What is the Role of a Physician-Focused Financial Advisor?

Changing Times – Demand Changing Roles

By Dr. David Edward Marcinko MBA, CMP™

Editor-in-Chief

www.HealthcareFinancials.com

As a financial advisor for more than 15 years, it has been my experience that many doctors who require assistance in developing a comprehensive personal financial plan also need help with implementing any investment planning recommendations. While perhaps not so true before the “flash-crash” of 2008-09, the issue seems especially true today as retirement portfolios have been decimated, and the specter of healthcare reform is no longer just a threat but a political reality. The mindset of hubris has been replaced by a tone of fear in many medical colleagues.

The Financial Advisors

Physician investors who develop an investment plan may use a competent financial advisor [FA] or other specialist in the investment area. A financial advisor can help clients understand their current financial situations and develop strategies for achieving their goals. Other FAs are specialists that help clients design and implement plans for investing. Still others use a more comprehensive approach to the entire financial planning process with extreme degrees of healthcare specificity

www.CertifiedMedicalPlanner.com

These Certified Medical Planners™ are fiduciaries at all times and put client needs first as registered investment advisors [RIAs], not commissioned sales agents or mere stock-brokers despite often confusing monikers.

Implementation

Implementation may be accomplished using professionally managed portfolios and mutual funds. The following shows how a plan may be implemented with an advisor assisting the physician-investor. The process may include:

• Developing investment policy and strategies

• Selecting and implementing managed portfolios and mutual funds

• Evaluating performance on a periodic basis

• Periodically reviewing and adjusting the investment plan as required

Note: The advisor may provide all of the investment services, or the physician investor may use other advisors in the process.

Example: 

A financial planner has developed a number of financial planning recommendations for a client. One recommendation is to develop a written investment plan, review current investments, and implement changes. The planner has recommended an investment advisor experienced in selecting and monitoring managed portfolios and mutual funds. The financial planner will meet with the client and advisor initially and once each year to monitor the plan.

Example: 

A financial planner has developed a financial plan for a client. The financial planner specializes in developing investment policy but not in implementing investments. The financial planner will use asset allocation software and develop a written long-term plan for the client. The doctor-client will work with a major brokerage firm to implement the plan using managed portfolios and mutual funds. The financial planner will monitor the brokerage firm and help the client evaluate performance.

Example:

A financial planner has developed a financial plan for a physician-client and will assist the client in developing asset allocation strategies. The planner has extensive knowledge in implementing the asset allocation strategies using managed portfolios and mutual funds. The planner will select and monitor the choices. The planner will provide the client with a quarterly performance report and meet with the client every six months to review the plan and strategies.

Assessment

Understanding the above is more critical than ever as physician-income continues to shrink going forward in the era of healthcare reform.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Do you seek professional assistance with your investing needs, or do you go-it-alone; why or why not? Then, subscribe to the ME-P. It is fast, free and secure.

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On Dental Economics and Truth in Advertising

About Dentistry iQ

D. Kellus Pruitt DDS

I just read a misleading press release on Dental Economics subsidiary Dentistry iQ that is presented as a credible article titled “Guardian Recognized as One of the Nation’s Leading Dental Carriers by Benefits Selling Magazine Readers” (no byline).

http://www.dentistryiq.com/index/display/news-display/1307102704.html

“NEW YORK, Nov. 19, 2010 (GLOBE NEWSWIRE) — The Guardian Life Insurance Company of America (Guardian), one of the largest mutual life insurers and a leading provider of employee benefits, today announced that it has been recognized by the readers of Benefits Selling magazine as one of the nation’s leading dental insurance carriers for the second consecutive year…”

My Research 

I did some quick research on Guardian’s discount dentistry plans and I have some questions for Dental Economics Vice President Lyle Hoyt – the official who approved the advertisement deal (as far as anyone can tell). First of all, how come at least 19 out of the 25 Austin, Texas dentists listed in their DentalGuard Preferred Provider list work for “clinics”? 12 of them work for Castle Dental.

http://www.geoaccess.com/guardian/po56/DisplayResults.asp

It took me 3 minutes to come up with this information. I ask you, Lyle, did you do any fact checking before you took Guardian’s money? I also glanced at Guardian’s PPO lists from other cities with the same result – If one purchases DentalGuard, one should be prepared for McDentist.

My Bias 

But maybe I judge Castle Dental too harshly. After all, I am admittedly biased. To me, a name on the door of a business connotes accountability backed up by transparency and a suggestion of permanence. Guardian officials should know that their clients don’t like to change dentists, so why are so many of them sent to Castle – 12 months per contract period? And how good of a job is Castle doing? So, I checked the Austin Better Business Bureau to see if Castle Dental has a history with them. Indeed they do! Of the 5 encounters Castle Dental has had with the Austin BBB, they were awarded grades of 3 Bs and 2 Fs.

http://austin.bbb.org/Find-Business-Reviews/

If Castle Dental’s dentists had college grades like that, they would have never made it to dental school. Although, if they lived in New Mexico, I hear one can do discount dentistry as a dental therapists with little more than a high school education … sorry. I digress.

The Advertisement 

The ad for Guardian’s discount dentistry continues: “Benefit Selling’s readership of 55,000 benefits brokers voted Guardian as one of the top dental carriers in the 2010 Readers’ Choice Awards, which were announced in the magazine’s November issue. With more than 70,000 dentists, Guardian boasts one of the largest dental networks in the country and was cited by one participant as ‘the most innovative carrier for dental and a great partner for all ancillary products from life to DI and vision.’”

So Guardian is both “Innovative” and “a great partner” in dentistry? Really-Lyle? Those who stand to profit from dental therapists in New Mexico say the same things – based on an experiment in Alaska that involved 5 therapists and 300 patients … Sorry. There I go again.

My Business Policy Interpretation  

Please allow me to share my interpretation of Dental Economics business policy: If it’s a paid ad with no byline and no opportunity for troublemakers to comment – thus protecting Dental Economics VP Lyle Hoyt – nobody spends any effort checking for misleading and harmful information their bosses promote. After all, even if someone were to demand personal accountability from an online publisher like Dental Economics, what harm could they possibly do to such a well-established news outlet’s credibility? Let’s just see.

Assessment 

I know Dental Economics has to make money somehow, but you should show more respect to dentists and more compassion for dental patients, Lyle Hoyt.

Conclusion

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