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Members of the LGBTQIA+ community still struggle, in some cases, to access financial services that would help them manage their money.
According to a survey by the National Endowment for Financial Education, some 30% of LGBTQIA+ adults have experienced prejudice, discrimination or exclusion in the financial services industry, whether from individuals or organizations. The online survey of over 1,000 adults from the LGBTQ+ community ran from May 6-17.
Among those who encountered such barriers to accessing financial services, many noted that age and orientation were the main reasons they felt led them to this experience. Additionally, transgender respondents experience the most discrimination, according to the survey.
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“As a member of the LGBTQIA+ community who has personally experienced many layers of bias within financial services, this issue touches us very closely,” said Billy Hensley, President and CEO of the National Endowment for Financial Education. , in an email.
“I think it’s easier to ignore the subjugation, biases, prejudices, phobias and ‘isms’ that occur in personal finance if we assume that financial and social advancement is solely on the individual’s decisions, measured solely by financial results,” Hensley said. “If we average everyone together, we ignore everyone’s authentic, unique and diverse lived experiences.”
He added that these experiences further hamper the wealth of a historically marginalized group in the United States.
“While not specific to this data, we know that between gender, people of color and members of the LGBTQIA+ community, there are barriers to wealth creation and income disparity that certainly contribute to establish a level playing field for financial well-being,” he said.
What can be done
In addition to feeling unwelcome in the financial services industry, nearly 40% of respondents said they were discouraged by the way financial services were marketed or offered, meaning that fee structures, demands or approval requirements prevented them from applying for financial assistance.
The report found that while around half of LGBTQIA+ respondents said the quality of their financial life was what they expected, around 39% said it was worse than expected. Additionally, 60% live paycheck to paycheck, according to the report.
This data can be useful to financial service providers such as banks, insurance companies, etc. In addition to providing inclusive environments for all, they can examine these other barriers to entry.
“Representation is key,” Hensley said. “We need greater national awareness of how often discrimination, prejudice and exclusion occur among all populations.” He added that a better understanding of the current landscape is possible with better data to inform positive public policy and regulation.
There is also a financial incentive for banks, insurance companies and other financial services companies to be more inclusive. Today, more Americans than ever before identify as LGBTQIA+ and the demographic represents one of the fastest growing population segments, according to census data. Additionally, the community has nearly $1.4 trillion in purchasing power, according to The Pride Co-op, an LGBTQ-focused market research and intelligence agency.
“When you limit anyone’s ability to participate fully and fairly in the economy, you are preventing them from living their best financial life,” Hensley said. “It also has a negative impact on the economic health of the country.”
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