Financial advisors who specialize in working with physicians face a number of personality types, each with their own financial strengths and weaknesses. Here are a few of the most common types.
Editor's Note: This article was inspired in part by the article "Want to Know Why Your Doctor is Late? Read This" by Sanaz Majd, MD. You can read that article here.
In the infamous debacle of Dr. Tardy, we learned about the morning schedule of an incredibly caring, but stressed-out primary care physician.
One of my biggest pet peeves are pushy salespeople. In fact, I’ll go out of my way to avoid these pests. I swore I would never be one of these people.
Just like Dr. Majd, I’ve accepted that things are the way they are, but I don’t subscribe to those principles. I believe there is a better way.
Today I’m going to give you a snapshot of what a common day in the life of a typical financial advisor that focuses on physicians looks like—the shining examples and the dastardly difficult choices. In my podcast, I discuss solutions to help to minimize the issues this advisor and his clients face.
A day in the life of Mr. Well Intentioned, ABC
Here’s a typical schedule in the life of Mr. Well Intentioned who specializes in working with physicians. He’s worked hard to establish himself in the niche and has gotten familiar with the financial issues that often plague doctors and their finances. He spends a lot of time with each of his clients—at least one hour per person. His day consists of 6 clients, scheduled in one-hour time slots:
9:00am Dr. Resident Lots’ofDebt
10:00am Dr. Justwanna Havefun
11:00am Dr. Know Itall
2:00pm Dr. Nofees
3:00pm Dr. Screwed Bylastguy
4:00pm Dr. Delegator
First Client: Dr. Resident Lots’ofDebt
The first client on the schedule is brand new to the practice. She is stressed out from her schedule and is 15 minutes late.
Being low person on the totem pole, she isn’t in charge of her schedule and can barely find time to come in. As a matter of fact, she called in at the last minute and scheduled her appointment the previous day after re-scheduling 2 other times. She is eager to move forward, but is overwhelmed with all of the decisions she is facing as she is coming out of practice.
She has been completely forbearing on her loans—a total of $275,000. Interest is accruing at almost $18,700 every year! Heck, the loans will top off $300,000 at this rate in a little bit over a year. Should she start paying them back? Should she enroll in IBR or PER or anything? What debt forgiveness programs are right for her?
She wasn’t prepared for the meeting and is scrambling to get all of the information while they chat. Because she is missing so much data, she promises she’ll e-mail it before they meet next.
By the time the next client Dr. Justwanna Havefun rolls in at 10 a.m., Mr. Well Intentioned has barely collected any data after listening to Dr. Lots’ofDebts questions and concerns. He wonders when they are ever going to meet next. This meeting was hard enough to schedule!
His 11 a.m. appointment, Dr. Know Itall, called in and insists that he speak with Mr. Well Intentioned as soon as possible! He is deathly scared of losing anything and is sure that Greece is going to go bankrupt. He needs Mr. Well Intentioned to change everything right now.
He asks his assistant to call back Dr. Know Itall and assure him that nothing substantial should change over the next hour and he’ll look forward to seeing him soon.
Dr. Justwanna Havefun
Dr. Havefun is loud and boisterous, tapping his feet and laughing loudly. Dr. Havefun is a blast. He is chatty and friendly and easy to get along with. He goes on epic trips to Europe and Asia and loves talking about them and sharing pictures when they meet.
Dr. Havefun has been in practice for over 20 years and sees the light at the end of the tunnel. Yet, because he has been having so much fun, Mr. Well Intentioned knows he would burn through his money within a few years even though he has saved a good deal. It simply isn’t enough to support his long-term needs.
Dr. Havefun still has a mortgage of over $400,000. He is a giving soul and loves his family. His kids are grown—yet he is still supporting his kids to the tune of $20,000 every year! His kids are used to living the “Havefun” lifestyle and can’t seem to hold a decent job.
As a matter of fact, one of them is getting married next summer and Dr. Havefun wants to throw the biggest party ever. The big party will probably cost around $40,000. He even wants to invite Mr. Well Intentioned. Oh, and he almost forgot to mention—he’s going to take the whole family to Italy for another $40,000 this summer.
Mr. Well Intentioned cringes on the inside. He doesn’t want to stop the party, yet how can he break it to Dr. Havefun that he isn’t going to be able to retire in 10 years if he keeps this up? How can he pass on that Dr. Havefun is spending too much? He decides to put it off for another meeting and keep the meeting “fun” and “light”, updating the financial data and discussing the current strategies.
Dr. Know Itall
The meeting ends with Dr. Havefun about 15 minutes early. Mr. Well Intentioned is feeling pretty good now and takes the time to catch up with his staff and quickly pounds out some e-mails.
Suddenly the door flies open with the echoing sounds a growl and a barking cough, there’s no doubt Dr. Know Itall has arrived. He demands to see Mr. Well Intentioned immediately.
Guess those e-mails are going to have to wait…
Mr. Well Intentioned’s heart pounds against his chest. He feels a creeping nervousness climbing up his spine. He is not looking forward to this meeting. He thinks about his 6th grade English teacher that used to chew him out in front of class. Yup, that’s just like this guy.
There’s no doubt—this is one brilliant physician. He’s won awards for his research, written numerous books, and is even a sought-after speaker. However, when it comes to financial issues, Dr. Know Itall has myopic vision. He can’t see the forest beyond the tree. He loses perspective.
Dr. Know Itall is absolutely set on what he wants to do or he will find somebody else to do it.
Mr. Well Intentioned hasn’t grown a spine yet, so he caves into Dr. Know Itall’s demands. He’s a nice guy and doesn’t want to upset the apple cart even though it goes against his beliefs on the right places to be. He shrugs, “After all, it’s not my money—it’s his money.”
Yet, isn’t there a fiduciary duty? Shouldn’t Mr. Well Intentioned work to better educate Dr. Know Itall? Would it even make a difference? Could Dr. Know Itall ever change? Next thing you know, an hour and a half passes by and it’s time to move on.
After running ragged all morning, Mr. Well Intentioned is re-fueled and ready to handle his next few appointments.
Dr. Nofees arrives precisely on time. He is a stickler to detail, probably would have been an engineer in another life. He insists on being on time, all the time. He is particularly fee conscious, which is great because that’s in line with many of Mr. Well Intentioned’s beliefs, but not so great in how he acts out.
Dr. Nofees often tries to squeeze blood out of a turnip. He complains and complains about what he pays. He genuinely likes Mr. Well Intentioned and feels he gets good value from the relationship, but wants and demands more—like nothing is ever good enough for him.
Mr. Well Intentioned is completely transparent about how he gets paid and what he provides for his service. Mr. Well Intentioned wonders how someone who charges the equivalent of $1,200 per hour could complain about costs of a professional service provider who charges a fraction of the same hourly wage…
Dr. Screwed Bylastguy
Dr. Screwed Bylastguy comes strolling on in. She’s a formerly trusting, now-skeptical doc who has been burned a few times too many. She swears financial people must see a walking dollar sign when she comes into their offices.
She has been sold cruddy insurance policies and annuities and all kinds of other financial garbage. She’s just grateful she never did any business with Bernie Madoff and lost all of her hard-earned money. She probably could have retired a few years ago if not for these tragic mistakes.
She now practices “advisor allocation” and has her money spread among 3 or 4 different advisors. She is constantly comparing and contrasting one advisor versus another. Although, frankly she’s confused by this whole process and would rather just turn in her chips and hide under a rock with her money.
The last appointment of the day is the best, his favorite client, Dr. Delegator. Dr. Delegator has been in practice for about 10 years.
He has his stuff together! He is always prepared and is open to holistic advice encompassing debt, investments, and taxes. He enjoys reading financial publications, but doesn’t give them a second thought.
With their work together, he is on track to become debt-free in a few years—no more medical school loans, no more mortgage. Mr. Well Intentioned is happy to help and be part of this process.
Dr. Delegator happily off-loads and collaborates on financial decisions with Mr. Well Intentioned because the advice rings true with his own beliefs and moral base.
Despite all of these awesome things, deep inside, Mr. Well Intentioned is feeling a little guilty. Is he charging too much to this great client? Can he keep him happy? Has he done the right thing? What about this mistake and that mistake? Nagging doubts and fears swirl around Mr. Well Intentioned, threating to consume him.
This is the typical schedule for a financial advisor specializing in doctors. Yet, there are some pressing questions that we are left pondering.
How can residents and fellows find the time for financial education in the midst of a crazy, demanding schedule? Can they make it a priority and seek out help? Who can they trust?
Should doctors be told the “hard truth” when they are spending unsustainably? What’s the best way to counsel them?
When a brilliant physician decides they want to run the show, should you let them make decisions that could be harmful to their future or stand your ground and run the risk of being fired?
Is the fee model broken for financial folks? Are we worth what we charge? Would quality of care drop precipitously if we changed? Is there a premium for those that specialize in niches who know their clients in-and-out?
How can we stop the bad eggs who spoil the reputation of the profession? How can we identify the bad eggs? How can doctors feel comfortable under the care of an advisor when there is such skepticism?
Some of these answers to these maladies could be uncomfortable and unsettling. Yet, we have to try. Let me know your feedback. Explore more with me for some of my prescriptions to these very issues.
Dave Denniston, Chartered Financial Analyst (CFA), is a professional wealth manager and financial advisor located in Bloomington, MN. He is also the author of 5 Steps to Get out of Debt for Physicians, The Insurance Guide for Doctors, The Tax Reduction Prescription, and his new book, The Freedom Formula for Physicians. You can contact him at (800) 548-1820, at firstname.lastname@example.org, or visit his website at www.DavidDenniston.com/Physicians to get 3 free articles on financial issues specific to physicians.