What to Look for in Doctor-Focused Financial Planner

August 3, 2010
Michael Sheehan

Increasingly, financial-planning firms are targeting physicians offering specialized services. One reader asks what he should look for when choosing one.

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Q: financial planners that specialize in physicians -- what should I look for when choosing one?

A: When it comes to finances, doctors are different. They leave medical school loaded with debt and, once they’re established, they have very specific financial needs. Asset protection can be crucial, for example, because of the threat of lawsuits. Disability insurance is another must-have, because of the physical and mental demands of a doctor’s job. They also don’t have a lot of spare time to devote to their financial future. Finding a financial advisor who understands these unique needs is a definite plus.

The financial-planning community has recognized this, too. A growing number of financial-planning firms now specialize in serving doctors, and many generalized firms are developing internal groups specifically aimed at advising physicians. (To find one, plug “physician financial planning” into your favorite Web-based search engine.) Some state and local medical associations have also formed partnerships with qualified financial services firms to provide advice to their members.

Before you start, you need to know what that financial advice will cost you. Ask how the financial advisor gets paid. You’re probably better off choosing a financial counselor who gets paid on a fee-only basis, which will usually run you anywhere between 1 percent to 1.5 percent of assets under management, rather than one who gets paid a commission based on investments he or she recommends. A commission arrangement carries an inherent conflict of interest -- the advisor may be eager to push investments that pay better commissions rather than those that are suited to your needs.

Before you sit down with your chosen financial guru, take some time review your financial goals. Don’t worry if they’re a little vague; a financial planner can help you bring those goals into clearer focus, turning generalities into specifics. Once you put together a concrete plan that clearly defines your goals, it’s much easier to follow it.

For more information about choosing a financial planner that's right for you, click here.