Same-sex couples continue to face financial hurdles

The report indicates that although significant progress has been made in the pursuit of equality for same sex couples in recent years, this segment of the population continues to face certain financial hurdles.

“Even today, full equality has not yet been realized yet in Canada,” said Chris Buttigieg, senior manager, wealth planning strategy, BMO Financial Group. “There is some legislation that still puts unmarried same sex couples at a disadvantage.”

For example, the BMO report notes that intestacy rules in several provinces do not provide for same-sex partners, or for common-law partners in general. As a result, when a person dies without a will in place, assets go to the closest blood relationships – such as parents, children or siblings. This forces a same-sex partner to fight using other provincial legislation for a share of assets or for financial support, which can be especially difficult in cases where family members of the deceased partner did not support the same-sex relationship.

“Even though the legislation has changed and the laws have changed, some of that historical disadvantage continues on today,” said Becky McFarlane, director of community programs and services at The 519 Church Street Community Centre in Toronto. “While we have most certainly come a very long way, there is still a lot of important work left to do.”

Such considerations underscore the need for the financial services sector to engage this segment of the Canadian population in the financial planning and estate planning process – something the panelists said the industry could improve on.

“We’re working with [LGBTQ] community members every day…who feel very disengaged and isolated from the financial services sector,” said McFarlane. “I think that beyond the considerations of good financial planning, we need to make sure that we’re thinking about access to financial services.”

The BMO report suggests that individuals in the LGBTQ community earn higher levels of income compared to the population at large. It refers to statistics from the United States, which show that household incomes in the LGBTQ community are more than 20% higher than the average American family, at US$61,500 vs. US$50,000. This is attributed, in part, to the fact that LGBTQ couples tend to live in the largest cities, where incomes are above average.

“We know they tend to live in cities where there are higher paying jobs, and there tends to be a higher disposable income if they don’t have children,” said Gavin Clark, wealth advisor at BMO Nesbitt Burns.

However, those statistics are not generally reflective of the entire LGBTQ community, said McFarlane. “Those statistics often are misleading, and often only capture those individuals who are out,” she said.

In contrast, the panelists said many members of the LGBTQ community face financial hardship, have low levels of financial literacy, and are failing to implement financial plans.

“When it comes down to it, many gay and lesbian members of our community fail to even see the need to do a financial plan,” says Clark.

To effectively engage this population, it’s important for the financial services industry to foster an inclusive and accepting environment, said Ezra Anderson, financial service co-ordinator at BMO Bank of Montreal.

“It’s also that area of acceptance – knowing that they can come into the branch and be themselves,” Anderson said. “Knowing that someone is there to listen to them, gives them that sense of security.”

Added Clark: “We see the opportunities for our customers that come with having an inclusive space to be able to have these deeper and meaningful conversations.”