Meet David K. Luke MIM CMP™ [An ME-P Thought-Leader]

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A Physician Focused Financial Advisior and Certified Medical Planner™

Financial Management Experience

https://www.medicuswealthplanning.com/team/david-k-luke

David K. Luke focuses on helping physicians, medical professionals, and successful retirees with financial planning, investment and risk management.

In the past 24 years of industry experience, David has held licenses including general securities registered representative, registered investment advisor, Branch management supervision, and Life, Accident, and Health Producers.

David, a fee-only advisor, is able to help his clients to achieve peace of mind and greater assurance with their financial goals by giving advice and providing investment management that is in their best interest, untainted by commissions or sales objectives. Likewise, in a true fiduciary capacity, he is able to help investors determine the reliability and suitability of products and services that they have been sold by other advisors.

David began his career managing money in 1986 in the General Motors of Canada Banking and Investments department where he was engaged in cash management, foreign currency hedging, and the debt issuance of a $100 million Eurobond and a $300 million Note Issuance facility. In 1988 as Supervisor of Borrowings for GMAC Canada David was responsible for the daily average issuance of $125 million in short-term Commercial Paper. David worked as a stock broker and portfolio manager for 2 major national brokerage firms (A.G. Edwards and Wachovia Securities) from 1989 to 2008.

Additionally, at Wachovia Securities David was among an elite group of financial advisors approved as a PIM (Private Investment Management) Portfolio Manager. Prior to joining Net Worth Advisory Group in 2010, David managed his own independent firm, Luke Wealth Strategies, working as a registered representative and investment advisor.

Education and Designations

  • President 2009/2010, Financial Planning Association (FPA) – Utah Chapter Affiliate
  • National Association of Personal Financial Advisors (NAPFA)
  • Member, Medical Group Management Association Master of International Management (Finance concentration)
  • American Graduate School of International Management Bachelor of Arts, Brigham Young University
  • Certified Medical Planner™ Professiobnal Designation from iMBA, Inc www.CertifiedMedicalPlanner.org

http://www.CertifiedMedicalPlanner.org

Assessment

David is our newest ME-P “thought-leader”. We look foward to his insider comments and posts. So, please welcome him and give his site a click: http://networthadvice.com/our-team/david-k-luke/

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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

cmp-logo

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.

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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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Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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New Regulations Needed For Financial Planners?

So Says New Coalition

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

The Financial Planning Coalition [FPC] is pushing for a law that would require anyone calling themselves a financial planner to meet certain ethical and educational standards and to register with the Securities and Exchange Commission [SEC].

About the FPC

According to its’ website, the Financial Planning Coalition is a collaboration of Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association® (FPA), and the National Association of Personal Financial Advisors (NAPFA) to advise legislators and regulators on how to best protect consumers by ensuring financial planning services are delivered with fiduciary accountability and transparency. Americans have grown leery of those who work in financial services.

Currently, financial planning (the process of advising individuals and families across a range of personal finance topics in addition to investment advice) is unregulated as a profession, resulting in major gaps in current laws. So, is it really a “profession” many ask – void of any significant barrier to entry?

The Financial Planning Coalition intends to work with Congress to produce legislation that puts the interests of clients first and enables consumers to identify a trusted financial adviser.

To learn more about the Financial Planning Coalition’s purpose and mission, click here to read, or download the Statement of Understanding [PDF].

SEC Wrong Oversight Agency?

According to this report in Financial Advisor magazine, an advertiser-driven trade journal:

the standards would be set by a public oversight board that would be funded by small registration fees paid by the financial planners, said Robert Glovsky, chair of the Certified Financial Planner Board of Standards during a conference call today. The CFP Board, as well as the Financial Planning Association and the National Association of Personal Financial Advisors makes up the coalition.

Exemptions

However, brokers and insurance agents would not be forced to register as financial planners, but those who held themselves out as financial planners would have to meet the required minimum competency and ethics standards or stop using the financial planner title.

Assessment

And so, as we have noted, written, preached and warned for more than a decade – anyone can call themselves a financial planner, or financial advisor; so beware medical colleagues.

More: http://www.fa-mag.com/fa-news/5314-new-regs-needed-for-financial-planners-coalition-says.html

NOTE: The fiduciary definitional standard conundrum was not even addressed in the article or by the committee, as far as I know. Moreover, note that SEC oversight was in place before, during and now after the Bernie Madoff scandal – so enough said about competency! www.HealthDictionarySeries.com

Conclusion

Your thoughts and comments on this ME-P are appreciated. What do you think FAs, and CFPs®? Should all become an RIA or ERISA styled fiduciary? Or, will this be another CFP® lite fiasco?

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.

Disclaimer: I am a former certified financial planner and CEO of the online www.CertifiedMedicalPlanner.com program for fiduciary advisors working in the healthcare space.

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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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Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

 

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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

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

Our Recent Experience with CFP® Mark Utility

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Certification Falling from Grace – Deserved or Not?

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief] dem21 

The Premise

In the summer [2008], we sent a random email blast to the first 200 Certified Financial Planners® on our list-serve. These were folks who had previously contacted us, and/or purchased our textbooks, handbooks, tools and/or dictionaries that assist accountants, financial advisors, attorneys, medical management consultants and all those working to assist physicians and medical professionals on business and economics matters.

The “Straw-Poll” Query

Our email blast asked the simple question:

“Did you ever voluntarily resign your license to use the CFP® mark?”

First Round Results

We received four positive responses [2%]. We then followed up to learn that 2 of the 4 were CPAs, one was a CFA and another was an MBA. Now, what do these results signify – probably nothing – or maybe an emerging trend?

Repeat

So, last summer [2009], after the continuing Wall Street collapse, and the Somnath Basu PhD article on “CFP Trust” in Financial Advisor magazine and this blog, we sent out a follow-up email to the exact same 200 Certified Financial Planners® as before; but carved-out and replaced the 4 CFPs who had resigned the mark, with 4 others.

Link: I Jealously “Shake my Fist” at Somnath Basu PhD

This time we asked the question:

“Have you recently considered allowing your CFP mark to lapse; or resigning it?”

Second Round Results

This time we received exactly eight positive replies [4%] or double the number from the first round. One CFP® said:

“I am rethinking my entire business and marketing philosophy. This includes separation from any taint left over from recent industry scandals – and yes – even including my CFP® mark”

 CMP logo

http://www.CertifiedMedicalPlanner.org

Assessment

This little experiment was not statistically significant by any means. And, again it probably is indicative of nothing. Yet, these types of questions must be boldly asked today; even if they were not even timidly asked yesterday.

Nevertheless, cited plausible reasons for the increased negative CFP® mark response may be:

 

  • CFP BoS lacks modernity and membership alliance. 
  • SEC mismanagement.
  • NASD/FINRA impotence.
  • Wall Street greed.
  • Lack of true fiduciary accountability.
  • Client anger and public distrust.
  • Advisor frustration at lost income.
  • College for Financial Planning and American College credibility.  
  • ME-P operations in the medical niche advisory space.
  • CFP® mark and related industry certification taint.
  • Alternative degrees and available designations.
  • Rise of RIAs and the fiduciary CMPmark for healthcare specificity.
  • Resigning [doing] and considering [thinking] are not equivalent;
  • etc, etc. 

It is interesting to note that no CFP® resigned their mark who did not hold either another graduate degree [MBA, MSFS, MA, MS, PhD], or more rigorous industry [CFA and CPA] certification.

Assessment 

So, is CFP mark allegiance just a union-like mentality of “united we stand – divided we fall”, by those with little to no gravitation pull of their own – or something else; ie., industry group think? You decide; and do tell us what you think.

Note: I am the founder of the CMP online education and certification program for financial advisors and consultants interested in the health economics, finance and medical practice management space, and a former [resigned] certified financial planner www.CertifiedMedicalPlanner.org 

Update 2013:

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.

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 Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Introducing Somnath Basu; PhD MBA

Our Newest ME-P Thought-Leader in Finance and Economics

By Ann Miller; RN, MHA

[Executive Director]Dr. Basu

Dr. Somnath Basu is a Professor of Finance at California Lutheran University and the Director of its California Institute of Finance. Dr. Basu is also a Professor of the Helsinki School of Economics Executive MBA Program. He earned his BA in Economics, University of Delhi, MBA (Finance), Marquette University and a PhD (Finance), University of Arizona.

Publications and Experience

Dr. Basu is extensively published in the field of investments and financial planning and is an award winning teacher. He has significant consulting experience with US Fortune 100 companies, advising institutional money managers and in developing proprietary personal investment software. Dr. Basu is actively involved with financial planning organizations including the National Endowment for Financial Education (NEFE), the CFP Board of Standards, International CFP Board and the Financial Planning Association. He coauthored the book (with Block and Hirt), “Investment Planning for Financial Professionals” McGraw Hill, May 2006 which is widely used by financial planning programs nationwide. 

AssessmentCLU

To regular our ME-P readers, Dr. Basu’s opinions are well known and not without controversy. But, whether you agree with him or not, his commitment to the industry and his economics and financial planning students is solid. And, always adhering to the Socratic dialog tradition of candor intelligence and goodwill.

Link: https://healthcarefinancials.wordpress.com/2009/04/09/i-jealously-shake-my-fist-at-somnath-basu/

Link: https://healthcarefinancials.wordpress.com/2009/04/16/dr-somnath-basu-replies-to-the-cfp%c2%ae-mis-trust-controversy/ 

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Pleas give Somnath a warm ME-P welcome and electronic “shout-out”. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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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

Evaluating a Sample Physician Financial Plan I

Stress Testing Our 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, now mid-career practicing physician [28 pages] with 2 children.
  • Part III is for the same experienced practitioner at his professional zenith [56 pages].

Link: Sample Financial Plan I

Fiduciary Advisors?fp-book2

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

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: Sample plans II and III to follow; so keep visiting the ME-P.

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.

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

Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

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Sponsors Welcomed

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

Link: https://healthcarefinancials.wordpress.com/2007/11/11/advertise

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 Medical 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 CMP, 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.

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Confusing Nomenclature? 

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

dem2Recently, John H. Robinson – a Honolulu based independent and dual-registered financial advisor who holds a degree in economics from Williams College and who has written and published numerous professional papers – essentially challenged the credibility of the College for Financial Planning.

“Dr. [Somnath] Basu [PhD] is quite correct in pointing out that the College for Financial Planning is not academically accredited and there are no admissions standards other than a nominal three year industry experience standard (three years as a clerk in a brokerage firm will qualify). Mr. [Kevin] Keller [CEO-CFP BoS] defends the curriculum by stating that, “Topics include economic concepts such as supply and demand, fiscal and monetary policy, time-value of money concepts…” The mere fact that that no prior college level academic experience in finance is required is testament to the fact that the coursework is largely 101 level materials.

To illustrate this point by example, economics represents one small chapter of the Investments section of the CFP curriculum. In contrast, econometrics and statistics alone was a semester long 300 level course in my undergraduate economics studies. This is not to suggest that the CFP program does not provide adequate training and preparation for a career in financial planning, but to assert that the CFP designation trumps a graduate or even undergraduate degree in finance or economics is difficult to defend. This was my counterpoint to Mr. [Dan] Moisand’s bellicose labeling of non-CFP certificants as “faux planners”.

Source: http://www.fa-mag.com/online-extras/4037-revisiting-cfp-credentialing.html

Moreover, he stated that:

In fairness, some of Dr. Basu’s ideals on the educational standards for financial planning certification seem a bit extreme as well. For instance, I can’t imagine subjecting doctors, attorneys, or even business school professors to periodic recertification exams.”

Source: http://www.fa-mag.com/online-extras/4037-revisiting-cfp-credentialing.html

The Big Question

And so, the big question for financial advisors and Certified Financial Planners®: Is the College for Financial Planning, a college at all? Is it accredited and more importantly, who accredits it? If not; why not? And, was the name “college” purposely selected to obfuscate?

Moreover, and of more importance to our physician readers, FAs and ME-P subscribers: Do doctors, attorneys or business school professors need to periodically recertify themselves by examinations?

IOW: Is Mr. Robinson correct or not – in fact or meaning – on one or both accounts? How about Dan Moisand? Am I, or Mr. Robinson, a “faux” planner?

Assessment

A paper co-authored by Mr. Robinson, entitled, “Reality Check: The implications of sustainable withdrawal analysis on real world portfolios” was awarded the CFP Board of Standards’ 2008 Outstanding Paper Award. He does not hold the CFP® designation.

Disclosure

Among many other “hats”, I am a former licensed insurance agent, certified financial planner, board certified surgeon, visiting B-school professor, and current academic provost for the CMP™ online program in health economics and medical practice management for fiduciary consultants. Our goal is to “raise the bar” for all colleagues in this space.

Update 2013:

Recent:

Conclusion

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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  

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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.

biz-book4

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.

cmp-logo1

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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