Many busy physicians find they don’t have the time and energy to develop a savvy financial plan for their practice or their own personal needs. That’s why they need the support and guidance of a strong financial team.
Many physicians never learned how to run a business or handle personal finances while in medical school, says Kyle O’Dell, investment advisory representative and managing partner at O’Dell, Winkfield, Roseman & Shipp, a financial advisory firm in Denver, Colorado.
“Because their professional lives are so busy, it’s essential they find someone they can turn to for financial advice and guidance so that they can continue to maintain their focus on patient care,” he says of his physician clients. “By working with an adviser, they can create a financial plan that can reap the rewards of their hard work.”
Finding the right financial adviser
O’Dell says the most important attribute to look for in any financial relationship is trust. “I would look for a fiduciary adviser who has experience working with doctors and understands the world they live and work in,” he says. “Finding a firm well-rounded enough—with the resources and experience to effectively manage your portfolio—can be a daunting task, but the decision can have a major impact on a doctor’s bottom line.”
Most advisers may claim they can handle all aspects of the financial portfolio, but O’Dell says before hiring someone, physicians should ask: Do they truly have those resources? Is it something they do every day?
Most experts agree that physicians should work with a fee-only financial adviser, because they do not receive commissions or financial incentives based on the advice they give.
Eiman Jahangir, MD, MPH, a cardiologist at the Permanente Medical Group, Santa Rosa, California, works with people he knows and has trusted for some time, although he reviews his policies every two years to ensure there aren’t any unexpected developments.
“Fee-only becomes important because then you can be comfortable that the financial adviser (or insurer) is not selling you a product just to make a profit,” Jahangir says.
Jahangir notes that physicians can use an investment calculator, such as the one on the website Physician on Fire, to see just how much it costs over time.
“A physician should start off by asking friends or colleagues for an introduction or referral to their adviser, and begin interviewing advisers until they find the right fit for their goals,” he says. “The adviser you would want to look for is someone that is both a fiduciary (charging a flat fee or receiving a cut of typically 1%) and insurance licensed. Many advisers only carry a securities license or a life insurance license.”
Other useful places to start looking for fee-only advisers, according to several physicians, are the Financial Planning Association, the National Association of Professional
Financial Advisors and XY Planning Network.