Growing a retirement plan advisory practice and succession planning are two top-of-mind considerations for advisers. One way to tackle both of those goals and advance a practice while setting the next generation up for success, advocates say, is to embrace members of the LGBTQ community.
One of Northwestern Mutual’s practices serving the LGBTQ community is based in Milwaukee and has grown and thrived for more than a decade, and Brio Benefit Consulting of New York runs a benefits practice that also serves this market. These two practices grew and evolved naturally out of the interests and sensitivities of their leaders and are prime examples of how retirement plan practices can meet the financial needs of specialty groups.
“Brio Benefits works with a number of LGBTQ communities throughout the country, including the LGBTQ Community Center, True Colors United and the Callen-Lorde Community Health Center in New York,” as well as Center Link, which operates in 45 states, Puerto Rico and Washington, D.C., says Matthew Compton, director, retirement services, at Brio Benefits.
The Milwaukee-based Northwestern Mutual LGBTQ advisory practice began when a young adviser, Gina Pagán, who had started with the firm as a college intern, privately told her manager she is a gay Latina. Today, Pagán runs a six-person wealth management practice at Northwestern that focuses on women and LGBTQ people.
“Northwestern has a massive presence in Milwaukee, and I thought, ‘This is something I would want to be a part of,’” she tells PLANADVISER. “I was 20, 21 when I joined, and I was not out. I was not upfront about my lifestyle or my partner. Northwestern Mutual is really the only company and career I have known in my adult life. I am 32. I have grown up here. It certainly has been an evolution. Now I sit on the LGBTQ field advisory committee, and I have a leadership role in our firm.”
Pagán says she is enormously grateful to Northwestern Mutual and her managers for supporting her and helping her to serve the community and attract that clientele.
“The bulk of what I do is on the individual side, so I help manage small business retirement plans,” Pagán says. The key to serving this community, she says, is to let them know that they can ask her authentic questions and not be judged or intimidated.
“Women and people in the queer community have these experiences with other advisers where it is uncomfortable and they don’t feel safe or [receive] comprehensive planning because they couldn’t be totally authentic,” she says. “I want to be that person for other folks in my community.”
“Now I sit on the LGBTQ field advisory committee, and I have a leadership role in our firm.”
Compton adds that now that pandemic restrictions are lifting, it is important for advisers serving this market to provide as much face-to-face education as possible and make sure they meet personally with members of these organizations. Obviously, he adds, it is vital for advisers working with LGBTQ people to be “aware of how they would like to be addressed and recognized. A big part of that is making sure the community knows we recognize their needs.”
Pagán says she is grateful for Northwestern’s open-mindedness toward an array of diverse people. As the number of clients and assets she serves has grown, so, too, has the understanding among Northwestern Mutual’s leadership team of the value that Pagán brings to these clients.
“It was new for them to navigate as well, but always from a place of trying to do it right,” she says. “I have been able to lend my insight, and we have grown together. I am super proud of the progress Northwestern has made, and it has impacted me, personally. I don’t think I would be here if I didn’t think my company valued me as a human, as a person.”
Triple the Clients
Northwestern Mutual has championed efforts to hire and serve a more diverse and inclusive population. Last year, Northwestern hired nearly 50% more female advisers, and, since 2015, diverse advisers overall have grown by 66%. There has also been a 101% growth in diverse field leaders over the same time span.
Since increasing its LGBTQ efforts in 2017, the number of clients Pagán and her team serve has tripled.
When working with any niche demographic market, advisers must be mindful of using inclusive language and be excellent listeners, Pagán says.
Financial planners and retirement plan advisers, for the most part, “are very white, very male and older,” she says. “Over the last year, the movement toward inclusion and diversity and equity has become more important” and is something that retirement plan practices should consider.
“It’s important because the landscape of our country is going to be changing, and the generations coming in behind us are going to be looking different,” Pagán says. “Wealth transfer is going to be different,” so in preparation for this, practices need to seek out more diverse talent and establish a presence in various types of communities.
“It has to be more than just donating or attending an occasional Pride Fest,” she continues. “It’s about making sure we align our actions with our values.”
Being open-minded is key for asset management firms and retirement plan advisers in order to be relevant in the future, Pagán continues. “They also need to work with Millennials and be prepared to answer more questions about ESG [environmental, social and governance] investing.”
Compton concurs that “socially responsible, holistic, inclusive and diverse investing are incredibly important topics” for the LGBTQ community. And it shouldn’t just be advisers who expand their umbrellas to the community. Asset managers and recordkeepers should “demonstrate a culture of diversity and inclusion,” as well, he says.
“The diversity and inclusion piece is going to become even more important as these Millennials start to age,” Pagán says. “If there isn’t any action [taken] upon it, the unfortunate truth is that firms will be left behind.”