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Tips for Finding the Right Financial Advisor to Help LGBT Clients

Accredited Domestic Partnership Advisor Financial Advisor for Gay Couples Financial Advisor for LGBT Couples July 9, 2018 Author: Woody Derricks
Accredited Domestic Partnership Advisor

Because of recent changes in legislation, many same-sex couples may be seeking certified financial advisors who can lead them on the right path and explain complicated laws impacting their benefits and marriage protections. While the Defense of Marriage Act (DOMA) is no longer in place, there may still be blurred lines as to how to best plan for various family and financial circumstances. Regardless of your situation, having the right advisor can help you make sound, informed financial decisions.

First, it is important to know what the Defense of Marriage Act was and how it may still affect some same-sex couples. Before Section 3 of DOMA was overruled, same-sex marriages recognized by certain states were not recognized under federal law. Thus, this law prohibited same-sex married couples from collecting federal benefits.

While DOMA was overruled years ago, it may still affect same-sex couples that were not able to collect marriage benefits at the time, or same-sex couples that were not legally allowed by their state to get married and have since been in a domestic partnership or civil union. For couples in these situations, finding the right financial advisor can be even more challenging. The following tips can help same-sex couples find an advisor that is right for them.

1. What type of financial advisor is best?

There are different types of financial advisors based on what services you are looking for. Options to choose from include a broker or registered investment advisor. RIAs may be the right choice for same-sex couples. RIAs are firms that offer advice, financial planning, and manage assets and investment portfolios. Same-sex couples may trust this option as they have fiduciary duty to their clients, meaning it is their obligation to provide advice that meets the interests and needs of their client.

Also, you might want to find a Certified Financial Planner professional (CFP®).  A practitioner with a CFP® designation means that the advisor has undergone additional training and education.  The advisor should be well positioned to understand how all areas of your financial picture interact with each other.

2. Know your situation and legal ramifications

As previously stated, there can be some blurred lines for same-sex couples facing the aftermath of complicated laws that once stood in place, thereby preventing them from receiving their full benefits. Keep in mind whether you are married, in a domestic partnership, or civil union, each of these can have very different legal and financial ramifications. A financial advisor should be familiar with each of these situations.

A financial advisor who is an Accredited Domestic Partnership AdvisorSM (ADPA®) may have a better understanding of LBGT planning.  The ADPA® designee took classes and received a certification to better understand the unique financial challenges that same-sex couples face.

3. How much should you pay for advice?

Deciding on a budget is important when looking to hire a financial advisor. There are a variety of ways a financial advisor gets paid- the most common being, hourly, fee-based, and commission based. It is important for you and your partner to discuss what services you need and how much you intend to spend on financial planning. Make sure your financial advisor understands the services you need and your budget, and most importantly, based on that information is explicitly clear on how they expect to be paid.

4. Do some research

Whether this be a simple Google search or asking around for positive word-of-mouth referrals, making an informed decision is key. Be sure to ask friends or associates in similar situations who they use for financial planning. Do some research on which type of advisors or payment structure best meet your needs.  See what credentials different advisors have, read reviews, and take a look at social media.

Finding the right Financial Advisor to meet your needs as a same-sex couple in this post-DOMA era can be overwhelming.  If you have questions or need advice, contact us at Partnership Wealth Management. As an Accredited Domestic Partnership AdvisorSM, Woody Derricks, CFP®, understands the nuances of financial planning for same-sex couples. For more tips, see our blog on Financial Planning Strategies Post Windsor.

 


The opinions voiced in this material are for informational purposes only and not intended to provide specific advice to any individual. This information is not intended to be a substitute for individualized tax, legal, or investment advice. We suggest that you discuss your particular situation with a qualified tax, legal, or financial advisor.