The US Supreme Court's July 2013 overturn of Section 3 of the Defense of Marriage Act has renewed attention on the lesbian, gay, and bisexual (LGB) community. Data from the 2012–13 MacroMonitor about these populations are new. About 4% of all US households are LGBT-headed households (lesbian, gay, bisexual, and transgender). LGB-headed households have sample sizes sufficient for a reliable analysis: Gay-headed households (2.8 million) and bisexual-headed households (1.8 million). These households are, therefore, the focus of this profile. Changes in federal law are not the only reason for financial-services providers to take notice of this market segment. For example, some organizations—predominantly retailers and arts organizations—recognize the importance of and value the support from the gay and bisexual community.

Demographics

Gay and bisexual household heads are younger than are heterosexual ("straight") household heads. The majority of gay and bisexual household heads want to live close to the action and advantages available in and around large metropolitan areas.

• Gay household heads have a mean age of 44, in comparison with a mean age of 41 for all LGBT-headed households; bisexual household heads are youngest, with a mean age of 38. The mean age for all US household heads is 51.
• LGBT-headed households have a higher mean household income ($76K) than do all US households ($69K); gay-headed households have a higher mean annual income ($80K) than do bisexual-headed households ($71K).
• Gay-headed households have a low incidence of dependents, in comparison with 35% for all US households. Bisexual-headed households have the highest incidence of dependents (45%), because 65% of these household heads are women.
• The younger the age cohort, the higher the proportion of LGBT-headed households—for example, 41% of Millennials but only 6% of Older Boomers.
• Gay-headed households are almost half again as likely to rent as are all households; bisexual-headed households are about two and a half times more likely to rent.
• Almost half of gay-headed households live in a large city; another third live in the suburb of a large city. Fewer than one in five bisexual-headed households live in a large city; about one-third live in the suburb of a large city.

Financials

Child-free households typically have lower net worth than do households with children. They own fewer financial products because they have no need for education-savings products, and most are not concerned about leaving an inheritance, for example.

• The mean number of financial products for all LGBT-headed households is 17, in comparison with 22 for straight-headed households.
• The mean net worth of LGBT-headed households is $232K, in comparison with $365K for all households. Gay-headed households have a higher mean net worth ($256K) than do bisexual-headed households ($164K); net worth is related to age.
• LGBT-headed households use a mean of six financial institutions; straight-headed households use a mean of seven institutions.
• The estimated number of annual financial transactions is 711 for gay-headed households, in comparison with 682 for bisexual-headed households, 662 for all LGBT-headed households, and 638 for all US households.

Financial Attitudes

• Although fewer than 20% of gay-headed households consider themselves sophisticated investors, 70% enjoy managing their financial affairs. Two-thirds are satisfied with their current financial situation; fewer than one-third are willing to pay for financial advice.
• Bisexual household heads are the least likely to be very disciplined in their savings and spending decisions; almost three in five say they are spenders, not savers. Only somewhat more than one-third enjoy managing their financial affairs; the same proportion are satisfied with their current financial situation; almost half are struggling to make ends meet.
• More than half of LGBT households are uninterested in learning more about financial topics; about one in four gay household heads are interested in learning about how to minimize taxes; the same proportion of bisexual household heads are interested in learning about how to budget better.

Implications

To date, only 13 states have legalized same-sex marriage; the fact that 5 are in the Northeast, plus California, suggests that many other states will follow suit eventually. With marriage benefits available, more same-sex households might opt to comingle funds and assets or become households with children, for example. All these changes have the potential to make these households a more attractive marketing target for financial-services providers.

Gay-headed households are an especially attractive target segment for some financial institutions simply because they buy more than do other households. More social than the majority of straight-headed households, many gay-headed households go more frequently to restaurants, bars, clubs, and concerts—and they enjoy the buying experience. They want access to credit and fast access to the status of accounts. Concerned about securing a loan if necessary, they are less trustful of banks and credit unions than are all households; some may have experienced discrimination.

Investment organizations will find the wealthiest LGBT-headed households challenging because they are more likely than heterosexual households to be independent and self-reliant about savings-and-investments decisions.

One overriding factor is necessary to keep in mind when selecting offers to LGBT households and crafting communications to them. The majority are experience based—their actual experience with your products and services is every bit as important as the products and services themselves, because LGBT households' primary focus in not on finances but on living in the moment.