Avoiding the “Managed Care Ripple Effect”
By Dr. David Edward Marcinko; MBA, CMP™
The healthcare industrial complex represents a large and diverse industry, and the livelihood of other synergistic professionals who advise doctors depend on it as well. These include financial planners and investment advisors who themselves wish to avoid the collateral ripple effects of the current health and managed care debacle.
Future Growth Potential in Financial Services
As a CFP, CFA, financial planner, CPA, investment advisor or general securities representative, you realize that the financial service sector is going to become the next great growth opportunity of the 21st Century.
Even H & R Block and the Charles Schwab Corporation are trying to build medical professional interest in their respective firms and compete with your independent practice. They are fervently wooing away one group or another to interface with their embryonic management, accounting or advisory programs.
For example, it has been estimated that more than one-third of the nations 60,000 accounting firms are contemplating the introduction of investment and medical management services to their business line.
Another 100,000 solo CPAs are interested in personal financial planning for their physician and lay professional clients; a survey several years ago of senior CPA partners conducted by Prince & Associates of Shelton, Conn., revealed that more than 60 percent were “highly interested” in offering investment management services, and three quarters of those said they were evaluating the best approach for their firms.
The Migration to Advisory Services
Meanwhile, more than 260,000 of the nation’s brokers are moving into the investment advisory and financial planning business because securities sales and transactions are being commoditized by the internet’s World Wide Web.
In another survey several years ago, conducted for the old International Association for Financial Planning [the older IAFP is now the Financial Planning Association, or FPA], clearly demonstrated the dominance of registered investment advisors [RIAs], over stockbrokers [regardless of nomenclature derivatives], among clients 35-49 years old.
With the average Merrill Lynch private client well over 60, and the firm and industry imploding in 2008, it’s easy to spot the future vulnerability of this business model.
Valued Industry Players
When asked to determine the added value of key industry players, baby boomers in a more recent Dalbar study ranked financial planners first, followed by stockbrokers, CPAs, mutual fund companies, insurance agents, and commercial bankers, respectively.
Even if you are a CFP® or investment adviser, and despite the proliferation of investment advisors, evidence suggests that your individual impact is still narrow.
Furthermore, a Prince & Associates study of 778 affluent individuals, each with more than 5 million dollars to invest, examined the relationship between clients and their providers of five key financial services; retirement planning, estate planning, investment management, executive benefits and health-disability insurance. Prince found that 59 percent of the clients had been serviced in only one area by a particular advisor.
Despite the significant assets of each client, the advisers have been unsuccessful at broadening these relationships — a key indicator that many affluent clients do not have a primary financial adviser.
Medical Niche Players
Among the challenges you face to broaden your influence is to offer your clients value-added services, perhaps by establishing your expertise in the medical niche and capitalize on being different; as in the Certified Medical Planner™ online health economics program of iMBA, Inc.
You must not be just another of the more than 250,000 or so individuals who claim to be financial planners, with a collective universe of an additional 700,000 or so who purport to be financial advisors, in some fashion or another. You must begin to develop the strategic competitive advantage of practice management knowledge to synergize with your existing financial service and product line.
Integration of Disciplines is Key for the Healthcare Space
Integrated practice management and financial planning will also become much more competitive among physicians because of the above professional fusions.
No one is suggesting therefore that you abandon your core financial advisory business for business management. It is merely a fact that medicine has drastically changed during the past decade, and the knowledge that you used yesterday will no longer be enough for you to get by on in the future.
Assessment
Medical practice management is the natural outgrowth of traditional financial planning services, and investment advice, in turn, is central to the implementation of a contemporary medical office business plan. The most successful physician-focused financial planners therefore, will be those who incorporate medical management services into their practices.
Disclaimer: Dr. Marcinko, a former stock broker, Certified Financial Planner and investment advisor is Founder of the Certified Medial Planner™ program for all fiduciary consultants in health economics, finance and medical practice management www.CertifiedMedicalPlanner.com
Conclusion
Your thoughts are appreciated; please opine?
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
Physician Advisors: www.CertifiedMedicalPlanner.com
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: www.stpub.com/pubs/authors/MARCINKO.htm
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