and beating it by around 2% over the past year,” according to a Credit Suisse spokesman.
For now, though, there’s no tracker fund known to be following it…suggesting that there are still opportunities to be had for those entrepreneurs keen to make a bid for the pink pound/dollar/euro.
Another relatively early mover in the LGBT sector was Northern Trust, the NASDAQ-listed, Chicago-based financial services company, which launched a special operation to look after “LGBT individuals and non-traditional families” as long ago as 2011.
Morgan Stanley has also been active in the space, having launched an initiative in 2012 that provides financial advisers with wealth planning tools, marketing and business development resources specifically aimed at LGBT clients.
The move towards more LGBT-friendly financial products has been helped in recent years by individuals from the LGBT community who have reached top positions at their companies, and who are, therefore, in a position to do so without having to worry – as much, at least – about whether a pro-LGBT stance could affect their career.
But some have faced headwinds, and, as the warning by Singapore’s government last month to foreign companies to stop sponsoring the Pink Dot gay rights rally suggests, there can be external pressures that force businesses to take some side steps, if not full retreats, from time to time.
Goldman Sachs chief executive Lloyd Blankfein, for example, has been an outspoken backer of gay rights in the past, even though, as he has been quoted as saying, it has cost the company some clients.
And a Financial Times journalist last month found evidence that Singapore’s warning to foreign companies about promoting the Pink Dot event could end up discouraging some if not all those foreign multinationals that have been regular supporters.
FT columinist Michael Skapinker said he had contacted “the 10 most prominent sponsors to ask whether they planned to support the Pink Dot event next year”, in spite of the Singapore government’s warning (which came a few days after this year’s event).
“Barclays, JP Morgan, Goldman Sachs, BP, Bloomberg and Twitter said they had nothing to say,” Skapinker wrote.
“Facebook and Apple did not reply.” Google and GE cited their support for the cause, but “neither said whether it would support the event next year”, Skapinker said.
“For all their talk of inclusiveness, diversity and social responsibility, most companies are followers rather than leaders,” Skapinker went on. “
They are happy to throw their names and money at popular causes, but less willing to commit themselves to the most controversial.”
And while there are arguments on both sides as to whether companies have any business deciding on “societies’ policies and priorities”, Skapinker concluded, “what they [companies] shouldn’t do is offer backing to causes they have not full researched or understood, and then abandon them. The supporters of those causes, including Singapore’s Pink Dot, deserve better than that.”