The saga of what the SCMP called Cecil Chao’s “lesbian marriage ‘reward’” may have come as a surprise to some in Asia; but to others, it was just the latest manifestation of an increasingly visible minority in the region coming into its own, in spite of lingering social attitudes that Chao’s unconventional dowry exemplified.
Experts who have been studying the size and composition of Asia’s lesbian, gay, bisexual and transgender (LGBT) community have estimated its size at more than 200 million men and women, with a combined annual spending power of some US$800bn. Globally, the LGBT population is estimated at more than 400 million, with a spending power of some $3trn.
Against this backdrop, a well-known, Hong Kong-based advisory firm, Financial Partners, has joined forces with an established LGBT investment management company to create a wealth management operation aimed exclusively at Asia’s LGBT community.
According to Howard Clark-Burton, chief executive of Financial Partners, the decision to launch LGBT Wealth, as the new venture is called, was based on compelling evidence that those who live lesbian, gay, bisexual or transgender lives are more comfortable with, as well as more likely to benefit from, being advised by a wealth manager who specialises in advising such clients.
Such individuals, he says, find it “far more comfortable to disclose that they are LGBT, and possibly have an LGBT partner , to an adviser who understands and is sensitive to the idea, and who might even be LGBT themselves”.
Beyond this, though, LGBT individuals also normally have specific needs that an adviser not used to working with LGBT individuals and couples may be unfamiliar with, adds Clark-Burton.
“In many cases, same sex couples aren’t married, and for those who are, few countries provide the same level of protection or support in law that straight married couples enjoy,” he explains.
There are other complications as well, he notes – for example, as LGBT couples age, they often do so without children to help with their care.
Other burdens and challenges that their “straight counterparts” typically don’t have to worry about include whether retirement homes and/or nursing homes will be prepared to accommodate openly gay or transgender individuals, Clark-Burton points out.
Joint venture
LGBT Wealth is a 49%/51% joint venture between FP and LGBT Capital, a company founded in 2010 by London and Hong Kong-based Galileo Capital Management, to invest in and cater for the LGBT consumer market.
Under the arrangement, LGBT Capital will provide the LGBT-specific information, contacts and marketing to the venture, while FP will be responsible for overseeing the operation’s advice and wealth management services. Financial Partners is regulated in Hong Kong by its Securities & Futures Commission, the Hong Kong Confederation of Insurance Brokers and the Monetary Provident Fund Schemes Authority.
In addition to Hong Kong, the plan is to roll out the LGBT Wealth concept in Singapore and Shanghai over the next couple of months, “by working with local financial advisory firms” in these other two cities, according to Clark-Burton.
The partner firm in Singapore is AAM Advisory, according to AAM Advisory chief executive Matthew Dabbs, who added that the company is "actively looking to recruit advisers from that community to support the initiative".
Meantime, Financial Partners, through its stake in GBT Wealth, will be looking to partner with advisory firms in other Asian locations, Clark-Burton added, without saying which markets are being considered.
Founded in 2009
Galileo founders Paul Thompson and Anders Jacobsen are both gay, according to press accounts of the founding of LGBT Capital, although the business partners do not make a feature of this in their own literature.
Prior to starting Galileo in 2009, their previous experience in investment management included stints at Goldman Sachs, Prudential Financial, Bankers Trust and Chase Manhattan Bank.
LGBT is up and running now, with a website illustrated with photographs of same-sex couples – some of retirement age – at www.lgbt-wealth.com.
The home page features the slogan, “straight advice for Asia’s LGBT community”.
Growing market
Financial Partners and Galileo are not the first financial services businesses to see the potential in accommodating the LGBT community. Last year Morgan Stanley Wealth Management, in the US, announced that it was launching a LGBT "initiative" to provide financial advisers "with wealth planning tools, business development and marketing resources designed specifically for LGBT prospects and clients".
"Same-sex marriage is legal in Iowa, Massachusetts, Connecticut, Vermont, New Hampshire, New York, Washington and the District of Columbia, and voter-approved freedom to marry laws in Maine and Maryland are being implemented," Morgan Stanley head of US Field Management Douglas J Ketterer said, in a statement unveiling the new initiative last December.
"The other remaining states have either a variety of civil union laws or no legal standing at all for same-sex couples. This has created a host of financial planning complications for the LGBT community."
Also last year, the US arm of Prudential issued a study on the LGBT community, entitled The LGBT Financial Experience, which it said "dispels a number of myths and sheds light on the financial experience and challenges of the LGBT community".
Financial Partners is part of the Financial Partners Group network, which also includes Dubai-based Mondial and Imperium Capital of Indonesia and Malaysia.
To read about a new law that is requiring advisers in Hong Kong which sell investment-linked insurance products to disclose commissions to their clients, click here.
