PensionsAug 9 2022

How to help clients overcome pension unfairness

  • To be able to list additional challenges the LGBTQI+ community face when accessing financial services.
  • To be able to explain historic pension inequities and work with clients to rectify this.
  • To be able to summarise ways in which financial firms can help make positive steps to inclusion and fairness.
  • To be able to list additional challenges the LGBTQI+ community face when accessing financial services.
  • To be able to explain historic pension inequities and work with clients to rectify this.
  • To be able to summarise ways in which financial firms can help make positive steps to inclusion and fairness.
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How to help clients overcome pension unfairness
Many LGBTQ+ clients still struggle with historic pension inequities. (Centre for Ageing Better/Pexels)

"An unfortunate consequence of this will be that they feel as though they have less money to save for the future, which could result in inadequate retirement savings later down the line."

There may also be family issues that mean a lack of inheritance money, which needs to be factored into any financial plan.

If they do not feel comfortable engaging with the financial services sector, they are less likely to seek independent financial advice.Andrew Megson, My Pension Expert

Royal London's pensions and legal expert Clare Moffat says the gender pension gap can hit lesbian couples in particular when it comes to putting enough aside for retirement.

She explains: "In a lesbian relationship, both women might carry a child and deal with the implications of pregnancy, and then work part-time, which would have an impact on retirement savings."

Financial isolation

Adding to this issue is the fact that LGBTQI+ individuals feel isolated from the financial services sector, Megson asserts.

Indeed, research published in FTAdviser revealed 68 per cent of customers within this community feel that their financial services provider is not taking steps to understand them or their needs.

More than a third (34 per cent) experienced an uncomfortable situation with their financial services provider because of their sexuality.

Megson adds: "If they do not feel comfortable engaging with the financial services sector, they are less likely to seek independent financial advice.

"Without a firm financial understanding, and feeling unable to seek advice, financial security in retirement becomes exponentially less likely."

It's difficult to navigate a legal and medical system that wasn't built for you.Jamie Lowe, True Self Wealth

As reported in FTAdviser in 2021, data from LGBT Great shone a spotlight on the overwhelming number of LGBT+ people who are seeking more from the investment industry.

Findings included:

  • More than 84 per cent of the community said that a financial adviser’s LGBT+ credentials matter to them.
  • More than 90 per cent said that an LGBT+ friendly approach to investing is crucial when deciding where to entrust their money.
  • The annual spending power of the LGBT+ community is estimated to be £3.3tn globally, with total household wealth at an even greater £19.02tn.

Lowe adds: "It’s difficult to seek help when there’s no one that you feel like you can trust. It’s hard to trust the financial services industry when every brochure you see about retirement has a heteronormative couple on the cover."

Understanding challenges

One of the reasons Lowe set up a financial planning practice that actively seeks to help gay and transgender clients is the need to understand the client, as there can be particular vulnerabilities traditional financial services processes do not always not pick up.

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