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Firm Offers Online Financial Services for Homosexuals
Advising Gays About Green

By Jeffrey L. Newman
ABCNEWS.com from TheStreet.com
The rainbow flag, the nationally recognized symbol of the gay and lesbian community, has many colors, but Walter Schubert is concentrating on green.

Walter Schubert

     The openly gay member of the New York Stock Exchange is capitalizing on his stature by launching the Gay Financial Network, an online financial service aimed at gay and lesbian investors.
     Schubert, 41, is a third-generation member of the NYSE who worked on the trading floor from 1977-1996. He is also president of SGI Ltd., which specializes in institutional information architecture and order execution in publicly traded equities.
     GFN seeks to become the premier online, one-stop fully integrated financial service network dedicated to serving the gay market. Its services include an online trading and investment center, financial planning, portfolio management, a banking, real estate and mortgage referral network, insurance and shareholder initiatives.
     The idea came to Schubert earlier this year, when he began thinking about getting out of institutional investing and into retail. He says he then realized there was a void for financial services for gay and lesbian consumers, and saw the Internet as the most viable commercial way to fill that gap.

Gays have different investment issues, such as how they will plan for old-age considering that many are estranged from their families or won't have children.
�Author Peter Berkery

Rich and Wired
�The gay and lesbian culture is different. Their financial needs are different,� says Schubert. �That necessitates a difference in the perspective on their financial planning.�
     According to Strub Media Group, a national marketing company, the average gay household income is $63,199, compared with $36,500 for all households in the United States. Furthermore, since many gay couples are DINKs (dual income, no kids), their disposable income is even higher than their average income would suggest.
     And Simmons Market Research estimates that of the estimated 40 million to 50 million Internet users, about 4.8 million of them are gay and lesbian.
     GFN estimates that the tangible assets of the gay and lesbian community in the United States exceed $800 billion, and that 3.2 million gays and lesbians own stocks, of which 242,000 actively trade securities, and 88,000 use online banking features.

Seeking Progressive Attitudes
A handful of other financial service companies are already marketing to the lucrative gay market. Christopher Street Financial, for instance, is a 16-year-old New York brokerage firm targeting gays and lesbians, with a focus on socially responsible mutual funds.
     American Express Financial Services has a solid reputation for serving the gay market. Brokerage houses such as Dean Witter and Merrill Lynch have ad campaigns in gay and lesbian publications trying to lure the gay dollar. And Los Angeles-based Pride Fund is a mutual fund run by Meyers, Sheppard and Co., that seeks out undervalued, well-managed companies that have specifically stated progressive policies toward gays and lesbians.
     But none are using the Web to capture this niche market.
     �Dealing with a financial professional who understands their needs is crucial,� says Peter Berkery, author of Personal Financial Planning for Gays and Lesbians, and the forthcoming Gay Finances in a Straight World, due out in January.

Different Issues Than Straights
Berkery says gays and lesbians come to the investing process with different issues than heterosexual investors, such as how they will plan for old age considering that many are estranged from their families or won't have children to take care of them.
     But is the same-sex denominator enough of a reason for gay investors to switch from their current financial planner to GFN?
     Schubert thinks so. He says gays and lesbians, especially those outside cities like New York and Los Angeles, which are slightly more gay-friendly, need a company that will address their needs in a non-judgmental environment. He says his advice won't solely be based on sexual orientation, but on sound investment advice.
     �Dean Witter and Merrill Lynch have been on the chase for the gay dollar, but our single mission is to focus our efforts on the delivery of financial services in a comfortable environment,� he says. �We're not about chasing the gay dollar.�

Performance, Not Orientation, Matters
But Andrew Tobias, a well-known investment guru, says while the concept is good, he's not so sure it is enough of a reason to switch financial planners. He says GFN's success will depend on its ability to focus on solid investments, not the sexual orientation of its leader.
     �When I want cash, I don't go to a gay ATM machine. And when I buy stocks, I don't feel I need to have a gay broker, or a Jewish broker or a liberal broker, even though I'm liberal, Jewish and gay,� says Tobias, who likens services like this to sports-themed Visa cards and MasterCards. �But, the notion of being proud and trying to keep the money in the gay family and all of that is a very powerful one.�
     Tobias points out that for investors who are looking for socially responsible investments, GFN is an admirable concept. He adds that had investors put their money into gay-friendly and socially responsible firms over the last decade, they would have done extremely well, and beaten the S&P 500 significantly. Still, there are others who remain skeptical of Schubert's venture.
     �We all want them to succeed, but the question is whether or not people will shop or buy from them because they are gay branded,� says Bob Witeck, president of Witeck-Combs Communications, a Washington, D.C., gay public relations and marketing company. �That's not enough of a reason.�
     �Gay and lesbian customers buy for the same reason everyone does�quality, service and competitive prices,� he adds. �Gay branded doesn't mean it will be attractive to the average gay buyer. I think it's questionable as to whether they will have the marketing power and resources to compete in the financial service world.�
     Schubert expects to announce several strategic partners between now and mid-January. And while only time will tell whether Gay Financial Network will succeed on its own merits, or falter on good intentions, with the right game plan and the right amount of investment know-how, GFN may prove to be a niche marketer�s pot of gold at the end of the rainbow.

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