The annual spending power of the LGBT+ community is estimated to be $4trn (£3trn) and total household wealth at an even greater $23trn, according to recent statistics published by LGBT Capital.
It is a powerful reminder to those in the investment and wealth management industry, that the LGBT+ community is a valuable client base, which advisers simply cannot ignore.
Recent surveys completed by LGBT Great shine a spotlight on the overwhelming number of LGBT+ people who are seeking more from the investment industry.
More than 84 per cent of the community say that a financial adviser’s LGBT+ credentials matter to them and more than 90 per cent said that an LGBT+ friendly approach to investing is crucial when deciding where to entrust their money.
A separate study by investment firm T. Rowe Price, also found that the LGBT+ community currently has a ‘low affinity’ for the financial services industry.
Sadly, based on my own experience - I am not surprised. Having recently set up a personal pension, not a single adviser I spoke to could relate to my personal financial requirements or suggest an LGBT+ friendly fund I could invest in.
This problem is set to intensify. The number of people identifying as LGBT+ is increasing and attitudes towards sexual orientation and gender identity are changing among young people.
Allies are also seeking to invest in LGBT+ friendly causes, an even bigger reason for the financial services sector to change now or risk becoming outdated.
Social sustainability matters. Following the global pandemic, the economic recession and rise of social justice movements have illustrated how apparent inequality is in society.
The financial services industry has great influence and an opportunity to play an important role in improving this.
By design, professional investors in the ESG space have a huge opportunity to transform how investment decisions are made, including how money is invested into countries and corporations which behave sustainably.
For example, State Street Global Advisors has recently said it will vote against companies who do not reveal the racial and ethnic make-up of boards. Similar thinking must be applied with an LGBT+ lens.
Yet, the lowest common denominator with LGBT+ issues is that the topic is ‘too complex’ to do anything about. This has resulted in dormancy and silence across most parts of the investment industry which has put the sector behind its corporate peers.
There are three key dimensions of change needed to improve. One is intensifying the push for a deeper understanding of LGBT+ issues: this means fully supporting people of all sexual orientations and gender identities equally.
Another is stewardship with investment companies, clients and third parties to broaden the conversation around investing with a D&I lens, building on the work around gender investing to look at LGBT + lens investing.