Financial advisors: Why physicians need a good one

As a physician, I’m frequently asked to make referrals to specialists by friends, family and patients. It certainly helps that I know who is good and who is not from direct working relationships, as well as being able to contact trusted physicians elsewhere for recommendations in their fields and geographic areas. This type of benefit extends to financial consulting as well.

Traditional reasons for hiring a fiduciary financial planner include to receive a review of one’s financial situation, obtain advice on the best ways to avoid financial mistakes and learn how to attain financial independence. An ongoing relationship with an experienced planner provides all this as well as long-term strategies for increasing wealth in a diversified and disciplined manner.

But a good financial advisor brings much more to the relationship in the form of the other professionals they know and work with. A seasoned planner usually will have a large team of consultants that they can tap for information and advice on behalf of their clients. These consultants have been vetted and found to provide the best fiduciary advice and help, as opposed to those who recommend risky, sales-driven tactics.

Let’s look at some examples ...

The field of life insurance is rife with agents trying to persuade young physicians to buy various types of expensive whole-life insurance products that they don’t need. I see it over and over. Closely aligned are annuity salespeople cramming expensive and underperforming products into portfolios to line their own pockets.

A good financial advisor will align with a great insurance agent who knows that most families just need some term policies that expire as financial independence is achieved. A great agent will also know the underwriting personnel and practices of various life insurance companies, which will, in turn, guide the best choice of policies for an individual in terms of cost and coverage. When necessary, a great agent will offer guidance on actions to take before applying for coverage, such as clearing up a resolved medical issue that is still on your records.

All this is true for having a great agent when purchasing disability insurance. The great agent knows the underwriting proclivities of the different companies and can help guide the young physician through the intricacies of applying. Such an agent knows that adding a catastrophic rider is a good value and that expensive extras like “return of premium” riders usually are not. In short, the great agent knows that getting maximal coverage in one’s early years is the overriding goal.

The good financial advisor knows who the good accountants are. Many accountants, however, are not much better than using a software program like TurboTax. Fortunately, there are still great accountants with deep experience, knowledge and creative ideas. A good financial planner has found and worked with these professionals, and the planner’s clients benefit greatly from this.

Working with attorneys on estate planning issues, contract reviews and even in litigation (malpractice or other) can be a scary crapshoot. It is difficult to know which attorneys are the best in their field and for your situation and personality. A good financial planner has worked with many attorneys over many years and can be extremely helpful when it comes to making the appropriate choices.

So having a relationship with a good financial planner brings a best-of team of advisors to help you achieve your life goals. Think of your own experience in medicine: When a relative or friend asks you to recommend a physician, you often know exactly whom to steer them to and whom to have them avoid. Having a guide to the best financial and legal advice is just as valuable.

Steven Podnos, M.D., MBA, CFP, is founder and principal of Wealth Care LLC in Merritt Island, Florida. He can be reached at Steven@wealthcarellc.com or at www.wealthcarellc.com.