Picture a bunch of financial planners hanging outafter an afternoon of golf. They settle in at the bar, order afew drinks, and begin swapping medical advice. One startstalking about this great new drug he's been taking for arthritis.Before you know it, everyone else wants to try the drug.
Should they talk to their doctors first? Of course. This isa clear case where a medical professional, armed withdecades of study and practice, can advise an individual andsteer them away from harm.
Now imagine that this story isn't about financial planners,but a group of doctors. These doctors, however, aren'ttalking about prescription drugs—they're trading hot stocktips. If one doctor brags about the killing he made on sometech shares, should the other doctors whip out their cellphones and call their brokers, stat?
Sure, as long as they don't mind the very real chance theycould lose thousands and thousands of dollars. And don'texpect brokers to warn you against following a tip from awell-intentioned friend. Brokers typically earn a commissionfrom closing the sale, not from talking you out of it.
Throughout my 20 years as a financial planner, I have frequentlyencountered doctors who experience the occasionalbout of irrational exuberance, run after the latest hot stock,and put their financial well-being at risk. Physicians are intelligent,but their years of intense training are focused onhealth and healing, not savings and investments.
Becoming a doctor takes time, determination, and hardwork. You can't skip any steps along the way or take anyshortcuts. The same is true for financial planning. From skyrocketingmalpractice premiums to declining insurance reimbursement,physicians face a unique set of financial challengesand have distinct needs that are best addressed with aheavy dose of expertise from a qualified professional.
When choosing a professional to care for their health, peopleselect their physician carefully. Likewise, physicians needto exercise the same care when selecting a financial planner tocare for the health of their finances. Consider the following:
•Comprehensive financial planning.In addition to the return on aninvestment portfolio, physicians mayhave debts from school loans, significantexpenses such as liability insurancepremiums, and questions aboutthe best approach for operating theirpractice—not to mention retirementplanning. Ask a prospective advisorabout how to handle a multitude offinancial matters.
•Coordination among professionals.Ideally, a physician shouldhave an attorney, an accountant, and afinancial planner who make decisionsas a team. Together these professionalswill identify issues before they fallthrough the cracks.
•Experience and clientele. Lookfor someone who works with medicalprofessionals, and don't hesitate to askcolleagues for references. Interview atleast three potential advisors. After all,your decision could cost—or save—you thousands of dollars.
•Your comfort level with theselected financial advisor. A goodplanner will take the time to knowyou, your long-term goals, and yourbackground. They should be willingto thoroughly explain financial mattersand make sure you are an educatedphysician-investor.
Surrounding yourself with the rightteam of professional advisors is criticalto your financial well-being. Don't relyon "hot tips"from friends and colleaguesto try to spark your portfolio.Doing your homework and establishinga stable financial plan is the key tolong-term success.
Richard M. Braverman, CFP®, RFC, is a principal
of Braverman Financial Associates in
Lancaster, Pa. He has more than 20 years of
experience in the industry and is a registered
representative offering securities
through FSC Securities Corporation as well as a registered
broker/dealer. The views are those of Richard M.
Braverman, CFP®, RFC, and should not be construed as
investment advice. Braverman Financial is not affiliated
with FSC Securities Corporation.