When it comes to finances, physicians are unique. Despite earning high salaries many graduate medical schools with significant debt. Then must navigate pivotal career choices such as whether to specialize, enter private practice and more. Unfortunately, these decisions significantly impact their financial future.
However, many doctors, while focused on patient care, lack the formal business skills needed for successful financial management. This underscores the need for professional financial expertise. In fact, a recent Doximity poll of 2,087 doctors revealed that 53% already work with a financial advisor and an additional 15% are considering hiring one soon. These findings cut across various specialties with the exception of neurology, where only 41% of doctors have a financial advisor.
Finding the right financial advisor with expertise in the medical field is essential. The best advisors will help physicians achieve their financial goals while sustainably practicing medicine. In this article, we’ll discuss how physicians can pick the perfect financial advisor, including the role financial companies and firms play, and the importance of referrals.
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Before hiring a financial advisor, it’s important to determine what you want. Are you looking for general advice and planning or are you ready to invest for your future? What are your short term and long term goals, better yet what are your dreams? Answering these and other questions can help you choose the best fit for you.
When searching for the right advisor, carefully assess their qualifications, as anyone can call themselves a “financial advisor”. Unlike the medical field where board certification is standardized, there are over 200 professional designations in the world of investment advice.
However, considering a few key factors will help you effectively narrow down your choices. These include:
- Ask for referrals from friends, relatives and professional colleagues. Recommendations can often provide the most reliable information. Plus, online searches may not always provide accurate information about credentials.
- Large firm or solo advisor. Would you prefer working with a financial firm, or an advisor with a solo practice? Each has their positives and negatives.
- Check credentials. Financial advisors who adhere to their industry’s best practices include certified financial planners (CFPs) and registered investment advisors (RIAs).
- Determine fiduciary status. Legally, a fiduciary must act in the best interest of the client, offering a layer of trust and security in the relationship.
- Ask about their fee structure. For instance, are these advisors fee-only or do they earn commissions?
- Experience. From private practice to working in a hospital it’s important to work with an advisor who understands the world of doctors and physicians.
- Screen your candidates. Ask questions about their experience, client base, communication style and other factors that can affect your relationship.
- Be thoughtful and reflective. Your advisor’s ability to align with your career goals, personal objectives and risk tolerance is essential for a successful partnership.
Finding the right advisor is just the beginning. As your career evolves so will your financial goals, expectations and needs. For example, you might consider leaving clinical work, starting a private practice, retiring early, or taking on locum tenens work. Therefore, it’s important for your advisor to be capable of adjusting your portfolio strategy while staying committed to your financial growth.
ARTICLE
Invest $100K the Right Way
At some point, you may find yourself with $100,000 in the bank and questions on how to invest it.
The right prescription
If you are a doctor, working with financial advisors for physicians goes beyond managing your financial standing. These experts are your go-to for a wide range of services including retirement and estate planning, as well as tax and wealth management strategies. What’s more, they can offer in-depth risk analysis, helping you align your financial goals with your career path.
With the right advisor by your side, you can effectively manage your finances, allowing you to focus on your primary mission of patient care. This harmonious balance between financial stability and professional dedication is the ultimate goal, and with the right guidance, it’s a tangible future.
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