Location: New York City
Assets under Management: $250 million
Production: $1.9 million
Expertise: LGBT investing
The last decade has been a tumultuous one for financial advisory services for the lesbian-gay-bisexual-transgender community. Before the Pension Protection Act of 2006 was passed, domestic partners could not roll over their deceased partners' retirement assets into other retirement accounts; they had to take lump sum distributions. A slew of states have since adopted gay marriage statutes, but at the federal level many rules still complicate financial planning; for example, there still are no survivorship rights concerning Social Security benefits for gay couples.
It's a fast-changing field that makes estate and tax planning particularly challenging for advisors serving LGBT clients. Ryan Svatora of the Zinn, Ray & Svatora Group at UBS says there weren't a lot of estate attorneys or CPAs with expertise in this space when he joined the practice in 2003, but that's since changed. “I think a lot of that stems from the gay marriage debates that have happened over the years,” he says. “As more people are becoming aware of the LGBT community and the inequalities that we really face, people are stepping up to the plate.”
For practices looking to distinguish themselves in the market, the College of Financial Planning now offers a certification called the Accredited Domestic Partnership Advisor; it covers wealth transfer, taxation, retirement planning, and estate planning issues affecting both LGBT couples and unmarried heterosexual couples. (Svatora recently earned the certification.) It can open doors: his practice is finding a niche with employers who need advisors who can explain specialized financial planning issues to gay employees.
The practice is growing; advisor Michael Zinn says the number of clients is up 30-40 percent over the past five years. About half of the $250 million in AUM comes from LGBT clients or their friends and family, he says. The advisors have a national network of attorneys and CPAs that they can tap for expertise, but they also use in-house professionals through UBS. An advisor's firm is an important element of his credibility with investors in this market, Svatora says.
“When you're working with a prospective LGBT client, not only are they going to want to ensure that you have the expertise to serve their needs, but they want to be sure that they're aligning themselves with an organization that supports the community and understands it,” he says. “It's incredibly important, and UBS gets it.”