Is Your Advisor Walking All Over You?

Physician's Money DigestMarch15 2004
Volume 11
Issue 5

The task of building a financialteam sounds easy, but physiciansare notorious for beingtaken advantage of. In the financial industry, physicians are seen as aneasy sell of almost any product.

Four reasons:

Why are physicians taken advantageof so often? Physicians arefar too trusting; physicians, known as aneasy mark in the financial services andinsurance industry, attract advisors whoare looking to put one over on a client;most local advisors do not have knowledgeof advanced planning topics to helpphysicians; and physicians are too busy toreview the advice they are being given.

Advanced Planning

What is so advanced about "advanced"financial planning? When a topicis not well known by advisors, it is usuallylabeled advanced, even though mostadvisors could understand and deal withany advanced topic if they would find andreview the plan.

The following is a test for physician-investorsto give to any prospective orcurrent financial planner, insurance agent,accountant, or attorney. Ask those advisorsif they have reviewed the followingtopics: equity disability trusts, activity-basedcosting plans, capital transformationstrategies, and return of premiumdisability or life insurance. If your advisorhas not heard of more than one of thetopics, then they are not working in theadvanced marketplace.

Docs on the Defense

Physician-investors should know howto avoid being taken advantage of. Ifyou're looking for help with income taxreduction and the advisor you work withdoes not know the above topics, youshould find a new advisor. Otherwise, themain way to avoid using the wrong financialplanner is to take time reviewingwhat is being proposed. If it sounds toogood to be true, it probably is.

Physicians may not have been educatedin financial planning, but every physicianhas the mental capabilities to reviewadvanced financial plans. The problem isthat most physicians do not take the time,and over their career, that usually coststhem hundreds of thousands of dollars.

Lastly, don't be afraid to ask for a secondopinion. When an advisor wants tohelp you move hundreds of thousands ofdollars, have another competent advisorsecond-guess the move. That will helpinsulate you against the lack of time youhave to review the advice in depth.

Roccy DeFrancesco is an attorneyand author of "The Doctor'sWealth Preservation Guide." Hehas run a medical practice and lecturedfor many state and nationalmedical associations. For a freeasset protection, income, and estate tax reductionCD, or for questions, call 269-469-0537 or

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