Thoughts On Financial Advisors and Planners [Videos]

Candid YouTube Videos

By Staff Reporters

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A Conversation with My Financial Planner:

http://www.youtube.com/watch?v=dFf6ibuAl5w&feature=related

The Wrong Financial Advisor:

http://www.youtube.com/watch?v=Vv4HQG2Hz0I&feature=related

Become an Investment Advisor:

http://www.youtube.com/watch?v=N1xpd4Z2p-g&feature=related

Assessment

“Many a true word is spoken in jest” and “Some truths, too painful or too likely to provoke, can be spoken only when the listener has been disarmed by laughter.”

-Geoffrey Chaucer

Conclusion

And so, your thoughts and comments on this ME-P are appreciated. How true are these videos? Are they more tongue-in-cheek or thoughtful and sobering?

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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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Why Most Financial Advisors Won’t be Fiduciaries

Industry Groups Differ On Fiduciary Standard

By Staff ReportersBenjamin Bills

The House Financial Services Committee recently heard two takes on the fiduciary standard – investment advisors who want it applied to broker dealers – and broker-dealers who want to apply a universal standard of care to all advisors, including investment advisors.

Assessment

And so, we encourage all ME-P subscribers to read industry trade magazines [aka ”trade rags”] to learn how some financial advisors fleece physicians and other investors by not being fiduciaries; with sincere apologies to all honest and hard working fiduciary advisors.Become a CMP IOW: Follow the money.

Link: http://www.financialadvisormagazine.com/fa-news/4532-industry-groups-differ-on-fiduciary-standard-.html

www.CertifiedMedicalPlanner.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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Our Other Print Books and Related Information Sources:

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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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.

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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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Sponsors Welcomed

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

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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.

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

About Fi360.com

Education for Financial Fiduciaries

Staff Reportersnyse1

According to the firm and website, www.Fi360.com offers a full circle approach to investment fiduciary education, practice management and support that has established it as the go-to source for investment fiduciary insights.

 

The Term “Fiduciary” Defined?

And, Fi360 defines an investment “Fiduciary” as:

“Someone who is managing the assets of another person and stands in a special relationship of trust, confidence, and/or legal responsibility”

Related definitional info: www.HealthDictionarySeries.com

Practitioner Based

With substantiated best-practices as a foundation, the firm offers training, tools and resources that are essential for fiduciaries and those who provide services to fiduciaries to effectively and successfully manage their roles and responsibilities. Fi360 say it is committed to assisting those who rely on their education programs, Web-based analytical software and resources to achieve success.

Training

Fi360 offers both AIF® and AIFA® training curriculums. The AIF® curriculum instructs investment fiduciaries on how to fulfill their duties to a defined standard of care. The AIFA® curriculum instructs participants on how to assess the conformance of investment fiduciaries to a Global Fiduciary Standard of Excellence [GFSE] using an ISO-like assessment process. These training curriculums are available in both classroom and Web-based settings; customized program are also available. Participants who successfully complete the programs, submit dues, agree to a code of ethics and meet other prerequisites may earn the AIF® or AIFA® designations, respectively.

Goals and Objectives

The goal of Fi360 is to help investment fiduciaries manage their responsibilities. But, according to Bennet Aiken AIF®, Fi360 Communications Coordinator, it is important to realize that AIF® / AIFA® designees are not required to be fiduciaries. While these designations are symbolic of training, knowledge and ongoing fiduciary development, they do not mean certification holders will always be acting as a fiduciary.

Assessment

Publications, blogs, articles, national conferences, assessments and more material for the collective and ongoing support of the fiduciary community are available; many for free and/or for the general public.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. But, why would a healthcare institution, medical practice, clinic or individual physician-investor hire anyone who will not act as a fiduciary and put their interests first; especially an AIF®/AIFA certification holder?

Note: Beginning today, and for the entire month of March 2009, we will be posting an exclusive interview with Bennett Aikin AIF®, the Communications Coordinator for fi360.com. Our topic will be on the rules, regulations and very definition of the modern financial fiduciary. Perhaps he can explain it all? Don’t miss it!

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

Our Other Print Books and Related Information Sources:

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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Financial Product Sales, Communication and Management

Techniques-of-Art for Financial Advisors

By Robert Ayrer and ME-P Staff Writers

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Before any piece of work that requires communication can be understood, the context must be established.  Without context, words have very little reality; and without reality, there can be no communication. Communication is the “transfer of meaning.”

Introduction

The lack of a definitive role of the marketing function (and the sales function, and the difference between the two) for financial advisors [FAs], has contributed to the lack of clarity required for the achievement of sales targets. The fuzzy line between “targets” and “goals” has left most financial product salesmen, OSJs [Office of Supervisory Jurisdiction] and sales managers without the “tools to manage.” In this context, we will define the financial sales person’s role as the “person responsible for the execution of the corporate, or personal, sales plan, which includes the short term marketing of the company.”

Marketing versus Sales

Long term strategic marketing is a very sophisticated process, requiring highly trained people that are not involved with the mundane, day-to-day activities of the enterprise.  Unfortunately, this type of “marketing” is done by too few businesses, RIAs, BDs, and FAs.

The “marketing plan”, as defined by Malcolm H. B. McDonald, Director of the Cranfield Marketing Planning Centre, of the Cranfield School of Management, is a comprehensive business plan, incorporating and integrating all of the elements of business; the four “P’s” — Product, Price, Place and Promotion. More often than not, financial sales organizations and RIAs are run by people with “Director of Sales & Marketing” titles.  This use of the “marketing” title often confuses the difference between marketing and sales. For our purposes, we will include the very short term marketing function in the sales department’s role.

Dirty Ear Marketing

This “very short term marketing” required of the FA or sales person is what is called “The dirty ear” marketing.  The “dirty ear” comes from “keeping an ear to the ground” to detect changes in the market that would affect the assumptions that support the marketing plan and the company sales plan.

It has been said that the American plains Indians could drive a stick into the ground, put the end of the stick to their ear and tell if the buffalo herd was within twenty miles — and, by bending the stick, tell in which direction.  The more sophisticated tracker could tell whether the herd was approaching or going away.

It is this short term, close in, change in direction of the market (herd) upon which the assumptions of the marketing and sales plan are based, that should be the concern of the sales department or financial advisor and business owners. 

Of Bull and Bear Markets

For example, during times of economic expansion, and bull markets, the purchasing authority for many items is transferred down the reporting chain to the lowest possible responsible level of management. At this level a sales person or FA may only require one or two calls to complete the selling process with a buying authority. This authority level would dictate the activity of sales people in achieving their personal sales plan and achieving their targets and goals. 

During a recession however, as is occurring now, authority to buy may be withdrawn from the customary buying level, designating someone at a higher level as the “buyer.” The financial sales person still must go through the traditional contact at the lower level. These contacts can now only say “no”. They cannot say “yes.” By adding another level of decision making to the buying process, additional activity will be required to make the average sale. You cannot double the activity required to make a sale and make the same number of sales!  Don’t make the mistake of thinking that working harder is the answer, as there is only a finite amount of time available to get to your prospects. Your options are; change the plan; adjust the sales budget; add more sales representatives.

The Sales Cycle

Continuing a sales plan based upon the assumption of a two-call sales cycle when the market requires a three or four call cycle will take your sales plan out of reality.  The key to both a good marketing plan and a good sales plan is “reality.”  It is the FA or sales manager’s prime function to see that the sales organization is working in “reality” by constantly testing the basic assumptions of the sales plan.

The challenge to every financial services business owner, sales manager and every FA sales person is to stay focused on the prime objective of a sales person – processing the sale.  To maintain focus on the sales objective, the activities of a sales person should be looked at in two categories; “tasks” and “selling objectives.”  The tasks are those activities that all sales people are required to do to service clients – handle back-charges, warranty claims, stocking services, point of sale maintenance, etc.  The selling objectives are defined by the sales progression used in the sales strategy.

Processing the Sale

To give better understanding to this concept, consider the following.  If you find a local bank that offers a certificate of deposit that is paying a good return, and you put $10,000 on deposit, you have made an “investment.”  It is an “investment” because you expect your money back with a profit.  To find this investment opportunity you must be focused externally (not within your own business).  And, investments are a source of new capital.

If, on the other hand you take the $10,000 and purchase a car for your business, your focus is internal to your business, solving a problem of transportation, and you will only realize gain by reducing an existing or potential expense. You will not realize any new capital from this expenditure.  This use of the $10,000 is an “expense.”

Internal and External Focus

To generalize, if your focus is external and you are seeking to generate new capital by exploiting new opportunities, this is an investment.  If your focus is internal, and you are solving problems (the activities that come after the sale), the time and money spent is an expense.

Tasks and Objectives

Sales people sometimes lose sight of the difference between the “tasks” (internally focused after sales activities that are expenses to the company) and the sales “objectives” (opportunity seeking activity that will result in generating new capital through sales). Although we must service the task items, we can avoid “buying” the customer’s problem (forgetting that the customer’s problem is our opportunity).  The way we make sure we maintain focus on the opportunity rather than the problem – is to link every task with a sales objective. 

Management Reporting

Historically, we have asked sales people and FAs to report to management through an activity report that usually records the “task” items but ignores the opportunity items. To use the reporting system as a training and management tool, stop requiring the typical activity and expense reports.

Instead, ask your sales people fill out an “Opportunity” report and an “Investment” report.  It is true; “What gets measured gets improved!”  If you want your sales people to be externally focused and seek opportunities, investing in accounts rather than “solving problems” and spending money (“expense” items), measure and report on the opportunities and investments.  It is more positive to run an investment department for your business rather than a cost center.

Managing For Results

Peter Drucker observes that “… there are no profit centers in a business; there are only cost centers.”  The profits centers are external.  Again, quoting Drucker; “Results are obtained by exploiting opportunities, not by solving problems!”

Assessment

The above offering is intended to help financial advisors and sales people “manage” themselves, and for the sales people who have assumed the mantle of OSJ or “manager”, etc

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated.

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:

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

Physician Advisors: www.CertifiedMedicalPlanner.org

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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