Seeking financial services can frequently be a hostile experience for LGBTQ individuals. Spark Wealth Advisors, a niche RIA started last year by Christopher Johns, an openly gay financial advisor based in Jacksonville, Florida, is working to change that.
According to research from the
"Feeling uncomfortable shouldn't be a reason not to plan for your future," Johns said. "I'd like to see the gay community as a whole have access to financial planning and financial planners [with whom] they feel comfortable discussing their unique situation."
The consequences of such exclusion are clear. LGBTQ Americans report saving less, feeling more burdened with debt and less confident that they will be able to comfortably retire compared to other groups, according to recent research from the
Johns, who started Spark Wealth Advisors last year as a solo advisory firm, said that focusing on such a niche clientele is a point of concern when starting out.
"You don't ever want to ostracize potential clients, but at the same time, I do think that it's an underserved population," he said.
Read more:
Read our conversation with Johns below as he talks about serving an underrepresented population, starting an independent RIA and pursuing a niche clientele through a remote practice. The interview has been lightly edited for length and clarity.
Financial Planning: What led you to start your own RIA?
Johns: I've worked for a couple of larger institutions, and I didn't feel that they were really allowing advisors the freedom to help their clients and put their clients first. It was more about putting the business first.
I've always worked in some facet of finance. I was a mortgage banker and then I became a personal banker for Wells Fargo and a couple of other bigger institutions. I went to work for a wirehouse and didn't love what I was doing. Then I started working for a couple of credit unions. I worked in the investment services division of a credit union locally. I love doing that. It was a little bit closer to our mission, which is about putting the client first and not being so worried about profits.
I left the client-facing role, and I went into a compliance role where I did regulatory compliance. But I missed working with clients. That is what led me to want to go independent. I missed helping clients. I had done that earlier in my career, so I just decided to go ahead and try it out.
FP: What made you decide to focus on gay men as a niche clientele?
Johns: Being a gay man myself, I think it's an underrepresented population. I feel like for a lot of different reasons, whether that be not having an accepting family or feeling like you're not accepted by your community, gay people, especially gay men, have a tendency to get started a little later in life, there's a bit of catchup. And for that reason, they're just underrepresented.
Hopefully, through a lot of things that have been changing in the last six or seven years, that's going to change. But, it's still a large percentage of people who don't feel comfortable going in and discussing their situation with a financial advisor. So, I'd like to see the gay community as a whole have access to financial planning and financial planners with whom they feel comfortable discussing their unique situation.
FP: What financial issues are particularly relevant to gay men as a clientele?
Johns: I would say that part of it is about having unique financial needs and part of it is about having someone you feel comfortable with or with whom you have something in common. You know, I've seen one guy who serves Navy fighter pilots. They don't necessarily have specific financial needs, but there is common ground there, and maybe you understand their way of thinking.
For gay people, there can be unique healthcare needs that the straight community doesn't necessarily have to deal with. There can be blended families, whether you were previously married, you've had kids and now you have a partner but you all stay close to each other — surrogacy, adoption and planning for those things. Those are unique challenges. They're not exclusive to the gay community, but they are more common in the gay community.
There's also an estate planning aspect of it that I think gets missed a lot. While gay marriage is now legal, it's just like anything else that changes, there's been a slow uptick in the percentage of people who get married. Just a couple of years ago a [
FP: How is your firm going to operate?
Johns: I envision being mostly remote. That way we're accessible to clients nationwide. I think, due to COVID, that's become more acceptable. Speaking to some other people who've worked remotely before and now have gone to that model, they're saying that their clients aren't necessarily wanting to go back to in-person meetings. Hopefully, that'll stay that way.
We're fee-only. We don't charge any kind of commission. We don't sell any kind of commission products. Right now, we just charge an average AUM fee, which is basically 1%.
One thing we did do a little bit differently is that we don't have an account minimum. We wanted to do that for people who maybe are still growing their balances but still need access to financial planning. So, if you have assets under $250,000, it's $650 a quarter, and we'll still work with you regardless of how much money you have to invest.
FP: What does an ideal client look like for you starting out now?
Johns: There are probably two ideal clients. One of them is going to be young professionals either looking at doing adoption or surrogacy or already having children.
And then the other ideal client is going to be maybe an older, gay couple who have not sought out financial planning because they never felt comfortable doing it. Then we can assist them in transitioning into retirement. I would say mostly, though, it's probably going to be early to mid-level, younger clients who are looking to start a family.
FP: Do you worry about starting your own RIA or pursuing a niche clientele?
Johns: A huge concern with doing such a specific niche is that you don't ever want to ostracize potential clients, but at the same time, I do think that it's an underserved population.
Thanks to some of these other online forums, we've gotten a lot of great feedback. You know, we've posted a couple of times online about going down this route and everyone has been extremely supportive. Hopefully, that will translate into clients as well.
FP: What was the impetus for this move?
Johns: I used to live in Wilton Manors. And I don't know if you're familiar with Manors, but it's basically like, San Francisco was the gay capital of the United States 10 years ago, and Manors is now the gay capital.
I always wanted to start up a gay financial planning firm when I lived there because there's such a large population represented. This has always been something I've really wanted to do and work toward. Unfortunately, time, money and my career have always gotten in the way.
We were blessed to have a little bit of money in the bank and a little bit of financial stability. We kind of got to the point where it's like "now or never." I think seeing the success of people during COVID who were working remotely with clients was the straw that broke the camel's back. We thought, "Let's just go ahead and do this."
We're in Jacksonville, Florida. Before COVID it was like "OK, we're going to open up this firm. We're going to do this very specific niche. And we're going to have a pool of maybe 100 people." Now, with everyone being way more comfortable with doing things remotely, that expands the horizon and gives you a much larger potential client pool.
FP: Has the political situation in Florida been on your mind while starting your RIA?
Johns: No, not necessarily. At the end of the day, at least our governor is pro-business. And at the end of the day, we are a business.
There's a very large and active gay population in the state, and they're certainly not going anywhere. So, my hope is that a lot of the political stuff that's going on right now is more noise and we'll get away from that.
