In previous reports, the UBS Chief Investment Office (CIO) concluded that excluding people based on their sexual or gender orientation was bad for economic prosperity. This report explores how LGBTQ+ investors, who do not identify as heterosexual (including lesbian, gay, bisexual, and transgender), may need a different wealth strategy. We examine the legal and demographic considerations for LGBTQ+ investors, then outline a flexible investment approach that can help them to achieve their financial goals.
Investing for LGBTQ+ persons
In many countries a person’s sexual and gender orientation influences how other individuals, firms, and the state treat them. This research piece discusses how LGBTQ+ individuals in some parts of the world are regarded differently than heterosexuals in the eyes of the law. These legal differences, alongside certain important demographic trends, must be considered in financial planning.
LGBTQ+ exclusion can hurt economies
UBS CIO has previously found that LGBTQ+ individuals can face exclusion if people, companies, or countries make decisions or form opinions about them based on irrational ideas, not facts.
We concluded that excluding LGBTQ+ individuals has negative economic consequences. For example, LGBTQ+ persons may be discouraged from discussing their gender or sexual orientation at work. Hiding or lying about an aspect of one's life on the job can create stress and lower productivity, ultimately leading to below-trend growth for the economy as a whole. Countries that exclude LGBTQ+ individuals may prevent global companies from moving talented LGBTQ+ employees to locations where they are most useful, reducing labor market flexibility and potential economic growth.
Economics is not the main argument against prejudice
Economics is not the main argument against prejudice. But it is an argument against prejudice, and it is likely to become more powerful over the next ten years. Any form of prejudice stops the right person being in the right job at the right time. That hurts the efficiency of an economy, and the profit of a company. This will become more important as the fourth industrial revolution increases the value of workers.
Sexuality prejudice is widespread. Over a third of countries make it a crime to be LGBTQ+. In 60% of countries, people can be fired from work because of the gender of the person they are dating. It is not surprising that at least half the LGBTQ+ population chose to hide their sexuality at work, therefore. But people who hide their sexuality at work will still be victims of prejudice. The stress of disguising who you are affects how well you do at work.