How one advisor helps same-sex couples

Elizabeth Hurly is an associate financial advisor at Raymond James Financial Planning Ltd. About one-third of her clients are part of the LGBTQ community. The rest are business executives, many of whom are women.

Prior to last June’s U.S. Supreme Court ruling that legalized gay marriage nationally, many Americans had to come to Canada to wed their same-sex spouses.

For Elizabeth Hurly, this meant helping these couples deal with complex cross-border strategies.

“A lot of Americans married Canadians because marriage was legal up here,” says Hurly, an associate financial advisor at Raymond James Financial Planning Ltd. in Toronto.

“That’s different now with the demise of DOMA [the Defense of Marriage Act, which was ruled unconstitutional]. But [my firm’s] platform allows us to hold registered Canadian assets and open U.S. IRAs and non-registered U.S. accounts.”

It’s due to this platform that she still gets referrals from U.S. accountants and lawyers who want to help their clients. And, as members of the LGBTQ community, Hurly and her business partner Bernardine Perreira appreciate the sensitivities, concerns and needs of this client base.

For instance, a retired female couple that married in Canada in 2005 (when same-sex marriage first became legal here) was having complex U.S. estate tax issues. One partner is American and the other Canadian.

Hurly sits in front of a mural celebrating the history of LGBTQ activism in the Church-Wellesley neighbourhood of Toronto. It was designed by John Kuna for the 2014 World Pride Festival and completed by Christiano De Araujo.

“We put together a cross-border tax team and had their wills modified,” says Hurly, who became a registered representative with FINRA in December 2015. The U.S. spouse had more assets, so “they would’ve been facing a [combined U.S. and Canadian] tax bill close to $1 million.”

To reduce that burden, “we had them take advantage of [the] U.S. spousal-giving allowance, which is $145,000 a year that you can gift to your spouse without incurring taxes. If we can shift money away every year from the America citizen and put it into the Canadian’s hands, it saves over time.”

Hurly also investigated whether the American spouse should get life insurance so the Canadian could cover any U.S. estate or tax bills if her partner died first.

But the couple’s portfolio was worth millions, and included RRSPs, IRAs, annuities, pensions and properties on both sides of the border. They decided the surviving spouse would cash out investments if needed, instead of purchasing insurance.

Hurly and Perreira are now helping the couple sell a New York-based multi-unit property. Since the clients live in Toronto, they’ve decided they no longer want to pay the holding costs. “We’re looking at whether they can use the money from the sale to invest and make a comparable return,” she says. “And if they sell before death, it’ll avoid further tax complications.”

The path to specializing

After working as an institutional manager for more than two decades, Hurly made the jump to retail in 2009. Offering her services to the LGBTQ community came naturally.

“I used to be co-chair of Community One Foundation,” says Hurly. “I’m also a member of the Metropolitan Community Church and belong to exeQutive, which is an LGBTQ group for executives.”

She adds, “A lot of my [first] clients were from the LGBTQ community. Some were friends, some were acquaintances, and some were people I met at events.”

And, because the community is so close-knit, she recommends advisors who want to break into the niche to get involved with it. “Volunteer, because you need to show interest in helping out. Align yourself with other professionals by attending fundraisers and networking.”

Hurly adds that she’s not a fan of hard sells at events. “I like to find out about people and what their story is. If I’m speaking to them [and] they say, ‘I’m thinking of retiring but not sure if I can,’ then I say, ‘I’m actually a financial advisor, so if you want to come see me, I can help.’ ”

Also, it was during these networking opportunities that Hurly would bump into Perreira (See “Advisors without borders,” AE October 2015).

“We’ve [been] acquaintances for probably 20 years,” she says. “Bernardine first mentioned partnering five years ago, but I didn’t give it much thought and declined.”

When Perreira approached her again in January 2015, Hurly considered the long term: they were both going after the same niche. Plus, working at an advisory firm, instead of the bank she was then at, fit in with her goals.

So they decided to join forces, and Hurly moved to Raymond James. The transition took one month, during which they combined books.

Each brought about 30 clients to their joint business. Every new client is shared.

Hurly’s experience in portfolio management and investments, and Perreira’s expertise in planning and working with centres of influence, has given them complementary strengths, she adds. “Our business is really growing. We’re probably signing four new clients a month. Some are referrals from lawyers and accountants who are also in the LGBTQ community, and whose clients are LGBTQ; so they feel very comfortable referring to us.”

Taking on new clients

During first meetings, the key is to learn about a client’s concerns. She’ll ask: What are your goals? What are your triumphs? What are you most afraid of?

Many of their clients are age 45 and up. Typically, one of their biggest concerns is having combined assets after marriage. “At one point in the LGBTQ community, it didn’t matter if you had a relationship and lived together because [the union] wasn’t recognized,” says Hurly. “Now that things are recognized, you fall under common-law or married, and you’re at risk of losing assets if something happens.”

So Hurly strongly recommends a marriage agreement (or cohabitation agreement for common-law spouses). “If I have a client who’s getting into a new relationship, and because she’s a little older in life, she tends to have more assets […] so it’s important to protect her.” Sometimes she gets a bit of pushback, but Hurly isn’t afraid to push back as well. “I say, ‘We’re just doing this in your best interest.’ We have seen people who have lost significant amounts of money because they’ve hooked up with the wrong person. That can happen if you’re straight or gay [so we recommend it for all couples].”