Prioritize Living Fully
Overview of Research: In January 2024, Merrill Wealth Management published three studies examining the financial challenges, concerns and successes of the affluent Black/African American, LGBTQ+ and Hispanic-Latino communities in the United States. “Diverse Viewpoints: Trends Reports” builds on past research and uncovers how these groups navigated a tumultuous economic environment created by the fallout of the COVID-19 pandemic and rising inflation.
Bank of America partnered with Ipsos who gathered these insights using qualitative and quantitative techniques, including a 2023 survey of 1,000 members each from the affluent Black/African American, Hispanic-Latino and LGBTQ+ communities.
Reporter: What did you find most interesting about this research from the affluent LGBTQ+ community?
Toni Peterson: It’s exciting to see the widespread optimism about their financial future among the affluent LGBTQ+ community. The past 12 months have had their challenges, from rising inflation to market volatility and continued fallout from the pandemic. However, the LGBTQ+ community reported higher rates of optimism than the affluent general public. In fact, they’re nearly twice as likely to feel confident about the economic outlook than the affluent general population, as well as generally more optimistic about their financial future. It was encouraging to see that despite the setbacks many Americans faced over the last few years, this community maintained a positive outlook on their finances.
Reporter: What findings from the affluent LGBTQ+ community remained consistent from the last iteration of this research in 2019? Has anything changed and if so, can you share why you think that may be?
Peterson: A commitment to the community once again emerged as an important priority for this group. In both this research and our 2019 iteration, affluent LGBTQ+ Americans placed great importance on supporting their community.
In terms of what has changed, unfortunately, this community did report higher rates of financial stress and barriers compared to the last iteration of research. Since 2019, the percentage of affluent LGBTQ+ community members reporting that they’ve experienced financial barriers has grown and has done so at a faster rate than the affluent general population.
In 2019, almost half of the affluent LGBTQ+ population reported experiencing financial barriers. That jumped to 86% in 2023. In 2019, 79% of the community reported experiencing financial stress. In 2023, 94% of affluent LGBTQ+ Americans reported financial stress. It’s unfortunate to see these numbers rise, but also helpful for advisors to be aware of these barriers and stressors so they can help their clients in the community work to overcome them.
Reporter: What are some of the priorities of this community and how, if at all, have they shifted in the last few years?
Peterson: Affluent LGBTQ+ community members identified the most important aspects to life as family, themselves and children. In 2023, we found that having children has become significantly more important to the community than it was in 2019. And this was especially true for affluent LGBTQ+ women. Our research found that over a third of LGBTQ+ women respondents reported that children are an important aspect of life, a huge jump from just 17% in 2019. Almost half of affluent LGBTQ+ women ranked children as an important life aspect, compared to 28% of affluent LGBTQ+ men.
For affluent LGBTQ+ Americans, starting a family has also increased in importance. The percentage of this community who cited having an interest in starting a family more than tripled to 14%, compared to only 4% in 2019.
Reporter: What are some of the top financial motivators for this community?
Peterson: Our recent research as well as our 2019 study uncovered a strong desire from this group to live their best lives on their own terms. When asked about top financial motivators specifically, more than one-third said living the life how they want, over one-quarter said achieving financial independence and nearly one-quarter said a thirst for new experiences. For this community, financial independence equals freedom and is a helpful ticket to live life how they want.
Reporter: What financial barriers are affluent LGBTQ+ Americans facing? How are they working to overcome these barriers?
Peterson: Members of the affluent LGBTQ+ community are experiencing higher rates of financial barriers and stress than they did in 2019 and compared to the general affluent population. Top barriers and stressors include lack of resources or knowledge, paying medical bills or for healthcare and saving enough money for retirement.
Despite financial barriers and stressors, affluent LGBTQ+ respondents are actively taking steps to combat the barriers and stress, while working towards achieving their financial goals. A high percentage of the community have a financial advisor and a financial plan.
Reporter: Our research has found that affluent LGBTQ+ Americans look to manage and build their wealth differently. As a member of this community, have you experienced this in your own life or seen this play out with friends in the community?
Peterson: While members of this community do manage and build their wealth in many traditional ways, such as investing in stocks, bonds and mutual funds, we found that affluent LGBTQ+ Americans also look to non-traditional, or alternative, investments. Some of the top alternative ways that respondents reported investing their money is through vacation homes, rental properties and businesses that they run themselves.
Reporter: What could non-LBGTQ+ readers take away from this study?
Peterson: This study helps the general public better understand the needs and priorities of the affluent LGBTQ+ community, in addition to the affluent Black/African American and Hispanic-Latino communities who were also surveyed. Each of these groups face different, unique challenges, and it is important to understand what they are, in addition to where their priorities lie. Despite challenges and hurdles, each of the communities we surveyed feel optimistic about their financial futures and the economic outlook.
This study is a valuable tool to advisors and the financial industry. It acts as a resource providing insight into the goals, priorities and barriers that their clients in these communities may face. The better our industry understands these communities, the better they can serve their clients. The affluent LGBTQ+ community in particular emphasized that they put great trust in their advisors. They spend more time seeking out an advisor they think will be a good fit and understand them and their priorities. It is imperative for our advisors to know how much their guidance is valued and to build and maintain trust with their clients.
Photo by Alexander Grey on Unsplash
Toni serves as the National Chair Emeritus for the Merrill Women’s Exchange, a 7,000-member organization that provides a forum for networking, mentoring and collaboration. She also sits on the LGBTQ+ Executive Leadership Council at Bank of America. Toni is a 2020 recipient of Bank of America’s Global Diversity & Inclusion award.
- Affluent LGBTQ+ Community – with Toni Peterson - March 31, 2024