LGBT Investors More Optimistic Than Others

Confident they’ll reach their financial goals

November 12, 2012 – NEW YORK–(BUSINESS WIRE)–Following the U.S. Supreme court ruling overthrowing the federal Defense of Marriage Law (DOMA), LGBT investors reported feeling more optimistic than other investors about the country’s economic outlook and their own personal finances, according to a special edition of UBS Investor Watch.

This optimistic outlook is visible in both LGBT investors’ long-term perspective (67% v. 57%) and their mid-term view (63% v. 49%) of the economy compared to other investors. Regarding their own personal finances, 59% of LGBT investors said they were extremely or very confident they would meet their financial goals, compared to 52% of other investors.

However, while many LGBT investors feel that the DOMA decision would have a positive impact on their financial security (48%), the LGBT community still has more personal financial concerns than investors as a whole. Some of those concerns are unique to their community, such as being able to find LGBT-friendly long-term care facilities, and marriage equality.

A higher appetite for risk

This dichotomy between an optimistic view about personal finances and significant personal financial concerns may explain the contradiction of LGBT investors reporting they have a higher appetite for investment risk profile other investors (25% v. 16%), yet their actual asset allocation shows them to act more conservatively, holding more cash (26% v. 22%) than other investors.

“LGBT investors are more optimistic than other investors about both the U.S. economy and their own personal finances, likely in part due to DOMA,” said Emily Pachuta, Head of Investor Insights, UBS Wealth Management Americas (WMA). “But we also see that LGBT investors are more worried about the personal financial issues they share with other investors like having enough money set aside for retirement. Plus they have additional concerns that are unique to the LGBT community such as being able to find an LGBT-friendly long-term care facility when they get older.”

UBS Investor Watch is a quarterly publication analyzing investor sentiment and behavior. Findings reported in the special LGBT edition are based on 500 investors who self-identified as members of the Lesbian, Gay, Bisexual, and Transgender community, and 2,000 other investors who completed surveys in late September through early October 2013.

More Personal Financial Concerns than most

While LGBT are more optimistic than other investors about the U.S. economy and their personal financial situation, they are more concerned about personal financial issues. All investors said their biggest worry about personal finances surrounded long-term care issues. However, LGBT investors are even more worried about being able to afford the health care and support they need in their old age (31% v. 25%), having someone to care for them in their old age (24% v. 13%) and having enough money set aside for retirement (18% v. 11%). In addition, four out of the top five biggest personal financial concerns for LGBT investors were unique to their group: being able to find LGBT-friendly care facilities (31%), marriage equality (29%), having the right to make health care decisions for spouses/partners (29%), and ensuring my assets pass to my spouse/partner at death (25%).

As reported in the most recent UBS Investor Watch report, most investors, including LGBT investors, believe that they will experience three distinct phases of retirement over the course of multiple decades – Transition, My Time and The Last Waltz. However, LGBT investors are more likely to underestimate income needs over this multi-phased retirement compared to other investors – Transition (55% v. 58%), My Time (61% v. 63%) and The Last Waltz (52% v. 56%). The financial services industry typically uses 75% to 80% of pre-retirement income as the benchmark for financial security.

LGBT investors were equally concerned (72% v. 73%) as other investors with the potential impact of the political environment in Washington on their personal financial lives. But they were less concerned than others about other macro issues, including the potential impact of rising health care costs (47% v. 60%), the size of the national debt (39% v. 58%), and tax increases (26% v. 42%).

LGBT investors do not feel they need an LGBT advisor (18% have one). While they are highly satisfied with their advisors (TK%), they are less satisfied (57%) that those advisors understand the financial challenges facing same sex couples or that they work at firms (51%) committed to the LGBT community.

Post- DOMA Impact

More than half (54%) of LGBT investors felt the Supreme Court DOMA decision was a landmark ruling, and 52% said it “felt like things had changed for us.” The Supreme Court’s DOMA ruling had a major impact on LGBT investors, particularly in states where same sex marriage is legal, and more so among women and married couples than among men and single people.

LGBT investors are more optimistic than other investors about both the U.S. economy and their own personal finances, likely in part due to DOMA

For example, 60% of women surveyed felt a positive financial impact from DOMA, compared to 49% of men. Eighty four percent of women LGBT investors said that the extension of medical decision making rights to spouses was a highly important impact of the court decision, compared to 73% of LGBT men. And 82% of women LGBT investors said the extension of retirement and health benefits to same sex spouses was highly important, while only 69% of LGBT men had the same response. A majority of LGBT couples (58%) felt a stronger impact from DOMA than single LGBT investors (33%).

The UBS Investor Watch LGBT survey revealed interesting differences in the impact of the DOMA ruling based on whether their state of residence allowed same sex marriage. In states where same sex marriage is legal, 63% of LGBT investors said it was a landmark ruling, a sentiment shared by only 49% of LGBT investors who lived in states that do not allow same sex marriage. Similarly, 60% of LGBT investors in states where same sex marriage is legal felt the ruling would make their lives easier. That number was only 47% in other states. Fifty-six percent of investors in states that allow same sex marriage felt the ruling had a positive impact on their overall financial security, compared to 42% of those in states where same sex marriage is not allowed.

Whether a state allows same sex marriage has an impact on LGBT investors’ decisions about where to call home. One in three believe they are more likely to move to a state with same sex marriage, and the vast majority will take state laws into consideration if they find themselves considering a move.

A full copy of the special report can be found on the UBS Investor Watch – LGBT edition page.

UBS Pride

UBS is proud of the diverse workforce of individuals that help make our firm a dynamic and innovative place to work. To support and create an inclusive culture, UBS sponsors Pride Networks which are open to all employees, regardless of sexual orientation. Pride is a valuable cross-functional discussion forum that provides support for employees who are interested in creating and sustaining a lesbian/gay/bisexual/transgender (LGBT)–friendly environment where people can celebrate the power of all of our differences

Key efforts by UBS in LGBT equality and inclusion

For six consecutive years, UBS has earned top marks from the Human Rights Campaign’s (HRC) Corporate Equality Index (CEI) which measures corporate policies and practices related to lesbian, gay, bisexual and transgender (LGBT) employees.
UBS was among the first Wall Street firms to offer a tax offsetting benefit for employees who pay for healthcare coverage for their same sex partners or spouses, and to provide comprehensive healthcare benefits to transgender employees
UBS developed resources focused on wealth management for LGBT
We are proud of our ongoing partnerships with a number of LGBT organizations that focus on health, education and professional development including Hetrick-Martin Institute, Gay Men’s Health Crisis (GMHC), Out and Equal, Out on the Street, Out for Undergraduate Business Conference and a National relationship with Lambda Legal Education and Defense Fund
UBS is a proud member of the Business Coalition for Workplace Fairness and OPEN Finance (formerly known as the Interbank Roundtable Committee)
UBS supported the Amicus Brief to overturn the Defense of Marriage Act which paved the way for Gay Marriage legalization

The LGBT edition of UBS Investor Watch, 507 LGBT investors responded to our survey from September 24 – October 14, 2013. Additionally, 2,219 other investors participated in the survey as part of our standard quarterly UBS Investor Watch, allowing for comparisons. All those surveyed have at least $250,000 in investable assets; half have at least $1 million in investable assets.

About UBS Wealth Management Americas
UBS Wealth Management Americas provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra-high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management U.S. business, the domestic Canadian business and the international business booked in the United States.

About UBS
UBS AG and its subsidiaries draw on a 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its pre-eminent global wealth management businesses and its universal bank in Switzerland. Together with a client-focused Investment Bank and a strong, well-diversified Global Asset Management business, UBS will drive further growth and expand its premier wealth management franchise.

UBS is present in all major financial centers worldwide. It has offices in 57 countries, with about 35% of its employees working in the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS employs about 62,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).