Open Arms

Despite its reputation for having a somewhat bawdy sales culture, Wall Street has been downright cutting edge in its equal treatment of gay and lesbian employees. So why are gay and lesbians still so suspicious?

As a junior at Penn State University, Steven Schmitt came out of the closet to his best friend. “He was surprised, but supportive,” remembers Schmitt, now a financial advisor with Wachovia Securities in Morristown, N.J. With his best friend’s help, Schmitt was able to open up about his sexual orientation with friends and acquaintances. In fact, college friends were so supportive, that by the next fall, during the Thanksgiving break, Schmitt had the courage to tell his mother—who told his father and siblings, whom he didn’t have the nerve to confront himself. To his relief, his family members were “shocked” but sympathetic and accepting of him as a gay man. In fact, family and friends were so understanding, that at his graduation just a year later, in May 2001, Schmitt and his family were joined in their celebration by his partner. And it has been that way ever since at holidays at Schmitt’s parents’ home in Saddle River, N.J.

“It is easier coming out now than it was before,” Schmitt says. But he adds, “It’s still not easy.” At the age of 26, he’s already a five-year veteran (three years working as for himself as a financial advisor), and he has around $25 million in assets under management revolving around gay and lesbian financial and domestic-partnership issues. Indeed, Schmitt’s sexual orientation is also central to his position with his firm: He is regional president of an employee support group called the Gay and Lesbian Employee Association (GALEA), which may have as many as 1,000 Wachovia employees as members (the association includes bank employees, both straight and gay; the roll is higher when you include those members who requested anonymity). The mission of GALEA, a Wachovia-sponsored employee organization launched in 2001, is to “promote an awareness of and support for sexual-orientation diversity in the workplace.” Most big Wall Street firms have similar officially sanctioned groups (see chart), and, indeed, offer full benefits to domestic partners.

“Financial services firms and banks historically have been leaders for equal treatment of gay and lesbian employees,” says Daryl Herrschaft, director of the workplace project of the Human Rights Campaign Foundation. “I don’t have any proof, but I think it’s because a premium is placed on performance. It’s really capitalism at its best.”

Yet, Schmitt says he was terrified to come out at Merrill Lynch, where he worked as a sales assistant right after college. To his fellow employees at Merrill’s World Financial Center office, “I was not gay,” he says, “even though I knew that I wanted to sell financial services to the gay and lesbian community.” He kept his secret for about two years before he presented his business plan, which was to build his own book around gay and lesbian financial issues, to his branch manager, sales manager and a few top brokers.

That was in 2003. And in those weeks leading up to his presentation, Schmitt says he couldn’t sleep and nervously practiced in front of a mirror. He nevertheless went ahead with his presentation. Merrill Lynch’s reaction? “They loved it. Everyone supported it,” he says. “The worst days of my life turned out to be the best. My salary increased by 60 percent and life was great.” Lots of Merrill advisors across the country have a similar niche practice, he says. Since only six states and a handful of cities offer domestic-partnership systems, expertise in this area is a burgeoning financial-advisory niche to help the estimated 10 million to 15 million gays and lesbians nationwide.

Yet, despite all of that support, Schmitt says he isn’t sure he would divulge his homosexuality—if it weren’t absolutely necessary for business reasons. Herrschaft isn’t surprised; he says that people who work at financial services firms “are afraid to come out.” He says there are few—if any, to his knowledge—openly gay Wall Street executives in boardrooms.

After all, except for New York City and a handful of other cities, 17 states and Washington, D.C., there is no law protecting a manager for firing someone based on his sexual orientation, says Pearl Zuchlewski of Kraus & Zuchlewski, who represents individuals in sexual-discrimination cases in the financial-services industry. Again, many financial firms expressly prohibit discrimination on sexual orientation. But, says Schmitt, “Even though people are supportive, you always worry what they are really thinking. You have to be careful.” For example, when in need of his branch’s communal color copier, his instinct is do his gay and lesbian material in the evenings or on weekends so as to avoid provoking any jokes or mocking comments, Schmitt says.

Schmitt’s experience isn’t unusual for gays and lesbians on Wall Street, gay activists say: By and large, firms have been supportive, even way ahead of the curve in offering gay and lesbian employees benefits and diversity training; but, gay employees still seem to feel vulnerable.

It’s one thing for the home office to issue policy directives, but how well they are implemented across the franchise is a whole other thing. “It’s difficult to discuss these issues in a generic way,” says Zuchlewski, “because it can vary so widely. It depends upon the firm, the culture, the people running various offices and where the offices are located. There is a huge range of sensitivities [to this issue].” But, she adds, “I do think there are a lot of good-faith efforts [industrywide].”

Herrschaft agrees: “Corporations have their work cut out for them in making the policies work for them where the rubber meets the road—in far-flung facilities. But corporate America is actually way out ahead.”

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