Why Working With Strippers Makes Sense for Financial Planners

Q&A February 14, 2022 at 03:17 PM

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Who is giving sex workers solid financial advice about all the money they earn?

Not many financial advisors.

And that could be a big missed opportunity: "There's value to working with stigmatized groups and in markets that aren't overly saturated," argues Lindsey Swanson, founder of Stripper Financial Planning, whose clientele is exclusively sex workers, in an interview with ThinkAdvisor.

"There are millions of people doing sex work who need financial advice and aren't getting it," she says.

The fee-only certified financial planner, who charges a monthly flat fee of $350, plans for her clients "as if they're athletes," she explains.

Both groups typically have short-lived primary careers because demand for their services is greatest and revenue highest when they're in their 20s and 30s.

In addition to prostitutes, sex workers include people in the adult entertainment industry, such as strippers, actors and pornography creators; escorts; sugar babies — that is, paid sexual companions — and more.

Swanson's clients are all of the above — and all working legally. The majority are female or "female-presenting," as she puts it. Her clientele comprises gay, transgender and nonbinary people, and straight men, too.

For Swanson to acquire a prostitute as a client, they must work where prostitution is legal; in the U.S., that means only the state of Nevada.

In the interview, Swanson relates that when sex workers initially come to her, most are new to the concept of financial planning in general, much less tax planning, estate planning and investing.

The CFP, 29, covers all those aspects, plus the importance of accurately reporting income, which, she stresses, is critical for claiming Social Security later on.

The RIA also makes sure clients track every work-related expense allowable for tax deductions; and she informs them of ways to reduce taxable income, such as establishing an Individual 401(k) plan or an IRA.

After four years of employment as an investment analyst and financial advisor at traditional financial services firms, including Relevé Financial Group and TCI Wealth Advisors, Swanson opened her own virtual-only practice in 2020 for "people who are being discriminated against," she says.

Clients were largely in the highly profitable cannabis industry in Northern California.

The following year, she narrowed her niche to sex workers, many of whom she'd met through clients, and changed her firm's name from Shelter Cove Financial to one specific to sex workers so that prospects would feel comfortable approaching her.

Much of Swanson's focus is helping clients once they start aging out of sex work — because of its physical requirements and demands — to shift to an allied job in the industry, such as coaching.

But some clients use the money they've salted away to enter a totally different business, like fashion; many attend school to become nurses, according to Swanson.

Not surprisingly, the advisor, whose podcast sports the double-entendre title "A Scoop of Vanilla," has run into issues with a number of business contacts. Given her firm's focus, they no longer want to be "associated" with Swanson because they fear offending their "conservative clients."

But Swanson forecasts that in the future, it will be "pretty normal" for people in financial services to work with sex workers because "there's profit to be made there," she says.

ThinkAdvisor recently interviewed Swanson by phone from her base in a coastal town in Humboldt County, California.

Here are highlights of our conversation:

THINKADVISOR: Why did you start Stripper Financial Planning?

LINDSEY SWANSON: Market demand. A lot of advisors and CPAs stay away from people in sex work because it's a gray area: They don't want to have to dig into what's legal and what's not.

I'm legitimizing something that exists legally but that people don't talk about publicly.

Do sex workers think they need financial advice?

A lot of them have a hard time talking to professionals because their work is stigmatized.

So there's no one for them to ask about things like taxes. So they aren't taking advantage of tax deductions because they don't want to be on the radar even if what they're doing is legal.

What does "sex work" encompass?

It's a wide spectrum and includes creators — like people working on OnlyFans [platform focused on creating pornographic content], strippers, escorts, sugar babies.

It's the porn industry in general. So I also work with actors and models in adult films.

Why would a sugar baby have need for a financial advisor?

A lot of sex workers don't have friends or family they can ask about their finances.

So if a 19-year-old [sugar baby] has a 50-year-old boyfriend that [pays] her X amount each month and she's spending it willy-nilly, she needs someone to say, "It's cool that he offered to buy you a Range Rover, but what if you asked him to pay your school tuition instead?"

Does your clientele include prostitutes?

Absolutely. But they have to do it legally.

In places where it's not legal, sex work looks like a lot of different things, such as escorting or being a paid girlfriend.

Why did you choose the sex worker client niche?

I had a history of working for traditional firms with older, retired clients that had millions of dollars.

[For my own firm], I wanted to work with stigmatized folks who weren't being served, and I was open to who that would be.

Do you create financial plans for clients?

I do comprehensive financial planning. We look at the big picture: Maybe you're making more than you would at an office job; but after you're paid, what does your profit actually look like?

The majority of sex workers are self-employed. They're reporting their income from multiple sources and have variable revenue.

How often do you have one-on-one meetings?

Every month, walking them through 12 different topics that cover the entire financial picture.

What do you do for them in the area of tax planning?

I tell them that throughout the year, they need to track how much they're making and from which sources, so they know how much to set aside to pay estimated quarterly taxes.

If they get cash tips, they need to keep track of those. The IRS requires a daily log. And they need to track all their expenses by the job.

Can they take tax deductions for, say, special clothing or such?

If it's specific to the job, like if you're a stripper and buy a wig for the sole purpose of wearing it in a club, or buy sex toys for creating a video.

If you bought a dildo for that, you could deduct it. It's like needing something for your office.

Like a stapler.

Yeah, like a stapler.

What if a client feels they can't prepare their income tax returns on their own?

I refer them to CPAs that are either sex workers or sex worker-friendly.

That's because if you're talking to a CPA who you're uncomfortable with, you're probably not going to ask if you can deduct for dildoes.

Please tell me more about CPAs who are also sex workers.

Lots of times people want to go into law or become a CPA but don't have the finances to fund college.

So [to earn money], they become strippers, or they do OnlyFans, which has a million creators. There are lots of people making porn online.

To what extent do you discuss 401(k) plans and IRAs with your clients?

I really get into the nitty-gritty of sex workers needing to make sure their business is profitable after paying taxes and expenses — and how they can reduce taxable income by putting it into an i401k [individual 401(k)] or an IRA.

Do you get into health care?

I tell them that having the attitude of "I hope I don't break my arm, but [everything will be] OK if I do," is a good way to completely derail your financial health.

So we try to figure out health care [insurance] options.

I'm not motivated to sell insurance, but [I make clients aware of the importance] of it should an emergency come up and they don't have a safety net, like a parent who can pay for their medical care.

They need to create their own stability.

Do you talk about Social Security?

We discuss the need to accurately report income because that's going to benefit them later when they're taking Social Security.

Usually they're creating some sort of nest egg during their 20s and 30s. Sometimes that's in an i401(k) or a SEP IRA account.

How long, on average, is sex work sustainable as the sole source of income? Can it be counted on long term?

Assuming it [can't be], many sex workers turn it into something that will be. The demand for sex work is for people in their 20s and 30s.

I plan for them as if they're athletes because they're very similar [highest earning years limited to their youth].

Some of my clients are reaching 35, and the demand isn't what it once was.

What do they transition to that will be a long-term revenue producer?

If you're a stripper, say, it might mean moving away from in-person sex work and into coaching other sex workers.

Usually, people transition into a different type of job that's related to sex work but that doesn't have as much physical and mental strain.

Depending on how financially savvy they are, they can use [their savings] to pursue a different career.

A lot of sex workers are paying for nursing school and becoming nurses.

You have a CFP certification and were an advisor and analyst for a number of years. To what extent do you invest your clients' money?

Investing is absolutely something I touch on, but it's usually [just recommending] and helping to set up a robo account at Charles Schwab, which I audit for them and see if it makes sense for their current goals.

They either have pretty simple investments they want to do on their own, or investing isn't a large part of their financial picture.

Why don't you handle their investing?

I don't [want] to charge X amount of a fee for doing that.

The AUM managing structure is a little classist. The majority of my clients are younger and don't have like, a $3 million nest egg they want managed.

I didn't want to have minimums. That's why I charge on a subscription model.

What inspired you to specialize in sex workers?

I live in the Emerald Triangle [region] in Humboldt County, California. The weed industry here is very strong. A lot of people work in cannabis, and there's a lot of money in it, which drives certain groups of people, especially sex workers.

Both [groups] tend to be in the same gray area of society — making a lot of money but not necessarily always being respected by normal businesses.

So they tend to interact. Just being here, I've interacted naturally with quite a few sex workers and was open to working with them.

How have people, in general, responded to your firm?

I'm getting a lot of positive response even from people who aren't sex workers but who are appreciative of what I'm doing because there's a lack of service in that area and lack of respect from professionals.

You've told me that some professional also stigmatize you because you're advising sex workers. How are you coping with that?

I'm not doing sex work. I'm just publicly associating with them — and I'm getting a backlash.

[The subject of] sex work makes people feel uncomfortable.

Do you think that judgmental attitude will change?

Sex work isn't going away. I want it to exist safely, and I want to be a part of it [as a financial advisor].

What's your advice to other advisors who might want to develop the sex worker niche?

There's value in working with stigmatized groups and in markets that are not overly saturated.

We know how to make money off the AUM model, but there are millions of people doing sex work who need financial advice and aren't getting it.

If you create a safe place, there's going to be demand because sex workers are making money and need financial help.

Why did you want to start your own company?

The majority of financial firms I worked at were very old school, conservative; and there was a lot of nepotism. It was hard to move up and have a voice. There was a lot of discrimination.

I wanted to push against a lot of things, but I was told that I didn't have control because my "name wasn't on the building."

In the last few years, I'd been wanting to [serve] people who were discriminated against.

What's your outlook for the sex worker specialty for FAs?

I expect it to be pretty normal for people in the future to work with sex workers. And to be doing it publicly, realizing that there's profit to be made and that the world doesn't end once you're associated with sex workers.

A lot of people will start firms working with them because there's a market there.