Canadian advisors aren't doing enough to tap into a $100 billion market, says one advisor who has built a booming practice in this lucrative niche.
It can be hard for lesbian, gay, bisexual or transgendered (LGBT) clients to find an advisor, says Jenifer Maier, an advisor with Perler Financial Group in who has many clients from Vancouver’s LGBT community. “Advisors are typically older males and their clients may typically be an older heterosexual couple who is post-retirement. There are some advisors out there that may be sensitive about having their 80+ couple sitting next to a gay couple.”
Maier, who’s only advertising is in a Vancouver LGBT publication, says she didn’t initially target the segment, but it became a key portion of her practice after she gained a reputation – and referrals.
“I’m very clear with all of my clients that my practice is an open practice and I will embrace all people: I tell them that ‘we will have client events and you will meet other clients and some of them may be gay, trans, poly or heterosexual,” said Maier. “If you have a problem with that I may not be the planner for you.”
The market also tends toward affluent clients, with 33% of LGBT Canadians having an annual income of more than $100,000, according to a 2012 study by Protean Strategies. “In most cases you will have two individuals who are earning a lot of income because they don’t have kids,” said Kenton Waterman, an Investors Group advisor who has a center of influence in the segment.
“The banks are all trying to target the segment, they are advertising in all the business directories and the big events that come up in Toronto. They know that there’s more income there to do things with when it comes to financial planning,” said Waterman.
In Canada, same-sex marriage has been legal since 2005, when the country was one of just four nations to permit same-sex unions. Since then, some financial institutions and advisory practices have gone all-out to target the country’s lesbian, gay, bi- and transsexual market.
All of the Big Six are promoting their services at events such as Pride parades. TD, in particular, has made a major push with tier-one sponsorship of Pride events across the country and becoming lead sponsor of World Pride 2014.
The banks have a good financial case for targeting the segment. According to Protean Strategies, the total before-tax income of LGBT individuals in Canada amounts to roughly $98 billion, equating to around 7.2% of GDP. That means that the average LGBT consumer has about 22% more spending power than the average Canadian.
Maier says that by having an open practice she has been able to win clients who often find it difficult to relate to the typical advisor.
“My experience is ongoing, but my experience is that same-sex couples have a higher chance of encountering a negative reaction from people in the financial industry. First of all because you’re dealing with money, but also there is still a lot of prejudice in our society,” said Maier.
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