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  • David E. Marcinko [Editor-in-Chief]

    As a former Dean and appointed University Professor and Endowed Department Chair, Dr. David Edward Marcinko MBA was a NYSE broker and investment banker for a decade who was respected for his unique perspectives, balanced contrarian thinking and measured judgment to influence key decision makers in strategic education, health economics, finance, investing and public policy management.

    Dr. Marcinko is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; as well as Oglethorpe University and Emory University in Georgia, the Atlanta Hospital & Medical Center; Kellogg-Keller Graduate School of Business and Management in Chicago, and the Aachen City University Hospital, Koln-Germany. He became one of the most innovative global thought leaders in medical business entrepreneurship today by leveraging and adding value with strategies to grow revenues and EBITDA while reducing non-essential expenditures and improving dated operational in-efficiencies.

    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. David E. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics trade journals and publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    Later, Dr. Marcinko was a vital and recruited BOD  member of several innovative companies like Physicians Nexus, First Global Financial Advisors and the Physician Services Group Inc; as well as mentor and coach for Deloitte-Touche and other start-up firms in Silicon Valley, CA.

    As a state licensed life, P&C and health insurance agent; and dual SEC registered investment advisor and representative, Marcinko was Founding Dean of the fiduciary and niche focused CERTIFIED MEDICAL PLANNER® chartered professional designation education program; as well as Chief Editor of the three print format HEALTH DICTIONARY SERIES® and online Wiki Project.

    Dr. David E. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA, FPA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”.

    Marcinko is “ex-officio” and R&D Scholar-on-Sabbatical for iMBA, Inc. who was recently appointed to the MedBlob® [military encrypted medical data warehouse and health information exchange] Advisory Board.

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New “Physician-Focused” Financial Planning Book Reviewers Needed

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Discerning the “Best Emerging Practices” in Financial Planning for Doctors and Health Professionals

http://www.CertifiedMedicalPlanner.org

By Ann Miller RN MHA AdviceforDoctors@Outlook.com

[ME-P Executive Director]

The Medical Executive-Post occasionally fact-checks and codifies the posts and comments of our readers, subscribers and other experts in order to present them in book form. This is a form of academic, or cognitive, crowd-sourcing. It might also be called a form of private Wikipedia styled information gathering. We may use it to create new books, up-date prior books, or fill in the gaps of books-in-progress.

Book Reviewers  

And so, we are requesting informed [MD-DO-DDSs] doctors and [FA, CFP, CPA, CMP, PhD, CFA or MBA] related folks, or other knowledgeable readers and subscribers to review the Table of Contents of our current project, now under review. We wish to ensure no important topics of interest are omitted for modernity. Editorial writing and assistance will be provided.

www.CertifiedMedicalPlanner.org

Our ME-P Book Review Format:

An easy to follow, and typical book review format, usually starts with the preliminaries such as stating the title of the book, its author, place of publication, publisher, date of publication, and the number of pages. This is completed by us.

What follows next is the making of an introduction to at least give the readers a preview of the review. It is sometimes followed by background information of the book in order to set out criteria in judging a book.

This includes the author’s basic information such as the era in which he wrote the book, or how it relates to his life experience.

Then it is followed by writing a short summary of the content or text of a novel, history book, or any other type of book.

Testimonials, Too!

Crafting a brief, 2-3 sentence, informal testimonial is also needed.

Books

Assessment

This is highly confidential peer-reviewed styled publishing; do not disclose material. MarcinkoAdvisors@msn.com

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

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How to Become A Financial Advisor [Learned Profession or Professional Sales Force?]

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A Recent E-mail that I Received

By Dr. David Edward Marcinko MBA, CMP™

www.CertifiedMedicalPlanner.com

[Editor-in-Chief]

As a former certified financial planner for almost 15 years, I was surprised to recently receive the following unedited e-mail correspondence.

Dear Marcinko,

If you are clever, have a way with people, or are a born salesperson, then becoming financial advisor could be your ticket to paradise.

Maybe not exactly paradise, but you could definitely have a ticket to a rewarding career. If you’re thinking about starting out as a new financial advisor – you may already be half the way there.

Why?

Because it’s an occupation where your life challenges will give you the understanding and empathy needed to work with your clients. Have you ever been in the position where you had to figure out a budget for your children’s education? Or manage an over extended credit card? These life situations will aid an individual on the path to become a financial consultant.

Requirements to Be a Financial Advisor

Even though a formal education is not a necessity to become financial adviser, it helps if you’ve taken certain courses.

What degree do you need to become a financial advisor? A bachelor’s degree in Finance, Economics, Accounting, Commerce, Business or Marketing would be a good start. A degree won’t assure you of a startling career but it may help get your foot in the door.

Rumor has it that a degree in psychology is also an asset as financial advising is as much about counseling as it is about advising. There are a plethora of people with all sorts of emotional entanglements around their financial lives.

Licenses

So, what licenses do you need to be a financial advisor? Some companies will assist a newbie in the financial advisory business and place them into a special program that will help them to obtain the required regulatory licenses such as a Series 66, this license permits them to vend annuities and mutual funds. It’s also possible to manage your own training. You can take part-time courses in order to qualify for the CFP (Certified Financial Planner) exam.

There are roughly over 286 universities and colleges that will assist you in preparing for the CFP exam. How long does it take to become a financial advisor? In order to qualify for the exam you will also need three years full-time working experience with a financial planning establishment.

Statistics state that over 40% regularly fail this all important exam. Its worth the time and effort as with this certification you are deemed as a certified financial planner and demand a higher salary.

Assessment

Hot tip: Stay away from insurance companies for financial employment. They’ll insist that you sign everyone including the dog and your grandmother. Then get rid of you if you don’t procure sufficient business. Banks are better they will bring in the clients for you.

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. Are financial advisors true professionals; or a truely professional sales force?

Please review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure. Are financial advisors true professionals, or a professional sales force?

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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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.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

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On American Health Care and Financial Services Competitiveness

A MEMORIAL DAY OPINION – EDITORIAL

[Innovation – Not Nationalization – Can Again Lead]

By Dr. David Edward Marcinko; FACFAS, MBA, CPHQ, CMP™

[Publisher-in-Chief]

By Hope Rachel Hetico; RN, MHA, CPHQ, CMP™

[Managing Editor]

Ann Miller; RN, MHA

[Executive-Director]

American Flag

On this 2010 Memorial Day weekend, please allow us to directly reflect for a moment on the decline of the healthcare, banking and financial services industry in America. And; then somewhat indirectly comment on the hopeful emergence of the web 2.0 phenomena of which we all are a part. The competitive applicability to these sectors should be appreciated by the insightful ME-P reader.

Collapse of Command and Control Monopolies and Oligarchies   

Old monopolies everywhere are crumbling because of tougher new competitors and the transparency wrought by electronic connectedness. For example, our old newspaper has to compete with the internet, your electric utility company battles low-cost local start-ups, telephone companies must begin installing fiber optic lines to fend off cable companies; and RIAs and fiduciary focused financial advisors [FAs] will supplant BDs and stock brokers in the financial services sector.

www.CertifiedMedicalPlanner.com

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The airline industry collapsed a few years ago, the banking industry has just collapsed, and the auto industry is recovering as we pen this post. [We have a particular affinity for the auto sector however, as the son of a UAW member and step-daughter of Michiganders]. Regardless, the rush to more intense competition cannot be stopped. As a doctor, FA or other business competitor; you either keep pace or get crushed by quasi-oligarchic organizations like the American Medical Association [AMA], American Podiatric Medical Association [FPMA], American Dental Association [ADA], American Osteopathic Medical Association AOMA], Financial Planning Association [FPA], Certified Financial Planner Board of Standards [CFP BoS], College for Financial Planning [CFP] or the National Association of Personal Financial Advisors [NAPFA], etc. What have they, and Wall Street, done for you … lately? Scandal, taint, doubt, lost-credibility, a business-as-usual ennui, lethargy and ruin! Enter www.Sermo.com

Link: https://healthcarefinancials.wordpress.com/2009/04/19/calling-for-cfp%c2%ae-fiduciary-status-real-education-and-higher-duty/#comment-4136

Health Insurance Companies

In the last-generation of health insurance companies and related fraternal medical organizations, patients exercised great control over physician selection, had quicker access to specialists and encountered fewer restrictions on care. The reverse was true with financial services. But, because of advancing technology, aging demographics, intense R&D, global manufacturing, and escalating domestic HR costs – competitive market forces against traditional and structured staff model managed care companies – many industry analysts [like us] predicted growth would decline [Yes, greed was also involved as healthcare was presumed a recession-proof sector; and didn’t we all own behemoth big-pharma and HMO stocks in our 401-K, and 403-B plans]? But now, many former stock-brokers and FAs are going rogue; er – independent!

“Although inefficiencies in any business often open up in the short term, and can be greatly exploited by creative and visionary entrepreneurs – as in most business structures – market forces will prevail in the long run”.

Leo F. Mullin, MBA

[Former CEO – Delta Airlines]Shadows

Next-Gen with “Fly”

Fortunately, a new generation of enlightened physician and FA entrepreneurs is coming “out-of-the-shadows” as new-wave web 2.0 corporations and RIAs are becoming more flexible, competitive and market responsive. Simultaneously, monolithic and collectivist political ideas keep trying to regulate the medical and financial services workplace with rules, regulations and contracts to control entire populations. Yet, in the new healthcare economy, this new generation of doctors and FAs with “fly,” is headed toward more competition; not less – with more collaboration with patients and clients – regaining self autonomy.

Physician and FA Advocates

Meanwhile, as medical professionals, FAs and patient advocates, we must all choose between staying flexible to ride out tough times – or – adopting a hard, brittle line that will crack under the pressure of competition. We know where we stand at the ME-P, do you?

Flexibility and Virtual Reality

In recent years, many large corporations and top-down business models were not market responsive and change was not inherent in their DNA. These traditional organizations represented a rigid or “used-to-be” mentality, not a flexible or “wanna-be” mindset; according to business columnist Alan Webber. Some financial advisory corporations, and today’s emerging health 2.0 initiatives, may possess the market nimbleness that cannot be recreated in a controlled or collectivist [nationalistic] environment. And so, going forward, it is not difficult to imagine the following new rules for the new financial and virtual medical ecosystem.

[A] Rule No. 1

Forget about “SEC suitability and FINRA rules”, large office suites, surgery centers, fancy equipment, larger hospitals and the bricks and mortar that comprised traditional medical practices or financial product delivery systems. One doctor or niche focused FA with a great idea, good bedside manners or competitive advantage, can outfox a slew of public servants, the AMA, SEC, ADA or FINRA “faux copy-cat examiners”, while still serving the public – and patients – and making money. It’s now a unit-of-one economy where “Me Inc.”, is the standard. Physicians and FAs must maneuver for advantages that boost their standing and credibility among patients, peers, payers, customers and clients. Examples include patient satisfaction surveys; outcomes research analysis, evidence-based-medicine, physician economics credentialing and true integrated fiduciary-focused financial planning.

However, we should also realize the power of networking, vertical integration and the establishment of virtual RIAs or medical practices, which come together to treat a patient, or help a client, and then disband when a successful outcome is achieved. Job security is earned with more successful outcomes; not necessarily a degree, automatic AUMs, certifications or onsite presence. In fact, some competition experts, like Shirley Svorny PhD, a professor of economics and chair of the Department of Economics at California State University, wonder if a medical degree is a barrier – rather than enabler – of affordable healthcare.

Link: https://healthcarefinancials.wordpress.com/2009/01/08/medical-licensing-obstacle-to-affordable-quality-care

Others even presume the establishment of virtual medical schools and hospitals, where students and doctors learn and practice their art on cyber-entities that look and feel like real patients, but are generated electronically through the wonders of virtual reality units. The same can be said for the financial services industry, although much farther down-line given its current slow rate of real education and quasi-professional acceptance.

[B] Rule No. 2

Challenge conventional wisdom, think outside the traditional box, recapture your dreams and ambitions, disregard conventional gurus and work harder than you have ever worked before. Remember the old saying, “if everyone is thinking alike, then nobody is thinking”. Do collective-nistas and nationalized healthcare advocates react rationally; or irrationally? [THINK: Wall Street, medical unions]

[C] Rule No 3

Differentiate yourself among your healthcare and financial advisory peers. Do or learn something new and unknown by your competitors. Market your accomplishments and let the world know. Be a non-conformist. Conformity is an operational standard and a straitjacket on creativity. Doctors and FAs should create and innovate, not blindly follow organization or political “union” leaders [shop stewards, BDs, etc] into oblivion.

[D] Rule No 4

Realize that the present situation is not necessarily the future. Attempt to see the future and discern your place in it. Master the art of the quick change with fast but informed decision making. Do what you love, disregard what you don’t, and let the fates have their way with you. Then, decide for yourself if you are of this ilk – and adhere to any of the above rules? Or, just become an employed [government, BD] doctor or FA shill. Just remember that the political party, or monopoly that can give you a job, can also take it away [THINK: LB, ML, Wachovia, national healthcare, etc].

CP 1

Memorial Day Considerations

Finally, on this Memorial Day weekend, consider that life and career is a journey, and that in this country we have the choice to ponder or pursue any, and all of the above options, and more. We have the ability to think, cogitate and ruminate, as we have done here today. So – please – thank those who have helped turn this idealistic philosophy, into pragmatic daily reality.

For us personally, we thank Bonze Star Medal Winner Captain Cecelia T. Perez, RN. Now – ponder and consider – who do you thank? If no one has impacted you up-close on this Memorial Day weekend and national holiday, please visit our military channel to reflect, comment and opine.

Link: https://healthcarefinancials.wordpress.com/category/military-medicine

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

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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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

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Dr. Somnath Basu on Investing

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He Writes for the Medical Executive-Post

By Ann Miller; RN, MHA

[Executive-Director]

Dr. Somnath Basu is no stranger to the ME-P, or the financial planning community. He is a Professor of Finance at California Lutheran University and the Director of its California Institute of Finance.

Academic Background

Dr Basu earned his BA in Economics, University of Delhi, MBA (Finance), Marquette University and a PhD (Finance), University of Arizona. He is well published and is an award winning teacher. He has significant consulting experience with US Fortune 100 companies, advising institutional money managers and in developing proprietary finance and planning software. He serves on various Boards and committees including the CFP (chaired the Model Curriculum Revision Committee) Board of Standards and the Financial Planning Association.

Basu’s New Book

His new book, co-authored with Professors’ Block and Hirt, Investment Planning for Financial Professionals is available now, published by McGraw Hill, in May 2006.

Link: http://www.amazon.com/Investment-Planning-Geoffrey-Hirt/dp/0071437215/ref=sr_1_1?ie=UTF8&s=books&qid=1265918999&sr=1-1

Additional essays by Dr. Basu can be viewed at: http://blog.fpaforfinancialplanning.org/author/somnathbasufpa/

He also writers a column for the Journal of Financial Services Professionals. He can be reached at:

Contact Dr. Somnath Basu
Director – California Institute of Finance
Cell: 805 405 4448
Work: 805 493 3980
http://www.clunet.edu/cif

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)

The Scott Brown versus Healthcare Reform Poll

The Sott Brown Opinion Poll

By Staff Writers

In what some pundits are calling the “Boston Massacre” in liberal Massachusetts, Republican Scott Brown rode a wave of voter anger to win the US Senate seat held by the late Edward M. Kennedy for nearly half a century, leaving President Barack Obama’s health care overhaul in doubt and marring the end of his first year in office.

Our ME-P Audience

As a financial advisor, we know you are aware of the rise in healthcare stocks yesterday. And, as a medical executive or healthcare professional, we know you have been against the public option, and healthcare reform, in its current version.  The AMA is not your friend – nor does it represent you.

The Question Is?

And so, do you believe that last Tuesday’s Republican victory in Massachusetts means the current Democratic health care bill will not be on the President’s desk in 2010?

Please VOTE:

ME-P Thought-Leader [MD] in the News

Brian J. Knabe MD of Savant Capital Management

By Max Alexander

Dow Jones Newswires; 212-416-2245 Brian J. Knabe MD

Lots of doctors get burnt out dealing with the business end of medicine. But Brian Knabe, a family practice physician in Rockford, Ill., had such a passion for crunching numbers that he became a financial planner.

Knabe, 42 years old, still sees patient’s two half-days a week. He also teaches residents for another half-day at the University of Illinois – College of Medicine.

Most of the week, he’s a certified financial planner with Savant Capital Management.

“I hear all the jokes,” says Knabe, “the most popular being some version of, ‘Hey I guess my portfolio’s doing so badly, they had to bring in the doctor.'”

When the laughter dies down – it doesn’t take long – people often ask what motivated him to transition from medicine into finance.

His short answer is what you’d expect from a wealth adviser: “I wanted to diversify my career.”

The long answer includes a lifelong passion for math that runs in the family. Knabe’s father and brother are both engineers, and the doctor himself majored in bioengineering at Marquette University. “In college, I loved calculus, statistics and differential equations,” he says.

Growing up in Rockford, his best friend was Brent Brodeski, a partner at Savant, and Knabe had been a client of the firm since 1995. “For years, I joked with Brian, ‘If you ever get bored with medicine, you can join us,'” says Brodeski. “Three years ago he called and said, ‘I’ll take you up on that.’ I was floored.”

Knabe wasn’t bored with medicine. “I love taking care of patients, and the intellectual stimulation of the field,” he says. “So I told the partners at Savant that I would only do this if they allowed me to continue practicing medicine part-time.” Meanwhile, he went back to Marquette and got his CFP credentials.

About half of Knabe’s financial clients are doctors, who appreciate his insider’s knowledge of their work and financial issues. Both fields involve privacy and trust, he notes, and both involve planning for the future. They also involve an element of uncertainty.

Sometimes his advice is specifically health-related.

“One client I was working with was a couple where the husband had a terminal illness,” recalls Knabe. “I worked closely with the family in planning living will issues and durable power of attorney for health care. I’ve helped other clients wade through health insurance and disability issues.”

Yes, financial clients do sometimes ask him for medical advice, but he stops them before they can unbutton their shirt.

“If they have a problem and need a diagnosis, I’ll tell them where to go to get a second opinion,” he says.

Link: http://online.wsj.com/article_email/BT-CO-20090914-711325-kIyVDAtMEM5TzEtNDIxMDQwWj.html 

Managing Editor’s Note:Become a CMP

Dr. Knabe is also enrolled in the www.CertifiedMedicalPlanner.com program in health economics and medical practice management for financial advisors and healthcare consultants.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

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 

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Evaluating a Sample Physician Financial Plan III

Stress Testing Results a Decade Later

[By Dr. David Edward Marcinko; CPHQ, MBA, CMP™]

[By Hope Rachel Hetico; RN, MHA, CPHQ, CMP™]dave-and-hope4

We are often asked by physicians and colleagues; medical, nursing and graduate students, and/or prospective clients to see an actual “comprehensive” financial plan. This is a reasonable request. And, although most doctors who are regular readers of this Medical Executive-Post have a general idea of what’s included, many have never seen a professionally crafted financial plan. This not only includes the outcomes, but the actual input data and economic assumptions, as well.

The ME-P Difference

And so, in a departure from our pithy and typically brief journalistic style, we thought it novel to present such a plan for hindsight review. But; we present same in a very unusual manner befitting our iconoclastic and skeptical next-generation Health 2.0 philosophy. And, we challenge all financial advisors to do same and compare results with us.

How so?

By using a real life plan constructed a decade ago and letting ME-P reader’s review, evaluate and critique same.

  • Part I is for a married drug-rep, then medical school student [51 pages] with no children.
  • Part II is for the same mid-career practicing physician [28 pages] with 2 children.
  • Part III is for the same experienced practitioner at his professional zenith [56 pages].

Part III: Sample Financial Plan III

Fiduciary Advisors

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As former financial advisors and licensed insurance agents – and a reformed certified financial planner – it is our duty to act as economic fiduciaries for clients. In other words; to put client interests above our own. This culture was incumbent in our participatory online www.CertifiedMedicalPlanner.org educational program in health economics and medical practice management; since inception in 2000.

Assessment

And so, as Edward I. Koch famously asked as Mayor of New York City from 1978-1989: “how am I doing”; we sought to ask and answer same. What did we do right or wrong; and how were our assumptions correct or erroneous?  As Certified Professionals in Healthcare Quality this is the question we continually seek to answer in medicine. And, as health economists, this is the financial advisory equivalent of Evidence Based Medicine [EBM] or Evidence Based Dentistry [EBD] etc. It is a query that all curious FAs should ask.

Note: Be sure to review sample plan I and II, right here:

Link: Sample Financial Plan I

Link: Sample Financial Plan II

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. As a financial advisor, accountant, financial planner, etc., we challenge you to lay bare your results as we have done. And, be sure to “rant and rave” – and – “teach and preach” about this post in the style of Socrates, with Candor, Intelligence and Goodwill, to all. Doctors – chime in – too. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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FINANCE: Financial Planning for Physicians and Advisors
INSURANCE: Risk Management and Insurance Strategies for Physicians and Advisors

 

ASSUMPTIONS

Sample Mega Plan for a New Physician

Joe Good, a 30-year-old pharmaceutical sales representative, and his pregnant wife Susie Good, a 30-year-old accountant, sought the services of a certified financial planner because of a $150,000 inheritance from Joe’s grandfather. The insecurity about what to do with the funds was complicated by their insecurity over future employment prospects, along with Joe’s frustrated boyhood dream of becoming a physician, along with only a fuzzy concept of their financial future.

After several information-gathering meetings with the CFP, concrete goals and objectives were clarified, and a plan was instituted that would assist in financing Joe’s medical education without sacrificing his entire inheritance and current lifestyle. They desired at least one more child, so insurance and other supportive needs would increase and were considered, as well. Their prioritized concerns included the following:

1. What is the proper investment management and asset allocation of the $150,000?

2. Is there enough to pay for medical school and support their lifestyle?

3. Can they indemnify insurance concerns through this transitional phase of life,  including the survivorship concerns of premature death or disability?

4. Can they afford for Susie to be the primary bread winner through Joe’s medical school,   internship, and residency years?

5. Can they afford another child?

Current income was not high, and current assets were below the unified estate tax-credit. Therefore, income and estate-planning concerns were not significant at that time.

After thoroughly discussing the gathered financial data, and determining their risk profile, the CMP™ made the following suggestions:

1. Reallocate the inheritance based on their risk tolerance, from conservative to long-term growth.

2. Maximize group health, life, and disability insurance benefits.

3. Supplement small quantities of whole life insurance with larger amounts of term insurance.

4. Create simple wills, for now.

Sample Mega Plan for a Mid-Life Physician

A second plan was drawn up 10 years later, when Joe Good was 40 years old and a practicing internist. Susan, age 40, had been working as a consultant for the same company for the past decade. She was allowed to telecommunicate between home and office. Daughter Cee is nine years old, and her brother Douglas is seven years old.

The preceding suggestions had been implemented. The family maintained their modest lifestyle, and their investment portfolio grew to $392,220, despite the withdrawal of $10,000 per year for medical school tuition. The financial planning aspects of the family’s life went unaddressed. Educational funding needs for Cee and Douglas prompted another frank dialogue with their CMP. Their prioritized concerns at this point were as follows:

1. Reallocation of the investment portfolio

2. Educational funding for both children

3. Tax reduction strategies

4. Medical partnership buy-in concerns

5. Maximization of their investment portfolio

6. Review of risk management needs and long-term care insurance

7. Retirement considerations

The following suggestions were made:

1. Grow the $392,220 nest egg indefinitely.

2. Project future educational needs with current investment vehicles.

3. Maximize qualified retirement plans with tax efficient investments.

4. Update wills to include bypass marital trust creation, and complete proper testamentary planning, including guardians for Cee and Douglas.

5. Retain a professional medical practice valuation firm for the practice buy-in.

Sample Mega Plan for a Mature Physician

At age 55, Dr. Joseph B. Good was a board-certified and practicing internist and partner of his group. Susan, age 55, was the office manager for Dr. Good’s practice, allowing her to provide professional accounting services to her husband’s office and thereby maximizing benefits to the couple from the practice. Daughter Cee was 24 years old, and her brother Douglas was 22 years old. The preceding suggestions had been implemented.  They upgraded their home and modest lifestyle within the confines of their current earnings. They did not invade their grandfather’s original inheritance, which grew to $1,834,045. Reallocation was needed. The other financial planning aspects of their lives had gone unaddressed. Retirement and estate planning issues prompted another revisit with their original CMP’s junior partner.

Their prioritized concerns at this point were as follows:

1. Long-term care issues

2. Retirement implementation

3. Estate planning

4. Business continuity concerns

The following suggestions were made:

1. Analyze the cost and benefits of long-term case insurance, funded with current income until retirement.

2. Reallocate portfolio assets and  plan for estate tax reduction, with offspring and charitable planning consideration..

3. Retain a professional practice management firm for practice sale, with proceeds to maintain current lifestyle until age 70.

If you want the opportunity to reach a personalized weekly audience of health care industry insiders, innovators and watchers, the Medical Executive-Post and its educational forums may be right for you?

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Ann Miller; RN, MHA

[Executive Director]

Medical Executive-Post

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Understanding the Need for Onsite Practice Management Visits

Interview Information also Important

By Dr. David E. Marcinko and Staff Reporters

www.healthcareFinancials.comHO-JFMS-CD-ROM

According to Robert James Cimasi MHA, ASA, AVA, CMP™ of Health Capital Consultants, LLC, in St. Louis, MO, the following types of information specific to medical practices should be gathered by the financial executive, financial advisor or healthcare consultant when performing a practice enhancement engagement, or especially, an economic valuation and appraisal. This information may be obtained through an interview, questionnaire, or preferably a site visit:

  • Background Information: Include such information as the number of years the entity has operated at its current location and in the community, as well as the office hours.
  • Building Description: Include the location (urban/suburban), proximity to hospitals and other medical facilities, and its size, construction, electrical and computer wiring, age, access to parking, and so on.
  • Office Description: Approximate acquisition details and price, as well as ownership or lease details should be included.  The square footage and number of rooms, and a description of different office areas should be outlined, including, where applicable: medical equipment, including all diagnostic imaging and major medical equipment; pharmacy, laboratory, examination rooms, waiting rooms, and other areas.
  • Management Information Systems: Document types of hardware and software and the cost, age, and suitability of all components, including their management functions, reporting capabilities, and integration between programs.
  • History of the Entity: Give the date founded and by whom, the number of full-time equivalent (FTE) physicians in practice by year, the physicians who have joined and left the entity, the dates they practiced at the entity, and their relationship and practice arrangement with the entity.
  • Staff Description: Include the number and types of non-physician positions as well as the tenure and salary of all current employees.
  • Competitive Analysis: Include details of hospital programs impacting practice, growth or decline in the volume of business and the reasons, association with other physicians, competitive strengths and threats, the number and volume of procedures performed, any change in the number and volume, and the corresponding fees.
  • Patient Base Information: Encompass income distribution and percentages from different payors, the number of new patients and total patients seen per week, the age mix of patients, the number of hours spent in patient care per week, and the number of surgeries performed.
  • Managed Care Environment: Details the terms and conditions of all managed care contracts including discounts and withholds, the impact on referral patterns and revenues, willingness to participate in risk sharing contracts and capitation, and the entity’s managed care reporting capabilities.
  • Hospital Privileges and Facilities: List all hospital privileges held by physician members of the medical practice and the requirements for acquiring privileges at the different local hospitals.
  • Credit Policy and Collections: Include practice policies for billing and payment, use of collection agencies, acceptance of assignments, other sources of revenues, and an aged breakdown of accounts receivable.
  • Financial Management: Include cash management procedures and protections, credit lines and interest, controls to improve payment of accounts payable, late payment frequency, formal or informal financial planning methods, and budgeting processes.
  • Operational Assessment: Include governance structure for the entity, detailing responsibilities and procedures for performance, conflicts, recruitment, outcomes measures, case management, reimbursement; income, continuing medical education (CME), credentialing, and utilization review.

Assessment

www.CertifiedMedicalPlanner.comBecome a CMP

The financial advisor must also allow for discussion of overall relationships with physicians in the community, practice concerns, and needs.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Have you ever had such an onsite visit? Was it by a fiduciary financial advisor or medical management consultant; or other? What was the outcome? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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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 

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Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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And, credible sponsors and like-minded advertisers are always welcomed.

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About Certified Medical Planner™

 

 

 

SPONSOR NOTICE

 

Top 10 Reasons to Become a

Certified Medical Planner™

 

1. Expertise: Provide health economics, business and financial advice to physicians.

2. Credibility: Gain health industry recognition and fiduciary clout.

3. Opportunity: Focus on the lucrative and expanding physician advisory niche.

4. Recognition: Join a select group of advisory experts.

5. Distinction: Become quality; rather than product driven.

6. Achievement: 500 hours of financial, health economics and management education.

7. Evidence: Validate deep healthcare industry knowledge.

8. Resource: CMP™ text and hand books, dictionaries, and institutional print journal.

9. Distinction: Set yourself apart with our chartered logo and trade-mark identity.

10. Commitment: Become the “go-to” financial advisor for all medical professionals.

 

www.CertifiedMedicalPlanner.com

 

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 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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I Jealously “Shake my Fist” at Somnath Basu PhD

On CFP® Mis [Trust] – One Doctor’s Painful Personal Experience

[“So Sorry to Say it … but I Told You So”]

By: Dr David Edward Marcinko; FACFAS, MBA, CMP™

[Publisher-in-Chief]dem21

According to Somnath Basu, writing on April 6, 2009 in Financial Advisor a trade magazine, the painful truth is that many financial practitioners are merely sales people masquerading, as financial planners [FPs] and/or financial advisors [FAs] in an industry whose ethical practices have a shameful track record. Well, I agree, and completely. This includes some who hold the Certified Financial Planner® designation, as well as the more than 98 other lesser related organizations, logo marks and credentialing agencies [none of which demand ERISA-like fiduciary responsibility]. For more on this topic, the ME-P went right to the source last month, in an exclusive interview with Ben Aiken; AIF® of Fi360.com  

fp-book4

The CFP® Credential – What Credential?

Basu further writes that stockbrokers and insurance agents who earn commissions from buying and selling stocks, insurance and other financial products realize that a Certified Financial Planner® credential will help grow the volume of their business or branch them into other related and lucrative products and services. After all, there are more than 55,000 of these “credentialed” folks. And, this marketing designation seems to have won the cultural wars in the hearts and minds of an unsuspecting – i.e., duped public; probably because of sheer numbers. Didn’t a CFP Board CEO state that its’ primary goal was growth, a few years ago? Can you say “masses of asses”, as the oft quoted Bill Gates of Microsoft used to say when only 2,000 micro-softies defeated 400,000 IBMers during the PC operating system wars of the early 1980’s. Quantity, and marketing money, can trump quality in the public-relations business; ya’ know … if you repeat the lie often enough … yada … yada … yada! Yet, as the so-called leading industry designation, the CFP® entry-barrier standard is woefully low. Moreover, the SEC’s [FINRA] Series #7 general securities licensure sales examination is not worth much more than a weekend’s study attention, even to the uninitiated.

insurance-book2

Easy In – Worth Less Out

In our experience, we agree with Basu and others who suggest that scores of lightly educated, and sometimes wholly in-articulate and impatient individuals are zipping through the CFP® Board of Standards approved curriculum in three to six months of online, on-ground, or “self-study”. But, that some can do so without a bachelor’s degree when they join wire-houses and financial institutions, which cannot be trusted to adequately train them, is an abomination. And, even more sadly, some of these CFP™ mark-holders, and other folks, believe they have actually received an “education” from same. Of course, their writing skills are often non-existent and I have cringed when told that, in their opinion, advertiser-driven trade magazines constitute “peer-reviewed” and academic publications. Incidentally, have you noticed how thin these trade-rags are getting lately? Much like the print newspaper industry, are they becoming dinosaurs? One agent even told me, point-blank, that his CLU designation was the equivalent of an “academic PhD in insurance.” This was at an industry seminar, where he thought I was a lay insurance prospect.

THINK: No critical thinking skills.

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Education

There is another sentiment that may be applied in many of these cases; “hubris.” I mean, these CFP® people … just don’t know – how much they don’t know.”  The very real difference between training versus education is unknown to many wire-houses and FAs, isn’t it? And, please don’t get me started on the differences in pedagogy, heutagogy and androgogy. Moreover, it’s sad when we see truly educated youngsters become goaded by wire-houses into thinking that these practices are de-rigor for the industry. One such applicant to our Certified Medical Planner™ program, for example, had both an undergraduate degree in finance and a graduate degree in economics from the prestigious Johns Hopkins University – in my home town of Baltimore, MD [name available upon request]. He was told, in his Smith Barney wire-house training program, to eschew CMP™ accountability and RIA fiduciary responsibility, when working with potential physician and lay clients; but to get his CFP® designation to gather more clients. To mimic my now 12 year-old daughter; it seems that: SEC Suitability Rules – and – Fiduciary Accountability Drools. And, to quote Hollywood’s “Mr. T”; I pity the fools, er-a, I mean clients. But, T was an actor, and this is serious business.

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Of CEU Credits and Ethics

Beside trade-marks and logos, we are all aware that continuing education, and a code of ethics, is another important marketing and advertising component of state insurance agents and CFP licensees. It’s that old “be” – or “pretend to be” – a trusted advisor clap-trap. Well, I say horse-feathers for two reasons. First, both my insurance and CFP® Continuing Educational Unit [CEU] requirements were completed by my daughter [while age 7-10], by filling in the sequentially identical and bubble-coded, multiple-choice, answer-blanks each year. Second, this included the mandatory “ethics” portions of each test. When I complained to my CEU vendor, and state insurance department, I was told to “enjoy-the-break.”  My daughter even got fatigued after the third of fourth time she took the “home-based tests” for me.  After I opened my big mouth, the exact order of questions was changed to increase acuity, but remained essentially the same, nevertheless. My daughter got bored, and quit taking the tests for me, shortly thereafter. She always “passed.”dhimc-book3

Thus, like Basu, I also find that far too many financial advisors are unwilling to devote the time necessary to achieve a sound education that will help attain their goals, and would rather sell variable or whole life products than simple term life, even when the suitability argument overwhelmingly suggests so, for a higher payday. We not only have met sale folks without undergraduate degrees, but also too many of those with only a HS diploma, or GED. Perhaps this is why a popular business truism suggests that the quickest way for the uneducated/under educated class to make big bucks, is in sales. Just note the many classified ads for financial advisors placed in the newspaper job-section, under the heading “sales.” Or, in more youthful cultural terms, “fake it – until you make it.”

Of the iMBA, Inc Experience

According to Executive Director Ann Miller RN MHA, and my experience at the Institute of Medical Business Advisors, Inc:

“Far too many financial advisors who contact us about matriculation in our online Certified Medical Planner™ program – in health economics and management for medical professionals – don’t even know what a Curriculum Vitae [CV] is? Instead, they send in Million Dollar Roundtable awards, Million Dollar Producer awards, or similar sales accomplishments as resume’ boosters. It is also not unusual for them to list some sort of college participation on their resumes, and websites, but no school affiliation or dates of graduation, etc. And, they become furious to learn that we require a college degree for our fiduciary focused CMP™ program, and not from an online institution, either. The onslaught of follow-up nasty phone-calls; faxes and emails are laughable [frightening] too.”  

www.MedicalBusinessAdvisors.com

Assessment

More often than not, it is the financial institutions that FAs and CFP™ certificants’ work for that reward sales behavior with higher commissions, rather than salaries; which encourage such behavior and create the vicious cycles that are now the norm.

THINK: ML, AIG, Citi, WAMU, Wachovia, Hartford, Prudential, etc.

Note: Original author of Restoring Trust in the CFP Mark, Somnath Basu PhD, is program director of the California Institute of Finance in the School of Business at California Lutheran University where he’s also a professor of finance. He can be reached at (805) 493 3980 or basu@callutheran.edu. We have asked him to respond further.

My Story: I am a retired surgeon and former Certified Financial Planner® who resigned my “marketing trademark” over the long-standing fiduciary flap. I watched this chicanery for more than a decade after protesting to magazines like Investment Advisor, Financial Advisor, Registered Rep, Financial Planner, the FPA, etc; up to, and even including the CFP® Board of Standards; to no avail. Feel free to contact me for a copy of a 43 page fax, and other supportive documentation from the CFP® Board of Standards – and their outsourced intellectual property attorneys – over a Federal trademark infringement lawsuit they tried to institute against me for innocent website errors placed by a visually impaired intern. Obviously, they disliked the launch of our CMP™ program. As a health economist and devotee of Ken Arrow PhD, I polity resigned my license, as holding no utility for me, to the shocked CFP Board. They later offered to consider re-instatement for a mere $600 fee with letter of explanation, to which I politely declined. Of course, my first thought after living in the streets of South Philadelphia while in medical school, during the pre-Rocky era, was to say f*** off – but I didn’t. Nevertheless, I still seem to be on their mailing list, years later. No doubt, the list is sold, and re-sold, to various advertisers for much geld. And, why shouldn’t they; an extra bachelor, master and medical degree holder on their PR roster looks pretty good. I distrust the CFP® Board almost as much as I distrust the AMA, and its parsed and disastrous big-pharma funding policies. Right is right – wrong is wrong – and you can’t fool all of the people, all of the time, especially in this age of internet transparency.

Shaking my Fist at Somnath … in Envy

And so, why do I shake my fist at Somnath Basu? It’s admittedly with congratulations, and a bit of schadenfreude, because he wrote an article more eloquently than I ever could, and will likely receive much more publicity [good or slings-arrows] for doing so. You know, it’s very true that one is never a prophet in his own tribe. Oh well, Mazel Tov anyway for stating the obvious, Somnath. The financial services industry – and more specifically – the CFP® emperor have no clothes! Duh!

ho-journal5

Good Guys and White Hats

Now that Basu’s article has appeared in Financial Advisor News e-magazine, the other industry trade magazines are sure to follow the CFP® certification denigration reportage, in copy-cat fashion. And, the fiduciary flap is just getting started. This is indeed unfortunate, because I do know many fine CFP® certificants, and non-CFP® certified financial advisors, who are well-educated, honest and work very diligently on behalf of their clients. It’s just a shame the public has no way of knowing about them – there is no white hat imprimatur or designation for same – most of whom are Registered Investment Advisors [RIAs] or RIA reps. For example, we know great folks like Douglas B. Sherlock MBA, CFA; Robert James Cimasi MHA, AVA, CMP™; J. Wayne Firebaugh, Jr CPA, CFP®, CMP™; Lawrence E. Howes MBA, CFP®; Pati Trites PhD; Gary A. Cook MSFS, CFP®, CLU; Tom Muldowney MSFS, CLU, CFP®, CMP™;  Jeffrey S. Coons PhD, CFP®; Alex Kimura MBA, CFP®; Ken Shubin-Stein MD, CFA; and Hope Hetico RN, MHA, CMP™; etc. And, to use a medical term, there are TNTC [too many, to count] more … thankfully!

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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At Sharkey, Howes & Javer, we specialize in people, their money and their choices. We offer our clients peace of mind and the guidance to help them make wise lifetime decisions along their path to success.

Team Approach

We are a team, working in partnership with our clients and their other professional advisors to ensure a comprehensive approach to long-lasting financial decisions.

Our History

We were established in Denver, Colorado in 1990, when Eileen M. Sharkey, CFP®, formed the firm of Sharkey, Howes & Javer, a partnership with Lawrence E. Howes, MBA, CFP® and Joel B. Javer, CLU, CFP®. Since then, our team of professional planners and support staff has grown to serve over 1000 clients.

Industry Acknowledged Certifications

Larry Howes, MBA, AIF®, CFP® is a founder and principal of Sharkey, Howes & Javer, Inc., a firm that provides financial planning and portfolio management to individuals and businesses. He received his MBA from Regis University and Bachelor of Science degree in Management from Metropolitan State College in Denver and was admitted to the Registry of Financial Planning Practitioners in 1986. He received his CFP® designation in 1987. Larry was awarded an AIF®, Accredited Investment Fiduciary, in 2004 from the University of Pittsburgh. He is also a Certified Medical Planner™ (Hon).

Fiduciary – Yes

RIA – Yes

Published Authors and Educators

Mr. Howes is an adjunct professor of financial planning at Metropolitan State College – Denver.

Larry teaches the Investment course for the Certified Financial Planning certification program for Metro.

Larry is a featured writer for the Metropolitan Denver Dental Society’s journal entitled Articulator.  Larry is also a featured writer for Colorado Medicine.  In addition, Larry co-authored the Estate Planning and Execution chapter in the book entitled the Financial Planning Handbook for Physicians and Advisors

 

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Clean CRD record – Yes

Clean Criminal record – Yes

 

 

 

 

More information:

Tammy K. Durnford; MA

Manager of Client Relations

tammy@shwj.com

Sharkey, Howes & Javer, Inc.

720 S. Colorado Blvd.

Suite 600 South Tower

Denver, Colorado 80246

303-639-5100

800-557-9380

Fax 303-759-2335

Website: www.shwj.com

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Challenging Standard & Poor’s 500 Index

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Dr. Jeremy Siegel Opines

[By Staff Reporters]56371606

According to Financial Advisor News – an electronic trade magazine on March 17 2009 – Standard & Poor’s underestimate the earnings of its S&P 500 Index. So says, Jeremy Siegel PhD, a finance professor at the University of Pennsylvania’s Wharton School of Business and author of Stocks for the Long Run.

The Dilemma

The problem started when the Wall Street Journal ran an op-ed piece by Siegel that argued Standard & Poor’s uses a “bizarre” methodology for calculating the earnings and P/E ratio for the S&P 500. In it, Siegel explained that the earnings of S&P 500 companies are currently treated equally, but should instead be weighted in proportion to their market capitalization. Market capitalization weighting, he noted, is used to measure the S&P 500 returns. Such a system gives larger weight to the earnings of a company such as Exxon-Mobil, and lower weight to an S&P 500 member such as Jones Apparel.

Siegel’s Example

For example, “a 10% rise in Exxon-Mobil’s price would boost the S&P 500 by 4.64 index points, while the same fall in Jones Apparel would have no impact since the change is far less than the one-hundredth of one point to which the index is routinely rounded,” Siegel wrote.

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Outcome

As a result of the above, if capitalization weightings were applied to 2008, the earnings of S&P 500 companies would have been $71.10 per share instead of $39.73 per share.

S&P’s Support

In response, an S&P official said Siegel’s argument “fails the test of both logic and index mathematics.”

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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A Due-Diligence ‘Condom’ for Physician Investors

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Using Financial Advisors with Increased Safety

[By Dr. David Edward Marcinko; MBA, CMP™]dr-david-marcinko8

Following the Bernie Madoff investment scheme, and related financial industry scandals, here are seven “red-flags” that should have alerted physician-investors to proceed with extreme caution. Always consider them before making an investment with any financial advisor [FA], registered representative [RR] or financial advisory firm, regardless of reputation, size, referral recommendation or so-called industry certifications and designations. In other words, according to Robert James Cimasi; MHA, AVA, and a Certified Medical Planner™ from Health Capital Consultants LLC, of St. Louis, MO;” trust no one and paddle your own canoe.”

Red Flags of Cautious Investing

As a former insurance agent, financial advisor, registered representative, investment advisor and Certified Financial Planner™ for more than a decade, the existence of any one of the following items may be a “red-flag” of caution to any investor:

  • Acting as its’ own custodian, clearance firm or broker-dealer, etc.
  • Lack of a well-known accounting firm review with regular reporting.
  • Unreliable or sporadic written performance reports.
  • Rates-of-return that don’t seem to track industry benchmarks.
  • Seeming avoidance of regulatory oversight, transparency or review.
  • Lack of recognized written fiduciary accountability in favor of lower brokerage “sales suitability” standards.
  • No Investment Policy Statement [IPS]. 

Assessment

Let a word to the wise be sufficient going forward. But, in hindsight, a healthy dose of skepticism might have prevented this situation in the first place. As is the usual case, fear and greed often seem to rule the day. Just as there is no such thing as safe sex – just safer sex – there is no thing as safe intermediary investing. But, exercising some common sense will surely make investing with any financial advisor much safer. It’s like a condom for your money. 

For more information on the topic of fiduciary standards – which we have championed for the last ten years in our books, texts, white-papers, journal and online educational Certified Medical Planner™ program for FAs – watch out for our exclusive Medical Executive-Post interview with Bennett Aikin AIF®, Communications Coordinator of www.fi360.com coming in March. Ben, an Accredited Investment Fiduciary® did a great job with the tough questions submitted by our own Ann Miller; RN, MHA and Hope Hetico; RN, MHA, CMP™. Don’t miss it!

Disclaimer

I am the Managing Partner for http://www.CertifiedMedicalPlanner.org and I agree with this message.

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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RIA Merger Mania and the Medical PPMC Fiasco

What is Old is New Again -or- Lessons Learned

By Dr. David Edward Marcinko; MBA, CMP™

 dr-david-marcinko9According to the article Great Expectations-Disappointing Realities that recently appeared in Registered Representative, a trade magazine for the financial services industry, by John Churchill, the booming stock market of the last five years saw many Registered Investment Advisory [RIA] firms sell a portion of their future cash flows in return for cash and stock in an acquiring consolidating firm. This is known as a roll-up, or consolidator, business model. I am quite familiar with it, as both a doctor and financial advisor. I believe my dual perspective of both camps is somewhat unique, as well.

The NYSE Collapse

As the stock market collapsed in 2008-09, many RIAs who previously sold stakes to these “roll-up” consolidator firms began scrambling to pay quarterly preferred disbursements.  What gives, many implored? As a reformed Certified Financial Planner™, RIA representative, financial advisor and insurance agent, I can draw many parallels from these present day RIA consolidators to the similar Physician Practice Management Corporation roll-up fiasco of 1999-2000? Indeed, I can, and will [www.HealthcareFinancials.com]

My Experience with Medical Practice Consolidators

As a clinician and surgeon, I was the past president of a privately held regional Physician Practice Management Corporation [PPMC] in the Midwest. I assumed this route about a decade ago, by happenstance and background, when I helped consolidate 95 solo medical practices with about $50 million in revenues. But, our small company’s IPO roll-up attempt was aborted due to adverse market conditions, in 1999. Fortunately, a conservative business model based on debt, not the equity which was all the rage at the time, saved us right before the crash of 2000. So, we harvested fiscally conservative physicians who lost only a few operational start-up bucks; but no significant dollars.

On the other hand, those PPMCs roll-ups based on equity lost much more. In fact, according to the Cain Brothers index of public PPMCs, more than 95% of all equity value was lost by doctor-investors hoping to cash in on Wall Street’s riches they did not rightly deserve; not by practicing medicine but by betting on rising stock prices. So, projecting a repeat disaster from medicine, to the contemporary RIA consolidator business model, was not a great leap for me. And unfortunately, this was one of the few times I was all too correct in my prognostications.

PPMC’s Today

The type of medical consolidator or roll-up, formally called the Physician Practice Management Corporation [PPMC], was left for dead by the year 1999. Even survivors like Pediatrix Medical Group saw its stock drop precipitously. And, more than a few private medical practices had to be bought back by the same physicians that sold out to the PPMCs originally.

RIA Example

I sure hope this does not occur with FAs, as well. But, if an entity is being bought back and accounts receivables are being purchased, FAs should be careful not to pick this item up as income twice. The costs can be immense to the RIA practice, as later clients of mine learned the hard way.

Buy-Backs

For example, let’s say a family practice [or RIA?] purchased itself back from a PPMC, or RIA consolidator. Part of the mandatory purchase price, approximately $200,000 (the approximate net realizable value of the accounts receivable), was paid to the PPMC to buy back accounts receivable [ARs] generated by the physicians buying back their practice. Now, if an office administrator unknowingly begins recording the cash receipts specifically attributable to the purchased accounts receivable as patient fee income; trouble begins to brew. If left uncorrected, this error can incorrectly added $200,000 in income to this practice and cost it (a C Corporation) approximately $70,000 in additional income tax ($200,000 in fees x 35% tax rate). The error in the above example is that the PPMC [or RIA consolidator] must record the portion of the purchase price it received for the accounts receivable as patient [advisory] fee income. The buyer practice has merely traded one asset – cash – for another asset, the accounts receivable [ARs].  When the practice collects these particular receivables, the credit is applied against the purchased accounts receivable (an asset), rather than to patient [RIA] fees.  

RIA Revolution Follows PPMC Evolution

Today, surviving medical PPMCs are evolving from first generation multi-specialty national concerns, to second generation regional single specialty groups [my type], to third generation regional concerns, and finally to fourth generation Internet enabled service companies providing both business to business [B2B] solutions to affiliated medical practices, as well as business like consumer health solutions to plan members [healthcare 2.0]. I trust this sort of positive morphing will occur, over time, with the RIA consolidators. Perhaps yes, or no [www.HealthDictionarySeries.com]

RIA Consolidators

Among the most distressed RIA roll-up entities today may be the publically traded National Financial Partners and its more than 180 acquired firms, with more than 320 members in 41 states and Puerto Rico. NFP specializes in life insurance and wealth transfers, corporate and executive benefits, and financial planning and investment advisory services. Jessica M. Bibliowicz has been NFP’s President and CEO since inception in 1999. She is the daughter of Sandy Weill, and a member of the Board of Overseers for the Weill Medical College and Graduate School of Medical Sciences of Cornell University. NFP’s stock has declined from a high of $56 more than a year ago, to a current trading range of $3-4.           

And the Question Is?

And so, the question that MDs and RIAs should have asked when contemplating this business model was simply this: would I but the stock of an acquiring roll-up company if I were not part of the deal?

Valuable Consideration

Why? When MDs and RIAs sell to a consolidator, part of their “valuable consideration” is stock equity, so confidence and a conscientious work ethic is important. But, these “‘sell-out” entities are not retirement vehicles according to former financial advisor Hope Rachel Hetico; RN, MHA, CMP™ – a nurse executive and managing partner for www.MedicalBusinessAdvisors.com. Hope is also managing editor of this blog forum.

Assessment

More pointedly, according to one seller mentioned in the Churchill article,

“the whole [consolidator] pyramid is built on cash flows based on incremental growth and hugely optimistic projections of that growth”.  

Conclusion

Rest assured, the consolidator business model can be very successful; just think H. Wayne Huizenga’s Blockbuster Video and Waste Management, Inc. And so, your thoughts and comments on this Medical Executive-Post are appreciated? Why didn’t consolidation work in medicine, or with the RIAs? Or, reframed, why did consolidation work in the garbage collections industry and video store space? Can the fiercely independent RIA space learn something from the fiercely independent medical space?

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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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

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About National Compliance Services, Inc.

Want, Need or Risk Reduction Mechanism?
Staff Reporters

cmp-logo6

As readers and subscribers to the Medical Executive Post, and our related print periodicals, dictionaries and books are aware, choosing the right financial consulting firm, or consultant, is always a challenging task www.HealthCareFinancials.com Today, this is true more than ever, given the financial meltdown and the all too obvious shenanigans of Wall Street www.HealthDictionarySeries.com Lay and physician investors alike are affected; along with related financial advisors of all stripes, degrees and designations [spurious or more credible] www.MedicalBusinessAdvisors.com

National Compliance Services

According to the National Compliance Services, Inc. [NCS] website, an experienced team of customer-oriented professionals is in place that strives to meet personal and corporate compliance needs so that clients can focus on areas of expertise www.NCSonline.com

A Protean Focus

NCS operates in the financial compliance and regulatory services industry. Its strength may be in providing efficient, and reasonably priced products and services for many different sub-arenas, such as: investment and financial advisors, hedge and mutual funds, stock-brokers and broker-dealers. Their customized services are designed to structure a compliance program that is appropriate for any individual, or firm’s unique regulatory needs. NCS works to ensure compliance with applicable federal and/or state rules and regulations.

Range of Products and Services

NCS has offered its personalized services to more than 6,000 clients, both domestically and internationally. Their consultants include former regulatory examiners, accountants, attorneys, and other individuals with extensive hands-on industry experience.

Verification Services

NCS also offers a standard or customized line of verification services to Mutual Funds, Hedge Funds, Custodians, Broker-Dealers, Investment Advisers, and Third-Party Vendors. Verification services can be customized to include any or all of the following:

  • Firm Registration/Notice Filing with the Proper Jurisdiction(s)
  • Adviser Representative Registration(s)
  • Adviser Representative Degree(s) or Professional Designation(s)
  • Firm Reported Disciplinary History
  • Adviser Representative Reported Disciplinary History
  • Proper Registration of Solicitors
  • Proper Registration of Wholesalers and Third-Party Vendors
  • Bank Background and Activity Reports, and
  • OFAC Checks, etc.

Assessment

Moreover, claims of verification for over 15,000 Registered Investment Advisers, and Investment Adviser Representatives, seem plausible. For example, NCS recently contacted www.CertifiMedicalPlanner.com to verify the good-standing of a member and charter-holder.

Contact Info:

For further information, please contact:

Alex Aghyarian
National Compliance Services, Inc
Verification Technician
Phone: 561.330.7645 ext 302 and Fax: 561.330.7044
aaghyarian@ncsonline.com

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Verification in most any space is worthwhile of course; but is membership in a vague or nebulous organization helpful or harmful to the uninitiated?

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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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

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Advisors Fees vs. Brokerage Commissions

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Beware Assets-under-Management [AUMs]

[Dr. David Edward Marcinko MBA, CMP™]

dem-thinking

I don’t think that doctor-colleagues realize how much more a fee-based financial planner – or financial advisor – might take from a physician-client using an assets-under-management [AUM] subscription business model; than a traditional commission-based stock broker? Of course, commissions are what stock-brokers earn; and “broker” is a bad word today. The more politically correct term seems to be “planner” or “advisor” or “vice-president” or ‘wealth manager”; and these folks earn “fees” along with their confusing nom de plumes. But should they?

Example:

Look at 1% of $100,000 which comes to $1,000 per year. If a doctor-client is in it “for the long haul,” we can see why financial advisors want this money for the “long haul.” Twenty years of this model comes out to nearly $20,000 in fees [assuming zero growth]. If a financial advisor was going to stick the doctor in some investment and leave him alone, would it not have been better to take a one-time $5,000 commission, say at 5%? This way the doctor-client keeps the remaining $15,000. If the money actually grows over time – which it should in the long run – the advisor earns even more.

False Arguments

Now, don’t try to accept the false argument that this puts financial advisors “on the same side of the fence”, as the physician-client or that it allows advisors to take better care them. First off, clients should be taken care of, well. But, it also encourages the advisor to “risk-more to earn more”, and/or to goad the doctor-client into putting more money into the subscription-based account, rather than paying off the mortgage, for example. In fact, the recent mortgage crisis and stock market meltdown suggests that this deceptive argument may have been more common than realized. So, why not ask your advisor/broker to explain both ways s/he gets paid; and then decide for yourself – fees versus commissions?

Assessment

Of course, in today’s world of “assets-under-management,” the word “commission” is taboo. No “real financial planner” takes commissions; he or she would rather manage investments for a “fee” that lasts forever.

PS: Financial advisors really don’t mange most of these accounts, anyway. They are aggregated and outsourced to other firms, for a small sub-fee [a bit less than the original 1%]. The advisor then sends a nice quarterly report to the doctor, as if they did all the work!  Now, do you realize why the best name for these folks is “asset gatherers”; they often do little more than market and sell.

Conclusion

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. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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