Wall Street Banks Come Out in Support Gay Employees

Photo: Todd SearsPlayHandout
WATCH Is There a Shot to Cure Homophobia?

Todd Sears had been openly gay as a student at Duke University in Durham, N.C. So he didn't expect the need to be secretive about being "out" after he graduated in 1998 to work on Wall Street.

But soon after he started his entry-level job as a financial analyst for an investment bank, he heard someone at a nearby desk say a derogatory word toward gays.

He soon learned the traditional Wall Street work environment, with its stereotypically rigid culture, was anything but welcoming to the lesbian, gay, bisexual and transgender (LGBT) community.

After eventually joining Merrill Lynch, Sears, 35, said, he conceived of the idea of gathering the major Wall Street banks in an event for the LGBT community.

This week, 10 years after Sears first had the idea, Bank of America Merrill Lynch, Barclays, Citi, Deutsche Bank, Goldman Sachs and Morgan Stanley participated in the inaugural Out on the Street LGBT Leadership Summit in New York.

"My goal was to hear experiences from senior business leaders, who are on the front lines with clients at these banks, and to have open and honest discussions about how Wall Street can continue to improve," Sears, now principal of Coda Leadership Consulting LLC and founding chair of the fashion benefit, Jeffrey Fashion Cares, said.

"I also wanted to shed light on some of the amazing commitment of these six banks to the LGBT community, because that's not always a story that is told."

Seth Waugh, chief executive of Deutsche Bank Americas, said his firm had at least two reasons to participate in the summit.

First, it wants to "make sure Wall Street is an attractive place for all people," Waugh said in his welcome remarks.

He said the second motivation was "commercial," alluding to LGBT clientele of financial services.

The LGBT community is about 5 to 10 percent of the U.S. population, according to the National Gay and Lesbian Task Force. Census data also show that the LGBT community is generally more educated than the average U.S. population, according to Brad Sears, executive director of the Williams Institute on Sexual Orientation Law at UCLA and no relation to Todd Sears.

Employees Who Are 'Out' Are More Productive

The buying power of the LGBT community in 2010 was estimated at $743 billion, up from $732 billion in 2009, according to Packaged Facts and Witeck-Combs Communications.

The Out on the Street event at Deutsche Bank Wednesday was invitation-only for executives in the financial services industry who are at the "vice president level and above" and employees of the hosting banks. With an expected capacity of 125 attendees, more than 170 people attended the event, with a waiting list of more than 50 people.

The participating banks together have a market capitalization of about $449 billion and 889,000 employees globally, Sears said during the conference.

"My vision for this event is that it's annual, with the hosting banks rotating each year," Sears told ABC News, adding that while all the banks expressed a "strong interest" in hosting for 2012, Bank of America Merrill Lynch will be next year's host.

"Having said that, I think there will be interim events and gatherings, because this group is too passionate and engaged to wait a full 12 months."

With President Obama's repeal of the military's "don't ask, don't tell" policy in December and headlines about the prevalence of bullying LGBT youth, workplaces across the country have varying levels of acceptance of its LGBT staff and clientele.

But research has shown that LGBT employees who are "out" are more productive and satisfied with their job, and more likely to remain in their positions than those who hide their sexual orientation, said Sylvia Ann Hewlett, director of the Center for Work-Life Policy.

Being "in the closet," can lead to "isolation and disengagement," Hewlett said at the summit.

Selisse Berry, founding executive director of the nonprofit Out and Equal Workplace Advocates in San Francisco, said she founded the organization because people are their most productive and satisfied at work when they can bring all of themselves to the job.

"Discrimination is bad for business and that's why so many of the Fortune 500 companies have non-discrimination policies that cover sexual orientation [87 percent] and gender identity [43 percent]. And those numbers keep steadily rising," Berry said.

'Unique' Financial Needs of LGBT Community

When he had the idea for the summit 10 years ago, he wasn't quite sure it would work at the time. Homosexuality was an especially politically charged topic in 2000, in part, because Vermont had recently become the first state to introduce civil unions.

Now, a number of senior Wall Street executives are "out" and several of the major banks have staff that target LGBT clientele.

Bill Moran, a vice president at Merrill Lynch Private Wealth Management, said the LGBT has relatively more "unique needs" than other affinity groups, such as ethnic or other demographic groups, because of their the complicated and varying legal status of LGBT couples and families.

Sears, along with retired Gen. Colin Powell, also started the first Veteran's Network on Wall Street while at Credit Suisse.

Berry said same-gender married couples are denied tax breaks that heterosexual couples enjoy, and are taxed on the benefits their domestic partners receive. Out and Equal co-sponsored with Google this week a seminar for human resource professionals to close the income gap and bring equity in pay.

Moran is also director of Merrill Lynch's nationwide LGBT Financial Services team, the first such team on Wall Street that Sears established several years ago. Several other banks now have LGBT networks, including Deutsche Bank's "Rainbow Group."

Moran helps train other wealth advisers, many who are straight, to better serve his LGBT clientele.

"We have two straight wealth advisors in Dallas who own the market," Moran said at the summit.

But there is also a danger in stereotyping or clumping together any affinity group.

Brian McNaught, called "the godfather of gay sensitivity training" by the New York Times, said he hated the abbreviation, LGBT.

McNaught moderated a panel at the summit called, "Wall Street as a Workplace of Choice: Culture."

He said he instead prefers using the non-abbreviated words: lesbian, gay, bisexual, and transgendered.

"You should never use an acronym with people," said McNaught, president of Brian McNaught & Associates.

The speakers at the conference were not just from the LGBT community. A large number were "several senior straight allies" who are trying to recruit and support the LGBT community at their workplaces, according to Sears.

'Senior Straight Allies'

"To me, the most amazing stories of the day came from straight allies, who are often overlooked in the struggle for LGBT inclusion," Sears said. "Several senior straight allies shared stories of gay children, gay siblings and how important this topic is to them as well on a personal level.

"How to better include and leverage their passion and energy was truly a great takeaway and something we will explore in discussions to come."

One such ally at the conference was an executive at Morgan Stanley who shared about the recent experience of having her 15-year-old daughter come "out" to her.

After learning that, she acknowledged, she had initiated "awkward conversations" with gay colleagues to try to learn how to become a better mother to her daughter.

Not only did she want her daughter to be true to herself but, she said, "we need our LGBT leaders to be authentic leaders."